Case ID: walker_4/html/0426-01.html
Source: Caselaw Access Project
Author: {"author": "Woodward, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MORRIS CANAL AND BANKING COMPANY vs. REEDER.
    An assignment to a trustee for tlie benefit of a part of the assign- or’s creditors must be recorded.
    No. 381, January Term, 1861. Error to Common Pleas of Northampton County. Reeder & Buck obtained a judgment on August 25, 1856, against John W. Murphy & Co. for $374.46. On August 26, 1859, John W. Murphy obtained a judgment against the Morris Canal and Banking Co. for $3,111.25. On August 31, 1859, Reeder & Buck issued an attachment execution against Murphy with notice to the Morris Canal and Banking Co. as garnishees. On December 15, 1858, John W. Murphy executed and delivered an assignment to James M. Porter, Jr., of all monies that might be recovered in the above suit, to pay first, a contingent fee of 33 percent, to his attorneys; second, to pay out of the residue a debt of John W. Murphy to Wm. R. Hanson, and out of the residue to pay to A. & P. Roberts a debt due them by John W. Murphy. Notice of this assignment was given to the Morris Canal and Banking Company., after the service of the attachment, but the garnishee paid over to the assignee the amount of the judgment. The assignment was not recorded. The garnishee filed its answer to the interrogatory, setting forth the above state of facts. The Court entered judgment against the garnishee upon the answer.
    The Morris Canal and Banking Co. then took this writ of error complaining of the entry, of the judgment.
    
      B. F. Fackenthall, James M. Porter and D. H. Neiman, Esqs., for plaintiff in error, cited:
    Comegys vs. Vasse, 1 Peters, 193, 213; Butler vs. New York & Erie R. R. Co., 22 Barb, 110; Purple vs. Hudson River R. R. Co., 4 Duer, 74; Act March 24, 1818, Sect. 5, 7 Sm. Laws, 132; Englebert vs. Blanjot, 2 Wharton, 240; Flanagin vs. Wetherill, 5 Wh. 280; Watson vs. Bagaley, 12 Pa., 164; Act April 17, 1843, P. Laws, 273; Weiner vs. Davis, 18 Pa., 333; Henderson’s Appeal, 7 Casey, 503.
    
      
      Messrs. Reeder & Green and A. E. Brown, Esq., for defendants in error,
    argued that the assignment in this case was-in trust for the benefit of creditors, and should have been recorded; Chaffees vs. Risk, 24 Penna., 434; Englebert vs. Blanjot, 2 Wh. 240; Flanigan vs. Wetherill, 5 Wh., 280; Watson vs. Bagaley, 12 Pa., 164.
   The Supreme Court affirmed the judgment of the Common Pleas on May 8th, 1861, in the following opinion, per:

Woodward, J.

The assignment of 15th December, 1858, by John W. Murphy to James M. Porter, Jr., was upon the express “trust that the said James M. Porter, Jr., shall retain all moneys I owe him; and. out of the residue shall pay Wm. R. Hansen the debt I owe to him, and out of the residue, if any, pay, to A. & P. Roberts a debt that I owe to them.” The instrument is formal and was duly sealed and witnessed. It established a trust in Porter for the benefit of himself and the other creditors named.. That it was a partial assignment in respect either of the debt- or’s estate or of his whole list of creditors, makes it none the-less an assignment in trust for the benefit of the creditors who> are specified in it. That such an instrument, unrecorded, is-void, against a subsequently attaching creditor, is shown by the Acts of Assembly and the adjudged cases referred to in the-argument.

It is attempted to rescue the assignment from so fatal a consequence by the rulings in Werner vs. Davis, 6 H, 333, and in Henderson’s Appeal, 7 Casey, 503; but in both of these cases the assignments were made directly to creditors, and not to-a trustee for their use. On this ground they were sustained as not falling within the meaning of the Act of 1818, though in the first of these cases the assignment had been recorded. The distinction between instruments such as those and the one now before us is plainly pointed out in Chaffees vs. Risk, 12-H., 434. And that this assignment should have been recorded though made for the benefit of less than all of the assignor’s creditors, is proved by what was ruled in Englebert vs. Blanjot, 2 Wh., 240.

Judgment affirmed.