Case ID: scl_44/html/0234-01.html
Source: Caselaw Access Project
Author: {"author": "Withers, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McKenzie, Cadow & Co. vs. Josinah P. Garrison.
    The decisions have firmly established that the undue preference forbidden by the prison bounds Act, includes the idea of a fraudulent preference.
    Where a debtor, knowing his insolvency, assigns his estate to some creditors in preference to others, it amounts to an undue preference.
    Whether a prisoner shall be required to specify the names of witnesses to dioses in action included in his schedule, is a matter, it seems, for the determination of the commissioner of special bail.
    BEFORE DAVID RAMSAY, ESQ., COMMISSIONER OF’ SPECIAL BAIL.
    Tbe defendant, J. P. Garrison, a citizen of Florida, was arrested and committed to jail in March, 1856, in Charleston district, under mesne process, at the suit of the plaintiffs, McKenzie, Cadow & Co. On the same day and while in jail, he executed an assignment as follows :
    THE STATE OP SOUTH CAROLINA:
    Know all men by these presents, That whereas I, Josinah P. Garrison, am indebted to Thomas C. Kettles in the sum of three hundred and fifty dollars ($350.00,) to David Mizelle in the sum of three hundred and eighty dollars ($380.00,) to L. Alexander in the sum of five hundred dollars ($500.00,) to William H. Hall in the sum of seventy-five dollars ($75.00,) to Samuel Lowman in the sum of five hundred and fifty dollars ($550.00,) to Doctor George B. Payne in the sum of three hundred dollars ($300.00,) which indebtedness amounts in all to the sum of two thousand three hundred and fifty-five dollars.
    Now know ye, That in consideration of the said indebtedness, I, the said Josinah P. Garrison, do hereby assign, set over, convey, bargain, sell and deliver to the said Tbomas 0. Kettles, David Mizelle, L. Alexander, William PL Hall, Samuel Lowman, Dr. George B. Payne, all my books of account, notes, due bills, and debts due me, and I do further authorize and empower the said Thomas 0. Kettles, David Mizelle, L. Alexander, W. H. Hall, S. Lowman and Dr. G. B. Payne to collect the said moneys due me, upon said accounts, notes and due bills, and to do all such acts as may be necessary for their collection as fully and effectually, as I, myself, could do, and to effectuate this instrument I do hereby bind myself, my executors, administrators and assigns firmly by these presents. In witness whereof, I have, this, fourteenth day of March, Anno Domini eighteen hundred and fifty-six, set my hand and seal.
    J. P. GARRISON, [L. s.]
    Signed, sealed and delivered, in the presence of
    Edw. J. Anderson,
    John H. Ellis.'
    On the next day he filed a schedule, containing the following articles:
    Household and kitchen furniture.
    Wearing apparel of himself and family.
    All my interest in house and lot, formerly the property of Joseph Ferguson, in Micanopy, Florida.
    Books of account and bills due upon the same already assigned to pay to T. 0. Kettles, three hundred and seventy dollars; David Mizelle, three hundred and eighty dollars, Dr. George B. Payne, three hundred and fifty dollars; L. Alexander, five hundred dollars; W. H. Hall, seventy-five dollars; Samuel Lowman, five hundred and thirty dollars.
    My interest in store-house, Micanopy, Florida. Land, two hundred and thirty-one acres in Columbia county, Florida.
    House and lot in Micanopy, Florida, bounded by lands of J. B. Smith, A. W. Cook and B. Radcliffe.
    
      And thereupon he applied for his discharge under the prison bounds Acts.
    The plaintiffs opposed his discharge and filed a suggestion alleging, that the schedule was illusory and deceptive, because the choses in action were not mentioned with sufficient particularity, &c., and because the names and places of abode of the witnesses to prove the said choses in action, were not men-" tioned; that the schedule was not true in divers particulars specified; that the prisoner, within three months before and since his arrest and confinement, had made an undue preference, — specifying the assignment to Kettles and others, and charging it to amount to such preference; and, lastly, that the prisoner had fraudulently conveyed and assigned a large part of his estate to defraud the plaintiffs — also specifying the assignment to Kettles and others, and charging it to be fraudulent, and the debts therein mentioned to be pretensive.
    The case was tried 17th May, 1856; and the jury after hearing the testimony, several witnesses having been examined, returned a verdict of not guilty.
    The plaintiffs appealed, and now moved this Court for a new trial, on the grounds:
    1. Because it is respectfully submitted, the commissioner erred in charging the jury, that if the debts due J. C. Kettles and others were bona fide debts, that the petitioner or defendant had the right after his arrest and,.confinement to make an assignment of his property to J. 0. Kettles and others in said schedule mentioned, and thereby to prefer them to the relators, his creditors.
    2. Because it is respectfully submitted, that there was no proof that the debts due to J. C. Kettles and others aforesaid were bona fide, and the commissioner should have charged the jury that it was incumbent on the petitioner to prove the consideration and justice of the said debts.
    
