Court Opinion

ID: 6410621
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:25.181694+00
Date Added: 2024-06-11T15:51:21.661028
License: Public Domain

Dewey, J.
The mode in which the transfer of the property was made in the present case, though not in form that of the common assignment of an insolvent to a trustee of his own selection, for the benefit of those creditors who might elect to accept the same, and discharge their debts, is equally liable to the objections so fully stated in the cases of Wyles v. Beals, 1 Gray, 233, and Edwards v. Mitchell, 1 Gray, 239. As a transfer, it would have no validity against any attaching creditor who might elect to charge the property, or the avails thereof, while in the hands of the assignee.
The further inquiry is as to the extent to which the supposed trustee may have discharged himself from liability by payment, or appropriation of the proceeds of such property, made before the claims of any attaching creditors had intervened.
So far as the avails of the property received by the trustee had been, with the consent of the debtors, actually applied to the payment of debts due any of their creditors, before the institution of the present suit, the trustee is to be discharged.
Also in cases where he acted as the attorney of any creditor, clothed with authority to collect the debt, and had, as such attorney, passed to the credit of his client the amount of such debt, debiting himself therewith, that would be an appropriation of the money that would discharge him from liability to a subsequent suit by another attaching creditor.
The giving to a creditor his own negotiable promissory note, or any written promise to pay the amount of a debt due a creditor, if made upon the actual execution of a discharge of the original debt by such creditor, would have the like effect.
But a mere stipulation by the supposed trustee, either oral or in writing, stating, to a creditor for whom he was not attorney, that he held in his hands certain assets of the debtor, and that he would pay such creditor twenty five per centum of his debt, if he would receive the same in full discharge of his debt, *120would not exempt him from liability to this process in behalf of any other creditor. This, at most, would be a no more eflective promise than would exist in the case of an ordinary assignment made by an insolvent debtor to an assignee of his own choice, where the assignee had accepted the trust, and a creditor had accepted the assignment. But such assignments are not valid and effectual to protect the property against attachment by a trustee process.
As we understand the facts stated in the answer of the supposed trustee, he must be held chargeable to some extent, under the proper application of the principles above stated.

Trustee charged.