The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1898-03-06
So Judge Hiles Decides In the Scott
Case.
NOTHING UNFAIR INTENDED
IN TRANSACTION WITH TRAV-
ELERS INSURANCE co.
The National Bank of the Republic
Makes Another Attack On the
Assignment, Alleging Fraud In
Various Ways, and Prays For the
Appointment of a Receiver.

Judge Hiles yesterday handed down
his decision in the matter of the va
| lidity of the George NJ. Scott & Co. as
signment. The judgment was that the
attachments be dissolved and the
property restored to the possession OF
the assignee, and later in the day the
sheriff withdrew, and Mr.. Anderson is
now again in possession
| Wells, Fargo & Co., the Nationai
Bank of the Republic and six other
creditors, whose claims aggregate about
$4,000. levied attachments on the
property in the possession of the as
signee. The attaching creditors, on
the petition of George NJ. Scott IL co:
and Assignee Anderson, were required
to show cause why the attachments
should not be dissolved.
The attaching creditors claimed that
the assignment was fraudulent and
void. alleging that in 1885 George M.
Scott gave a mortgage to the TraVel-
ers' Insurance company on the real es-
tate on which the corporations prem
Uses are located. on Main street, 10
secure a loan of $4,000. George M.
Scott & Co. appeared to owe Wells,
Fargo & Co. at that time $4,000, but
it was claimed that this was an IN
dividual debt of George NJ. Scott's. Mr..
Scott, it appeared, owned half inter-
est in the real estate, and the corpora
ton the other half. The Travellers In
surance company declined to lend
money to a corporation, and to get
around the difficulty, the George NJ.
Scott company decided its interest in
the property to George NJ. Scott in
dividuaIly, who conveyed 1t and his
own interest as we'll in the property
to the insurance company by mort
gage to secure the loan of $4,000, which
was applied to the liquidation of Wells,
Fargo & Co.'S claim. The attaching
creditors claimed that that transaction
was fraudulent and, under the sta
tutes, invalidated the assignment.
NOTHING UNFAIR INTENDED.
Judge Hiles, in his opinion, found
that nothing unfair was intended by
the transaction, which was made for
convenience, and that no creditor was
on account of it injured or misled.
Technically" the court says, the
debt is the debt of George NJ. Scott to
the insurance company. but actually
it is the debt of the George NJ. Scott
company to the Travellers Insurance
company. and in such case, when the
assignment is being assailed as fraud,
practical Justice requires the court to
consider the actual fact, as the essen
tial and controlling thing, there being
no question of the application of equit-
able eStoppel."
The court further says: From these
findings it seems that the conclusions
of law must be that so far as 1t has
been enquired into on these motions,
the deed is valid, and satisfies the
statute, and that the property in the
hands of the assignee is in the custody
of the law.
This holding does not preclude a
non-consenting creditor from assailing
the deed for fraud, under the general
statute of frauds, or upon any ground
under any head of the general equity
jurisdiction of the courts of the coun- |
try. He can bring a suit to have it
declared void for fraud. In such case. /
a court of equity having once obtained
jurisdiction over the parties and sub
ject matter CT the controversy for one
purpose. could, I have no doubt, make
such orders concerning the corpus of
the assigned property, or its avails.
and relating to its distribution. of
reservation, as would adequately pro-
tect all parties in their equitable and
legal rights and interests therein or in
aid of any process, or execution which
might thereafter be levied against it
in such suit
TT seems to me that this view of the
statute is the only one consistent with
any practical administration of trusts
which may be created or designed I'M
der it. Any other application of it will !
enable a non-c onsenting creditor in
any case. to defeat its operation. by
an affidavit for an attachment in suit
where the validity of the assignment
can be collaterally called in question
only"
His honor then orders the attach
ments dissolved.
ANOTHER SUIT FILED.
Although the first round has been de-
cided in favor of the validity of the
assignment, it appears the controversy
is far from being settled, for a few
hours after Judge Hiles delivered his
judgment, Messrs. Dey and Stewart, on
behalf of the National Bank of the Re
public, filed suit in the district court
against George NJ. Scott & Co, George
NJ. Scott, James Glendinning, H g.
Rumfield, Joseph +. Gallagher. Lilly.
Park Stock Growing association and
Hugh Anderson, assignee of George NJ.
Scott e Co.. praying that the assign
ment made by George NJ. Scott & Co.
be set aside and decreed fraudulent as
to this plaintiff and other unpreferred
creditors; that receiver be appointed
in lieu of the assignee; that an ac-
counting be had between the corpora
ton Of George NJ. Scott & Co. and the
OAiNSio anu ulIeClOTS Oh SAID corpora
ton, and that an injunction issue pre- /.
venting the assignee, Hugh Anderson
from disposing of the property in the
meantime.
In the complaint the deed of assign
ment is set out with the three classes
of creditors and it is alleged that for
a long time prior to the making OF the
assignment the firm was hopelessly in
solvent and that the assets. if the as
signment is allowed to stand. will not
do more than pay the first preferred
creditors in full and % per cent on the
claims of the second class, leaving
nothing for the creditors in the third
class. to which the plaintiff belongs.
1t is further alleged that George NJ.
Scott claims to own individually half
the real estate mortgaged to the Tray
elers' Insurance company, and that the
owns the other half.
TO GET RID OF GLENDINNING.
1t is then alleged that the assignment
was made to defraud creditors in the
third class; that it was the secret in
tention of George NJ. Scott. by means
of the assignment, to get rid of James
and to purchase the as
signed property from the assignee for
his own benefit, and to conceal and
cover up the alleged fact that George ]
NJ Scott had wrongfully used large
sums of the assets of the corporation
for his own purposes. to the injury of
this plaintiff and other creditors 1t
is further alleged that the directors