Case ID: mass_23/html/0360-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John G. Ward et al. versus George O. Lamson and Trustees.
    Where a debtor makes a general assignment of his property in trust for the benefit of his creditors, a creditor who by a trustee process attaches the funds in the hands of the assignees, will be entitled to payment, in preference to creditors who execute the assignment subsequently to the attachment.
    Where such assignees employed the debtor himself to collect for them the proceeds of certain property included in the assignment, in another State, which he did, and before he paid over the same, the assignees were summoned as his trustees, it was held, that they were chargeable as such, the debtor being considered as their servant, and a receipt of the money by him as a receipt by themselves.
    Assumpsit. By the answers of the respondents, who were summoned by virtue of the trustee process, it appeared that on the 24th of May, 1827, Lamson made to them a general assignment of his property, consisting of chattels and choses in action, in trust to pay his creditors, who should become parties to the assignment, some of them in full and others in proportion to the amount of their respective debts. On the 6th of June, when the process was served on the trustees, the assignment had been executed by creditors whose demands amounted to 4390 dollars, and the property which had then come into the actual possession of the trustees amounted to 3842 dollars. Some virgin silver and tortoise-shell, included in che assignment, were never in the actual possession of the respondents, but at the time of the execution of the indenture were in the hands of certain merchants in New York, and Lamson undertook to obtain the proceeds for the respondents. He accordingly collected 2622 dollars, the proceeds of the silver and tortoise-shell, and deposited the same in the Beverly bank in his own name, a few days before the service of process upon the respondents, and after the service he paid the amount to them in bills of that bank. This amount, together with the sum received by the respondents before the service of the writ, was sufficient to pay the debts of the creditors who had signed the indenture before that time, and likewise the debt due to the plaintiffs. Other creditors subsequently executed the assignment.
    
      Bassett, for the plaintiff,
    cited Paley on Princip. & Ag 989 ; Matthews v. Haydon, 2 Esp. R. 509; Duke of Norfolk v. Worthy, 1 Campb. 337.
    
      April 1st
    
    
      C. G. Loring, for the trustees.
   Per Curiam.

The question made in another case this term, meets us likewise in this, namely, whether the plaintiffs will hold the funds, by virtue of their trustee process, in preference to the creditors who signed the indenture subsequently to this attachment. We did not anticipate that such a question would have been made. For twenty years it has been considered to be law, that if an attachment is made before any creditor has become a party to the assignment, the attachment will hold. So if it is made after some have signed the indenture, the attaching creditor will have a priority to subsequent signers. Otherwise, as it cannot be known whether creditors will or will not execute the assignment, the property would be locked up. We think this is not now an open question.

The point however relied on by the respondents is, that they had not sufficient funds in their hands at the time of the service of the trustee process, to pay the debts of those creditors who had previously become parties to the assignment. Besides the money actually received by them, there was prop erty in New York, comprehended in the assignment, the proceeds of which they employed the debtor to collect for them. We think that he received the money as their servant, and that when it was received by him, they became accountable for it. As this sum, together with the funds previously in their hands, is more than sufficient to pay the debts of the creditors who executed the indenture before the service of this process, the respondents must be charged as trustees. 
      
       See Breioer v. Pitkin, 11 Pick. 298 ; Leeds v. Sayward, 6 N. Hampsh. R. 83; Cushing on Trustee Process, § 55, p. 30, and cases cited in note 2; Bradford v. Tappan, 11 Pick. 76; Angelí on Assignments, 168 et seq.
      
      It has since been provided, that assignments made to creditors, or to any one or more assignees or trustees for the use of creditors, according to the provisions of St. 1836, c. 238, shall be valid and effectual against any attach ment or execution thereafter made or levied on any of the property assigned provided the debtor make oath, &c. St. 1836, c. 238, § 1. But the whole subject of assignments is now regulated by St. 1838, c. 163, quad vide.