Case Name: Samuel James, Assignee, vs. The Mechanics' National Bank et als.
Court: Supreme Court of Rhode Island
Jurisdiction: Rhode Island
Decision Date: 1879-10-18
Citations: 12 R.I. 460
Docket Number: 
Parties: Samuel James, Assignee, vs. The Mechanics’ National Bank et als.
Judges: 
Reporter: Rhode Island Reports
Volume: 12
Pages: 464–466

Head Matter:
Samuel James, Assignee, vs. The Mechanics’ National Bank et als.
An assignment made under Public Laws R. I. cap. 723, § 1, of June 20,1878, b}r an insolvent debtor or a debtor in contemplation of insolvency, does not avoid preferences given by tbe assignor to his creditors within sixty days prior to the assignment.
Such an assignment is not a proceeding against the debtor within the meaning of said chapter 723, § 4.
Such an assignment is a voluntary one, and the assignee takes only the rights of the assignor.
Bill in Equity to set aside a transfer of personalty. On demurrer to the bill.
Public Laws R. I. cap. 723, § 1, of June 20, 1878, provides: “ Whenever the property of any debtor shall have been attached or levied upon by any creditor, the debtor may, at any time before such property shall be sold, and the proceeds thereof applied to the payment of the claim or judgment upon which such attachment or levy shall have been made, within sixty days after such attachment or levy, suspend such attachment or levy by making and having recorded in the records of the town or city where the assignor resides, or where any of the real estate is located, an assignment of all the property and estate of such debtor not exempt by law from attachment, to some citizen of this State for the equal benefit of all his creditors in proportion to their respective claims, except as is pi ovided in the third section hereof. And all attachments and levies so suspended shall be dissolved at the expiration of thirty days thereafter, unless otherwise ordered by the Supreme Court in some proper proceeding.”
Section 3 of the same chapter provides : “ No assignment hereafter made for the benefit of creditors shall give to any one creditor any preference over the claims of any other creditor except the creditor be the United States or the State of Rhode Island, or for the wages of labor performed within six months previous to such assignment, not exceeding one hundred dollars to any one person.”
Section 4 of the same chapter is recited below in the opinion of the court.
The bill charges that one Stephen Brownell, being indebted to the respondent bank on notes maturing but not matured, executed September 3,1878, a power of attorney to one of the clerks of the bank to transfer bis stock in it to one Tingley, in trust to protect the bank, Tingley being the cashier. This power of attorney was dated August 80, 1878. September 6, the creditors of Brownell attached his stock, and the same day Brownell’s attorney, at his direction, transferred the stock to Tingley in trust. November 4, 1878, Brownell made an assignment to Samuel James of all his property for the equal benefit of his creditors. Thirty days thereafter the attachment was dissolved by law.
July 19, 1879, James, assignee, filed this bill against the bank and Tingley, claiming that the assignment vitiated the transfer of stock and praying that the respondents might be compelled to return the stock or to account for its value and its profits in favor of Brownell’s creditors. The respondents demurred to the bill.
October 18, 1879.

Opinion:
Dureee, C. J.
The principal question is whether a voluntary assignment executed by an insolvent debtor or by a debtor in contemplation of insolvency, under Pub. Laws R. I. cap. 723, § 1, of June 20, 1878, for the purpose of dissolving an attachment, has an effect likewise to avoid preferences given by the assignor to his creditors, within sixty days prior to the assignment. The complainant contends that it has this effect under § 4. That section declares that " conveyances and payments made and securities given by an insolvent debtor, or by a debtor in contemplation of insolvency, within sixty days of the commencement of proceedings against such debtor under this act, with the view of giving a preference to any creditor upon a preexisting debt, or to any person under liability for such debtor, over another creditor, shall be void as to all creditors receiving the same who shall have reasonable cause to believe that such debtor was insolvent at the time of such preference."
The complainant contends that the assignment was " the commencement of proceedings against the debtor under the act." We think such a construction is inadmissible. The assignment is a proceeding ly and not against the debtor. The debtor makes it himself of his own accord, and therefore it cannot, without doing violence to the language, be held to be a proceeding against him. The language is appropriate only to the commencement of some legal proceeding against the debtor under the act.
We think it is quite clear that the object of § 1 is to take advantage of the displeasure which a debtor naturally feels when bis property is attacked, and to hold out an inducement to him to make an assignment for the equal benefit of all his creditors by providing that the assignment, if made in sixty days after the attachment, shall dissolve it. If the object had been to have the assignment avoid all preferences created within sixty days, we can conceive of no reason why the legislature should have limited the right to make an assignment having this effect to the case where there had been a previous attachment or levy on the property of the assignor.
Charles Hart $ William Cr. Roellcer, for complainant.
Thurston Sf Ripley, for respondents.
We also think the assignment is to be regarded as a voluntary assignment, and consequently that the assignee succeeds only to the rights of his assignor. He cannot maintain a suit like this.
Demurrer sustained.