      3. Because it is respectfully submitted; that tbe commissioner erred in not charging tbe jury, that tbe schedule of tbe petitioner was defective in not containing tbe names and residences of tbe witnesses, who could prove the accounts in tbe schedule assigned, or proposed to be assigned by tbe petitioner.
    
      Mowry, Me Grady, for appellants.
    
      Martin, contra.
   Tbe opinion of tbe Court was delivered by

Withers, J.

After tbe arrest of the defendant upon mesne process, issued in behalf of tbe plaintiffs, be made tbe assignment referred to in tbe brief, which was to inure to tbe benefit of certain specified creditors in Florida, leaving for tbe plaintiffs no more than a residue, after satisfaction of tbe preferred creditors, if any residue there might be. Tbe schedule, filed for tbe purpose of seeking tbe benefit of tbe Prison Bounds Act, was presented tbe day next after that of tbe assignment. Tbe plaintiffs interposed objections, upon suggestion, to tbe defendant’s enlargement, and inter alia allege tbe said assignment to be such preference of one creditor to another, or such undue preference of certain creditors to tbe prejudice of tbe plaintiffs as brings tbe defendant under tbe condemnation of tbe seventh section of tbe Act of 1788, familiarly called tbe Prison Bounds Act. Tbe jury charged with tbe issues made upon tbe suggestion, have found a verdict for tbe defendant, and this appeal is made for a new trial.

Tbe decisions of this Court have firmly established, that the undue preference, which tbe law forbids, includes tbe element of a fraudulent preference — a. modification of the rigor of a course of decision in earlier times, a departure from the strict letter in favor of a humane interpretation of provisions considered quasi penal, an interpretation much commended by considering, that within the specified period of three months a mere preference of- one over another creditor, by payment or assignment, might occur with no design to prejudice, defeat, delay, or hinder any creditor, in ignorance of unsettled or complicated affairs, which subsequent current events of the three months might vary, as to results, for the worse as well as the better.

It is clear that an issue as to fraud, involves an inquiry as to intention or design of the party charged, and the jury before whom it is tried must resolve it. But in such issue, as in all others, the verdict for or against either party must have a foundation in the evidence, or it cannot stand. Now if a debtor be insolvent, and he knows it, and yet he will transfer his estate to some creditors, in- ¡Dreference to others, it is manifestly in contravention of the scheme of our legislation in .favor of insolvent debtors — which contemplates, on the part of him who appeals to them, a fair and rateable appropriation of his inadequate or insolvent estate to all his creditors. When such a person is in circumstances to know that an assignment to some will defeat others, how can he be held innocent of a purpose to that effect? Such was the case of Witsel (vide 2 Hill, 418,) though his obnoxious act was performed before his confinement; such was the case of Briggs, who preferred Cathcart, a subsequent suing creditor, to Walker a prior one. We have in this case the circumstances, that the defendant made his preference, by assignment, after his arrest and confinement, in favor of creditors in another State, who did not demand-it (so far as appears,) and that what he assigned to them is inadequate to satisfy them, according to defendant’s estimate here. As to the real estate set forth in the schedule, the evidence reported is strong to show, that it is merely delusive as a resort for these plaintiffs, eitbex because Garrison does not own' it, or, if be owns any, tbat it is of very trifling value.

Tbe position assumed for bim is, tbat be bad enough, or supposed be bad, of assets to ¡say all creditors. Then (it may well be demanded) wby did be not make all creditors equal under tbe assignment; and superintend, as be best could do, tbe adjustment of bis affairs ? It is much to be apprehended, tbat if such a transaction as Garrison’s be maintained as consistent with tbe law of insolvent debtors, we shall afford them not merely tbe benefit of a mitigated and humane exposition of tbat law, but entirely shield them from all its sanctions, and destroy its whole efficacy towards protecting tbe rights of suing creditors, who, because they sue, may incur tbe resentment of their debtor.

Upon the two other grounds of appeal, it is needful to say but little — nothing authoritatively. It may be difficult for one in Garrison’s condition, to show much evidence as to tbe genuineness of bis indebtedness to tbe preferred creditors; to tbe extent tbat tbe assignment may be pretensive, in tbat respect, it would be evidence of a fraudulent assignment of bis estate and effects, and would not avail no matter when made.

As to specifying tbe witnesses to tbe cboses in action; tbe fifth -section of tbe Act declares tbat this “ must” be done; but we suppose tbat tbe object in view can be secured by tbe exercise of authority on tbe part of tbe Commissioner, according to tbe circumstances, by denying a discharge without a reasonable compliance with this regulation. It is foreseen tbat circumstances will arise in tbe cases of imprisoned debtors, wherein a full compliance, or even a partial one with this provision, may be impracticable.

A new trial is ordered.

O’Neall, Wardlaw, WhitNer, and Muwro, JJ., concurred.

Motion granted.