Evening journal., 1893-05-23

creditors this money so paid into court
rightly belongs, three issues were
framed and have been submitted TO your
decision. viz.
Ibid the said Jacob II. Topkis con.
template insolvency at the time he vol
UNFAIRLY confessed said Judgments TO
said Samuel Slesinger and David Abram-
SOM
"2.-Dd said Jacob H. Topkis by
voluntarily confessing said judgments as
aforesaid. attempt TO prefer the said
Samuel Slesinger and David Abramson,
the creditors to whom said Judgments
were 80 confessed, to other Of his credi-
tors. and did said Jacob H. Topkis there
by attempt to secure or pay 10 said
Slesinger and Abramson, or either of
them greater proportion of their re.
spective debts or demands than he could
secure or pay TO all his creditors2
"3 Did said Jacob II. Topks confess
said judgments for the purpose of hin
lering. delaying or defending the cred
itors of him the said Topkis, or any of
them
In order that you might intelligently
pass upon these three questions or issues,
evidence has been produced and argu-
ment Of counsel made upon both sides.
II Is foi you now to answer each one of
these questions upon that evidence,
under the instruction of this court upon
the question of law involved.
I'VE desire TO say TO you that IL is the
well settled law of this state. settled in
the case OF Lockley VS., Horsey, Mullin &
Co. Houston. 603, by the Judgment of
the Court Of Errors and Appeals after
careful and exhaustive review OF all the
| aooaa 90, fItfa phfanf fhot on fpa,lv.,t
creditor may give bond and warrant.
confess Judgment and prefer one or more
creditors TO others, is given in good faith
TO secure bona hde debts, even though
such secured creditors receive Hereunder
a greater proportion of their respective
debts than could be secured TO all his
creditors. Our statute does not prohibit
such preferences.
by section 4. chapter 1872 of th Re
vlsed Code, 'Ith-is not preferences given
in contemplation Of insolvency. or under
falling circumstances which are prohib
tied, but preferences given under an
assignment made for the benefit Of cred.
itors IL is the act Of assignment and
not merely his being In failing circum
stances which brings the debtor within
the scope of this statute. Our law
8 recognizes two distinct policies with
respect to the liquidation Of falling
debtors estate, and one is the
policy Of giving TO creditor
the benefit Of his diligence as against
other creditors. This policy obtains 80
long as the debtor keeps control OF his
property by not making an assignment
, III no assignment be made. he may
prefer a creditor though he be in falling
circumstances and though the preference
in effect, covers all his property for the
benefit of creditors but the moment he
/ makes an assignment, and not before,
o the policy Of equal distribution among ali
\ the cIeaitorspruvails, and the debtor car
s give no preference, either under the
assignment. or by any act done In con
4 temptation of 10. There Is sound reason
i for treating the act Of assignment as
e test Of the application Of the statute tC
d the debtor. IL is highly penal
statute, and, upon general prin.
e ciples. penal statutes are to be
strictly construed and especially should
that rule apply to this statute, for II the
fact OF an assignment alone subjects the
dehtor TO it's provisions and renders him
4 punishable for n preference, we have q
7 certain test Of disability which he him
Q self could not misuuderstand, and which
I could be easily proved against him.
"Bnt If his being in failing circum.
, stances is held TO render the prefer
! ence Of a creditor Illegal and subjects
the debtor TO the penalty Of the
law, very uncertain test OF
bis liability would be created de.
pending upon a wide range Of proof
and frequent injustice might be dsne Il
debtors, who as aften fail 10 appreciate
: their real situation, and honestly believ,
d themselves to be solvent when they al
b not solvent. On the wnole u is a sounc
. policy Of the statute working the leasl
I Injustice which avoids preference only
when given under or in contemplation of
); an assignment.
j "This law not only recognizes bui
e favors and protects a preferred creditor
J. who, in good faith, has thus secured
G Just debt, although It msy cover anc
J, absorb the entire property of the debtor
$ Therefore, to avoid preference
u given 10 a bona tide creditor, IL must be
!, given by an assignment TO nominee, or
K by an instrument that is in fact an as
r. signment, under cover Of another form
The law then, gentlemen. clearly is
that Jacob II. -Topkis had the right Il
give Samuel Slesinger and Davit
e Abramson, or either Of them, sucl
n judgments as he did, IL she was iustly
y Indebted to them or either of them ii
:. the sums named, and the Judgment wa
= honestly given TO secure such debt. not
! withstanding the fact he was insolven
Z or In falling circumstances.
n "ln order TO avoid these Judgment
e you must be satisfied from the evidenc
IS in this case, that, in giving such judg
, ment, Jacob H. Topkis did not intend il
{, good faith TO secure honest debts; bu
!, intended or contemplated insolvency
8 securing them larger share of hi
estate in view Of insolvency, OF intended
d to hinder, delay or defrsud his othe
y creditors
IT "This brings us TO the real issue il
e this case. That is, were these iudg
el ments confessed with fraudulent intent
e For fraud vitiates every contract, an
T. no man may invoke the law TO enforce hi
fraudulent acts.
Applying the law as the court ha
thus laid IL down TO the issues submitte
to you: If you believe from the evidenc
1. In this case, that; In confessing thes
n judgments to Slesinger and Abramson