Court Opinion

ID: 5547682
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:22:14.276213+00
Date Added: 2024-06-11T08:34:57.790738
License: Public Domain

*The Chancellor :—The allegation in the bill, that Pittman is insolvent, is not denied in his affidavit. This court will never, for a moment, sanction the idea that debtors in failing circumstances shall be permitted to put their creditors in the power of an insolvent assignee, by a voluntary assignment of their property to him, although it is expressed to be for the payment of their debts, or for his indemnity against prior responsibilities. They may lawfully prefer one creditor to another, and indemnify their sureties in preference to either; but they have no equitable right to jeopardize the honest claims of any, by assigning their property to trustees who are irresponsible. And the proper course for this court in such cases is to appoint a receiver, on the application of the parties for whose benefit the fund is assigned. Where the assignment is to a surety for his indemnity, the creditor has an equitable claim upon the fund for the payment of his debt; and the surety has no right to divert it to any other object. Bank of Auburn v. Throop, 18 John. Rep. 505; Maule v. Harrison, 1 Eq. Ca. Abr. 93; 11 Ves. Jun. 22; 5 Bac. Abr. tit. Obligation, D. 4.)
In this case the assignee is personally responsible for the payment of the complainant’s debts, and cannot, therefore claim to retain the demands assigned until they pay his private debt due from the assignor. A receiver must be appointed, with the usual powers, and a reference to a master is directed, to appoint a suitable person and to decide as to *300the amount and competency of sureties to be given. But the defendant Pittman is not required to pay over the money actually collected by him, under the assignment, except so far as it exceeds the amount of his own debt.