Court Opinion

ID: 6312267
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:17:01.111113+00
Date Added: 2024-06-11T08:59:07.110989
License: Public Domain

The opinion of the court was delivered by
Sergeant, J.
If there are evils attending our system of voluntary assignments and preferences to creditors, by debtors in failing circumstances, they are such as our courts of justice may lament, but have not the power to remedy. It is competent only to the legislature to alter the law as established; and by them, it would seem, it has not been considered expedient to take away the right of the debtor in this respect, which existed at common law. They have preferred making enactments, from time to time, for the purpose' of *244regulating and'enforcing this right. So that it now prevails asa mixed system, its foundations laid in the common law, but modified and regulated by legislative provisions.
Courts can, however, and ought to keep this right within its proper bounds, and to prevent, as far as possible, the introduction of new fangled devices and contrivances, which may run into licentiousness and abuse. Such is the temptation! t0 persons whose embarrassed circumstances force them into an assignment of their property, still to retain a control over it, in some shape or other, that there is no end to the concoction of schemes for this purpose. Every provision, therefore, in a voluntary assignment ought to be narrowly scanned and closely watched, to see that the authority given to the debtor by law is not exceeded. On the one hand, the debtor is, by our law, permitted to grant preferences to favoured creditors, and to stipulate for releases; but on the other hand, he must part with the property and the possession, free from any reservation for his own benefit, or that of his family, and from any control over, or interference with it, and from any contingency on which he may or may not resume it, at his will and pleasure. To allow him to transfer the property, retaining the possession, or to part with the possession, retaining the property, is inconsistent with the nature of such a transaction, and calculated to introduce great abuses.
Several clauses in this assignment are properly treated by the court below as objectionable. In the first place, by the plain language of the instrument, the assignor parts only with the possession of the effects assigned, and not with the property, for twenty-five days. During that time it is impossible to say who is the owner. The assignor holds the creditors at bay, whilst he is, perhaps, trafficking among them, to compromise their debts, for a present satisfaction or security, and their legal power to proceed against the property is arrested. If the assignor may thus fix the property in a neutral position for twenty-five days, he may do it longer, and this, no doubt, would be soon attempted, if the present experiment should succeed. The debtor thus, under the name and guise of an assignment, might entrench his effects against legal process, till some remote period, when it would suit him to set aside the assignment altogether, and resume the possession. Besides, as is justly remarked in the opinion of the court below, the assignees were empowered, during this interval, to sell the goods by retail, without any appropriation being made of the proceeds.
The clause, also, in relation to indemnifying the special bail, is a new feature in assignments, and equally objectionable. He is not a creditor to the amount of these judgments, and it is impossible to say that he will ever become so, as he may never enter bail, and if he should, the assignor might surrender or be surrendered by his bail in discharge of the recognizances.
The power of the assignor to surrender or not, as he pleased *245would enable him to exercise his own will and pleasure over these preferred creditors, by placing their debts in what scale he chose. This is a control which it would be dangerous to permit, and inconsistent with the entire cessio bonorum for the use of creditors, which the law sanctions.
As to the suggestion that the property might still be claimed as a pledge, independent of the assignment, it is sufficient to say, that being intended to pass under the instruments executed, it can be held only under them.
Judgment affirmed.