Court Opinion

ID: 7131141
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:18:58.013833+00
Date Added: 2024-06-11T16:14:28.486277
License: Public Domain

JUDGE PRYOR
delivered the following dissenting opinion:
As between an attaching creditor and a party to whom-possession had been delivered by the debtor under an agreement to do so in satisfaction of his debt, the creditor in, possession would have the prior equity; but where the transfer, of the title and possession is properly assailed as having been made in contemplation of insolvency, and with a design to prefer creditors, it presents a different question. The statute having been enacted to prevent an insolvent debtor from preferring one creditor to another, should be so construed as to carry into effect the legislative will, and the-objection to the opinion of the court is, that in effect it nullifies the statute. That there may be a parol assignment of a chose in action, so as to vest the assignee with an equity, is not doubted; but when moneys have been advanced or loaned to one to enable him to speculate on his-own account, under a promise that what he buys shall be sold by the party advancing the money, his transfer of the.*181.possession after becoming embarrassed, and in contemplation of insolvency, with the design to prefer, brings the case clearly within the act to prevent insolvent debtors from preferring creditors. It is said, however, that the design to prefer does not exist because the debtor is only complying ■with a promise made at the time he received the money, .and the delivery of the property as an indemnity is but the consummation of the agreement. If so, the loan of money under a promise to mortgage certain property, then in existence or thereafter to be acquired, is not within the statute, although the borrower, when ascertaining his embarrassed ■condition, complies with his promise by executing the mortgage long after the money has been obtained. The same equity exists in the one case that arises in the other, .and such transactions caused the enactment of the law preventing unjust preferences. If a lien exists by reason of the contract, of course this lien will be enforced; but as I understand the facts of this case, the appellant had no lien By reason of his advances to enable the borrower to purchase on his own account, and on the failure of the party to comply with his promise, he could be made to answer in damages. This was simply an agreement to indemnify the creditor for .the loan of his money by sending him the tobacco purchased to sell on commission.
A promise by the debtor to pay his creditor out of a particular fund gives him no lien, nor does it vest the debtor, when he becomes insolvent, with the right to prefer. An agreement that vests the creditor, at the time the money is loaned, with an equitable title to certain property to secure its payment would not be embraced by the statute, or cases might occur .where the period intervening between the loan <of the money .and the execution of the mortgage or the *182transfer of the property, is of such a short duration as would! authorize the chancellor to say that the acts were in effect-simultaneous, as where the mortgage was not signed by all the parties at the same moment, or not acknowledged and: perfected on the same day; but where a mere promise or agreement is made to mortgage, and the party becoming-insolvent makes the preference, although in good faith and with the purpose of* complying with his promise, it is nevertheless within the statute, and an equitable distribution: should he made.
I therefore dissent from' the opinion rendered.