Court Opinion

ID: 5550475
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:33:58.108772+00
Date Added: 2024-06-11T08:35:04.337694
License: Public Domain

The Chancellor.
The judgment without a specification was good, as against the debtor, and a lien upon his lands. When the statute (21st of April, 1818, ch. ,259. sec. 8.) says, “ such judgment shall be deemed fraudulent as respects any other bona fide judgment creditors, and every bona fide purchaser for a valuable consideration,” it * J r % refers, as I apprehend, to purchasers taking beneficially, and for a valuable consideration, on their own account. It : • did not mean that the debtor might make, in despite of the judgment, voluntary assignments for his own benefit, or ,to prevent his property from being sold on execution, or to pay particular or favourite creditors. The only creditors mentioned in the act are judgment creditors. Purchasers are there mentioned, in contradistinction to creditors, and the word is used in the common and popular sense, The plaintiffs in this case were not purchasers, in the. sense of that act, for a valuable consideration. They paid no valuable consideration. It was a voluntary conveyance in trust for creditors, generally; and the statute defines the particular class of creditors who were to have preference over such a defective judgment; and. those for whose benefit the conveyance was made and intended in *332this case, were not of that description. Though judgment creditors might be included in the general description of creditors 5 j'et that class was not the particular object of the deed, nor did they stand in need of such a provision, for their rights rested upon a better basis. The act ought not to he extended by construction; and the ordinary lien of the judgment creditor, who might happen, through inadvertence, or through the error of counsel, to omit as particular a specification as the act required, ought not to be impaired, except in favour of those particular persons who can bring . themselves, clearly and strictly, within the letter, and within the meaning and policy of the exception.
A conveyance by a debtor of certain lands, in iruit for all his creditors who should tiome in and release their demands, is frau■duleaL
The particular provision in the deed, that the creditors were not to be paid in proportion, &c., unless they should execute and deliver a complete discharge of their demands, was in this case rigorous, coercive, and unjust, for the deed only assigned the real property therein specified. It did not extend to all the property, real and personal, of the grantors, and non constat, they had no other property. They might have had other and sufficient property, both real and personal. The land in question might not pay one fourth of the respective debts, and yet the creditors were not entitled to receive a cent, unless they relinquished the residue of their debts. The condition was oppressive, and without any colour of justice in this ease, inasmuch as the assignment was not general of all the property, but only of a specified part. A partial assignment upon such a condition is pernicious in its tendency, if it be not (as l rather apprehend it to be) fraudulent in its design.
The deed likewise authorized the trustees to sell the property forthwith, in their discretion, and turn the land into money; and if the creditors would not accept of their rateable payments upon the condition imposed, the moneys were to be held in trust for the grantors. By this means the defendants might lose their lien upon the land, as against d>e debtor, and it might become converted into money, t© *333be placed at his disposal. Such a consequence could not be endured, and yet it flows naturally from the provision in the deed. A power of coercion over the creditor, with the reservation of such a resulting trust to the grantor in case the coercion should not be successful, was deemed by the Supreme Court, in Hyslop v. Clark, (14 Johns. Rep. 458.) to be a badge of fraud, and not a fair and lawful assignment.
I am, accordingly, of opinion, that the deed in question is not entitled to be preferred to the judgment lien of the defendants, and that the motion to dissolve the injunction ought to be granted.
Injunction dissolved.