The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1883-01-26

venlent shape that he may enforce other
terms no SUIT his convenience with his
already delayed creditors. Ii The assign.
ment Is held valid. but the trust is admin.
lsiered according to the state laws, which it
is argued have the effect to validate all
assignments, curing all frauds, in act or
intent, ana TO certain extent making q
contract Tor the assignor. The effect is
practically the same, except that If there is
any surplus after preferred creditors aud
expenses, etc., are paid, 1t may be paid
into court to be litigated for.
In This latter case as TO the administra.
tlon under the state law, q number of curl
Gus queries suggest themselves, which, if
they were satisfactorily answered., might
inunce creditors to view assignments under
the law with more favor, Where and when
Is the assignment to be recorded? When
II Is to take eifecty How long may the
assignee carry 1t in his pocket
suppose that no creditor accepts the
terms OF the debtor? Could the assignment
be set aside2 II so, when? After the full
administration OF the assignee, or at the ex-
plralion OF four months? When is a dlyi.
dend TO be paid accepting creditors When
the assignee can pay 10 per cent. of the ac.
ceptlbg creditors claims, or when he has
iunas IN hands sufficient TO pay 10 per cent
Oh the debts due by the assigneeY'
suppose the assignee can collect only
enough, alter reasonable compensation
necessary expenses and attorneys fee at
9iscretioh are paid to pay per cent. of the
debts due by the assgnor2
Many other questions suggest themselves
but all, including the foregoing, throw no
night on this case--they being referred TO
only because the policy of the law has been
discussed at the bar and very ably justified
and defended too.
The assignment aforesaid makes several
dispositions and conditions in conflict with
the law, which is relied on to maintain IL
but the chief objection made to its validity
Is, that the assignment is not complete OF
the assignor's interests, but that sssignor
reserves an interest in his own favor i'm the
property assigned.
The act of March 9th, 1879, Texas Laws.
actsoi 1919, chapter 80, page 81, provides:
Sectlon !. That every assignment made
by an insolvent debtor, or in contempla.
ton OF insolvency, for the benefit of hi,
creditors, shall provide, except rs herein
otherwise provided tor, distribution of all
his real and personal estate other than that
which Is by law exempt from execution
among all his creditors in proportion to
their respective claims, and however made
snail nave tho effect aforesaid and shall
be construed to pass all such estate
whether specified therein or not any and
every assignment shall be proved or nc.
knowledged and certified and recorded in
the same manner as is provided by law in
conveyance OF real estate or other prop.
erty."
Sec. 9. Any debtor desiring so to do
may make an assignment for the benefit OF
such OF his creditors only as will consent TO
accept their proportonate share of his es.
tate and discharge him from their respective
claims, and III such case the benefit Of the
assignment shall be limited and restricted
10 the creditors consenting thereto.
the debtor shall there upon be, and stand
discharged from all further liabilities to
such consenting creditors on account of
their respective claims, and when paid thew
shall execute and deliver to the assignee for
the debtor release therofrom."
Upon the construction OF these two sec.
tons and upon the common law of the va.
ldity OF the aforesaid assignment depends,
see article 3l2S, Revised Code of Texas.
1t seems that by the sections aforesaid,
two classes OF assignments are allowed.
Under the first section assign
ments for the benefit of all the creditors.
which are aided by the law, and nat.
uraily would be favored by the courts.
Under the tSird section assignments for
the benefit Of preferred creditors, who are
preferred on their own election, under
stress OF u penalty FORGETTING their claim,
which assignment Is not in terms aided by
the law, aud naturally isnot favored by the
courts.
Prior TO the act of 1870, an assignment.
such as the one now under consideration,
would have been adjudged void
on Its face, because therein the assignor re-
served an interest In the estate assigned.
lSee the leafing case In Texas-Baldwin vs..
Peet, % Texas, EOS, and Baiiy VS.. Mills. n
Texas i3i; also, Barney VS.. Griffin, 2 New
York aComstock) court of appeals, 365;
Leitch VS.. HOLSTER, 4 New York Com.
stock court ofappeals, 2ll,l
In the last cited case II is said shat effect
OF such an assignment Is TO withdraw the
property OF the debtor from legal process
and TO compel creditors TO await the pxecu.
ton OF the trust before they can reach the
surplus reserved to the former. As those
who are excluded from the benefits of the
assignment cannot enforce its execution,
they are necessarily hindered and delayed,
and consequently in legal contemplation
deirauded. lis ofno consequence whether
the surplus is large or small, or whether
ANYTHING remains after the payment Of pre-
ir.. creditors.
Tue creation OF the trust shows that a
surplus was In the contemplation of the
parties, and its reservation for the benefit
OF the assignor, is fraud upon creditors.
These cases and the arguments so clearly
expressed have lost no force by lapse Of
time.
The statute aforesaid was passed In
the sight OF them, and think Il must DO
construed In harmony with them.
Counsel have handed In two late decisions
OF the supreme court Of Texas, not yet re.
ported, in which that learned tribunal has
passed upon two cases arising under the
statute aforesaid.
The first, Blum VS.. wellborn, goes
TO the extent Of holding that
an assignment that evidences the intention
topass TO the assignee all OF the property of
debtor subject 10 forced sale for the pur.
pose OF distribution among creditors. and
executed In substantial compliance with the
requirements OF the act. will be aided by
the law rs to form. and will not be avoided
By fraud between the assignor and as.
signee In sccrcting and appropriating por.
tons Of the property assigned.
In the second case, Donoho, vs.
Fish, Brothers h Co., II Is
held that the law cannot make
an assignment for the debtor, but that Il |
aids sn assignment which evidences an In.
ttUtlVu VI tbt hvbttf w Win "
provisions; that the provisions OF the third
section OF the act Of 1870 must be construed |
In harmony with the principles laid down |
by the courts OF the several states In which !
Il has been held In the absence Of q statute |
that such restrictions upon the rights OF
the creditors generally might be imposed !
bv the debtor. and that an assignment CONF
tanning such RESTRICTIONS, which does nor,,
Of itself, or with the aldo the law. tranM. %
all OF the debtors property for the bel W
Of his creditors, 10 void upon its lace. a
Following these two cases, rs TO the "a
keeping In mind that the law cannot vH.
! contract for the debtor, and that ~ 4 TIs
iehtor seeks 10 force exactness ffd&.Sf \
,reditors under the third section Of xRp16.
he must resign all OF his property ans
'mpt. feel warranted In Ia, Ehef;
indsr the lights 70 which
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