Court Opinion

ID: 8297320
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:08:43.261691+00
Date Added: 2024-06-11T16:44:08.210660
License: Public Domain

Freeman, J.,
delivered the following dissenting opinion :
I cannot agree with the conclusion reached by a majority of the court.
The object of the statute of 1881 is to prevent preferences by a failing debtor to his creditors. It renders void as against a general assignment made within the specified period, any mortgage or deed of trust, or. other conveyance made for the benefit of any creditor. It is conceded a mortgage or deed of trust made to the creditor would have been within the statute. It is not, however, either these conveyances. It- is a conveyance or transfer direct to the creditor, in payment and satisfaction of the debt. The question is, is this a conveyance for the benefit of the creditor within the purpose of the statute? It is a direct appropriation of the property to the discharge of the debt, and thus the creditor gets the benefit of this property to the extent of the discharge of his debt. I •am unable to see how a conveyance made to a trustee, who should sell the property for the benefit of the *522creditor, can be within the statute, and a conveyance of that property directly to the creditor is not. In the latter case the creditor may buy the property himself at the trustee’s sale, and thus get the property appropriated to his debt, and so the result, in each case may be the same. Yet this is forbidden; but by the opinion of the majority, he has but to take the conveyance direct to himself, instead of having a trustee, and he can thus avoid the statute.
The result of the opinion is, that a failing debtor may appropriate all his property, piece by piece, or in gross, to any favored creditor or creditors, and leave the others nothing, thus practically rendering the statute nugatory. There is no case where a preference may not be given to the extent of the entire property of the debtor, if his creditors will only agree to the price he may put upon his property. There will seldom be disagreement in such cases, as to refuse to agree on the part of the creditor, will compel him to take his chances for a pro rata under a general assignment.
I cannot agree that this is the proper construction or meaning of the statute, because it will in practice defeat its operation entirely, except 'at the option of the debtor and favored creditor.
For these and other reasons that might be given, I dissent from the views of the majority.