Court Opinion

ID: 5458074
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:26:25.374073+00
Date Added: 2024-06-11T08:32:45.303351
License: Public Domain

By the Court,

Edwards, J.
There are two grounds on which the plaintiff in this case contends that the assignment in question is fraudulent and void ; first, that the individual property of the copartners is made liable in the first instance to the payment of the partnership debts ; and second, that the assignee is directed not to sell upon credit. The first question is settled by the decision of the chancellor in the case of Kirby v. Schoonmaker, (3 Barb. Ch. Rep. 46.)
If the assignment is void upon the second ground, it must be because its effect is to hinder, delay, or defraud creditors. It is well settled, that, as a general rule, it is the duty of the assignee to dispose of the assigned property at once ; and that, when it can be done consistently with the interests of the parties, it should be sold for cash. The question then arises, whether a specific direction to the assignee to do what is, prima facie, his duty, is, per se, evidence of fraud. It may be, that such a provision is an unwise one, and one that ought not to be countenanced, and when there are any circumstances which go to show that a forced sale was intended, to the injury of the creditors, it ought to be taken into consideration as an important item of evidence, which, in connection with the other circumstances, would justify this court in setting aside the assignment. But, it seems to me, that this is all the effect which should be given to such a provision.
It was also contended that the provision contained in the assignment for the return of the surplus, after the payment of the debts of the assignors, rendered the assignment void. In the cases cited in support of this proposition, Barney v. Griffin, (2 Comst. 363,) Goodrich v. Downs, (8 Hill, 38,) there was an assignment for the payment of a part of the debts of the assignor. *241In this case, the assignment is for the payment of all the assignors’ debts. I think that the order made at the special term should be reversed, without costs.
[New-York General Term,
June 14, 1851.
Edmonds, Edwards and Mitchell, Justices.]
Mitchell, J. concurred.
Edmonds, P. J. dissented.
Order reversed.