Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-08-10

WIN great uhanimlty OK opinion OF Federal
courts in favor Of the rule as stated in
White VS.. Cotzhausen Ii binding upon this
federal courts have followed state decisions
In conformity to the wsll-known rule here
| tofore stated. That would leave this court
| to adopt the construction of this statute
which 1t should consider most consisten.
with reason and justice. and to my mind
| that stated by Mr.. Justice Harlan is no,
only Just. but rests upon reasons and lrGu-
| ments which are incontrovertible.
1T Is contented by the attorneys for the
defendants that a court of equity has Io
| jurisdiction in this case because the CON-
platnants have not reduced their demands
to judgments at law: that general creditors
| can not attack an assignment for fraud
without first exhausting their remedy at
law, which involves obtaining Judgment
and return of execution nulla bona. But
this Is not bill attacking and asking TO
avoid an assignment for fraud. II prays
the court to declare and treat as an assign
| ment for the benefit of creditors equally
and generally. certain transfers by the
debtor. In other words they allege that
certain acts by the debtor have created u
trust In favor Of his creditors, and they ask
ana administer the trust for their beneht.
| If the facts. under the proper construction
OF the statute. support the allegations Of
| the bill there Is no trouble about equity
| jurisdiction In this case. ,es shown by the
cases referred to by counsel for complain
| ants in the Supreme Court. and in the
court Of appeals of Maryland.
1T may also be stated that Judge Cox of
| this court recently held In the case of
Brown VS.. Mclean that this court has jur-
isdfction in equity to entertain a bill by a
simple contract creditor to avoid prefer
ences In an assignment and administer the
trusts thereby created ! do not thinl, thai
the question of jurisdiction in equity to de-
clare void for fraud an assignment neces-
sartly arises In this case and therefore
have not considered it. This leaves for con-
sideration the question whether the facts
| bring this case within the rule in White vs..
Cotzhausen.
The Strasburger Case.
The facts. as they appear from the plead
ings and af1davits. are that the defendant,
Strasb0rger. for some years prior to the 9Th
day Of July. 1893, was q retail dealer in
boots and shoes in this city having a store
at No. 726 It'll street. and after April 1.
1888. store also at 1908 street. That on
the 9TH day Of July, 1893, he was insolvent.
owing not less. and probably considerably
more, than 1900; that his only visible and
known assets were the stock Of boots and
the last mentioned date he voluntarily APP
peared In this court, on the law side thereof,
and confessed three separate judgments in
Goldstein and the Cohen Adler Shoe Com
pany, in the aggregate sum Of $9.O76. IL
that on the same day said judgments were
and. by virtue thereof. the defendant, Rams
dell. the marshal Of the District, seized and
levied upon all the property of the defend
ant. StraSburger in both stores and closed
the stores and they have not been opened
since. and the defendant. Strasburger, has
Instituted no proceeding to have them re-
leased from such seizure; that the marshal S
appraisers have valued the said goods and
property at 81 1886: that that Is about what
the goods would realize at auction, II sold
by the marshal; that the marshal adver-
tised the property for sale on the Sth day
of July, to take place on the Goth Of that
month. There is no serious controversy
conclusion to be drawn from them? The
defendant says that these creditors. in
whose favor these Judgments were con-
fessed. were pressing him, and he confessed
the judgments as a security for their debts,
In good faith and without the intention of
thereby turning over all his assets to them.
and with the expectation of remaining in
and continuing his business and paying of
these judgments, and he believed that they
would be satisfied with the confession Of
does not say. however, that there was any
agreement that they would not issue exc
cutions; and had there been and they had
violated 1t so soon he would undoubtedly
have attempted to restrain them, or, at
least, would have complained In some way.
1t Is true that on the 18th of July, the
day before the restraining order was issued
In this case. he notified the marshal that
he claimed he had made an excessive levy.
He does not claim to have notified the
plaintiffs in the executions that they were
violating an agreement or confidence even,
by Issuing execution. The notice to the
marshal came after his stores had both
been closed twelve days. long enough to
have ruined his business, even IL the levies
had been released after the notice. 1t is
perfectly apparent, however. that the levies
are not excessive. even IL the cost value of
the property Is as great as contended by
Strasburger. II 1t was understood as Stras-
burger says 1t was, that the judgments
were confessed as security, they could
not operate as such without the issue and
levy Of execution. The defendant must be
considered to be a man of at least ordinary
reason and Judgment. and every man so
endowed Is held In law to intend the reas-
orable and probable consequences Of his
acts. and no reasonable man. having ordi-
nary knowledge Of business. owing s29 OOO
with assets which might be sold for s23. 900
In the ordinary course Of business. confess
Ing judgments for 5000. can be held to
have expected or intended to remain In and
conduct his business after that. He must
be held to have intended exactly what fol-
lowed in this case, the seizure Of his entire
assets for the benefit of the creditors in
whose favor he confessed judgments
Should the marshal be permitted to sell
over to the plaintiffs in them, the transac-
ton would have precisely the same effect
as X the debtor had made a formal as
signment for the benefit of creditors. pre-
ferring the ones in whose favor the judg-
ments are. 1t puts him out Of business and
gives these particular creditors all his as
sets to the exclusion Of others. II there be
any difference between the effect of what
he has done and that of formal assign
ment with preferences, 1t Is that in the
form he has adopted he has reserved to
himself any surplus after paying the pre-
ferred creditors, rather than giving 1t to the
other creditors, and that could hardly be
urged in favor of his act. AS what he has
done Is In effect, though not in form, an
assignment for the benefit OF creditors
with preferences. the court should so treat
it by taking charge of the assets and ad-
mtntstering them for the benefit Of all ere IL
tors equally. declaring void the attempted
preferences. 1t follows that an injunction
should be granted and receiver appointed
as prayed"