Court Opinion

ID: 4926409
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:57:23.993342+00
Date Added: 2024-06-11T08:14:21.449164
License: Public Domain

Mellen C. J.
delivered the opinion of the Court.
This is an action of trespass de bonis asportatis. The plaintiff claims title to the goods in question under a certain deed of assignment made and executed on the 18th of May, A. D. 1832, by Cornelius W. Austin, the assignor, to Robert M. Todd, the plaintiff and assignee, and three of the creditors of Austin. It was executed in Calais, in this county. The defendant, late sheriff of the county, justifies the taking by virtue of a writ of attachment in favor of one Joseph Prescott, against the said Austin. The attachment was made on the 31st of May, 1832. Several objections have been urged by the counsel for the defendant against the validity of the assignment, and against the plaintiff's right, on any ground, to maintain this action: and on the part of the plaintiff it has also been urged that the conduct of the defendant,, in Violating the plaintiff’s possession of the goods in question and talcing and carrying them away, cannot be justified by the process which he executed. There is no intimation of actual fraud in respect to the assignment; but it is contended that it contains certain provisions which, in legal contemplation, render the assignment void and inoperative.
One objection to the assignment, as it respects the creditor whom the defendant represents, is, that it is made to an assignee living out of this State, to secure his debt and the debts of two other foreign creditors, and to the prejudice of Joseph Prescott of Calais — one of our own citizens; contrary to the well known principle, recognized and sanctioned in Fox v. Adams and trustees, 5 Greenl. 245. The answer to this objection is, that though the action, in which the attachment was made, was brought in the name of Prescott of Calais, still the jury have found that the property of the note sued was not in Prescott but in Richardson &/• Whitney of Boston, who also live out of this State. As to this point the real creditors claiming under the attachment, and Todd, claiming under the assignment, both stand on equal ground; and therefore the principle of policy on which the distinction, which has been invoked, reposes, does not apply in the case before us.
Another objection is that all creditors who should execute the assignment should cause their claims to be written on the *45schedule B. Surely a compliance with this provision could be neither an injury or inconvenience to any creditor; and could not produce any but useful results. Indeed, it was merely suggested by the counsel.
Another objection urged, is, that the assignment requires that every creditor shall execute a release to Austin of all claims and demands against him, so far as such claims and demands 'shall be paid, or they shall be saved harmless from their liabilities by the application of the trust funds thereto, in the manner prescribed in the assignment, and, no further. This amounts to a release of no subsisting claim; it is a mere provision that a partial payment shall amount to a discharge pro tanto. But, as the objection has been made, we will go further and state explicitly, that if the assignment had provided for an absolute release of all claims and demands, in consideration of the assignment, it would not have impaired the validity of it. In Hatch v. Smith, 5 Mass. 42; Marston v. Coburn, 17 Mass. 454; Andrews v. Ludlow, 5 Pick. 28, and Lupton v. Cutter, 8 Pick. 298, there was a provision for a release of debts by the creditors : yet it was not considered by the counsel or the court as affecting the validity of the assignments. In Halsey v. Whitney, 4 Mason, 206, a review of all the cases, bearing on the point, and a careful examination of them!, led the learned Judge to the Conclusion that the assignment was valid, though containing a general release of the debtor, by the creditors. This Court, in Fox v. Adams and trustees, before cited, evidently concurred in that opinion, though the cause was decided on another ground. And in the Canal Hank v. Cox and trustees, 6 Greenl. 395; it was expressly decided, though the opinion seems to have been misunderstood, that a provision for the release of the assignor and his indorsers and sureties, did not, in any manner, invalidate the assignment. We have here alluded to the foregoing decisions for the purpose of clearly expressing our opinion on the point, and the principles and grounds on which it rests.
Another objection to the assignment in the present case, is, that it contains a provision for the payment over to the assignor of the surplus, if any, after paying certain preferred creditors, and the other creditors who should become parties to the assignment, by signing and sealing the same. This surplus, would, of course, *46include the sums due to creditors who declined or neglected to become parties to the assignment, in the manner before mentioned. In the case of Andrews v. Ludlow, above cited, there was a similar provision, which, however, was not considered as impairing ■the effect of the assignment. In Halsey v. Whitney, 4 Mason, 222, a provision of the same nature was critically examined by Mr. Justice Story with his usual acumen. He observes, “ What is the nature of this surplus as it stands on the face of the assignment ? It is not of any specific sum to be paid to the debtor, whether his debts are wholly paid or not, but of such surplus only as shall remain after indemnifying and paying fully all the creditors who shall come in under the assignment. . There is no ground for saying, that if all his debts were paid, the debtor may not honestly reserve the surplus to himself; if there was no such reservation, it would constitute a resulting trust by mere operation of law; if all the creditors should not choose to come in, and accept the terms of the assignment, there must necessarily arise a ¿resulting trust, as to the surplus, in favor of the debtor, and the charge is therefore merely an expression of that which the law would imply. The creditors are at liberty to come in if they please; if they do not, the debtor stipulates that the assignment shall not carry the whole interest, but so much only, as is necessary, to discharge the debts of the" assenting creditors : and the residue remains as a fund for the payment of other creditors, if they choose to attach.” Here is a lucid statement of the law upon this subject, and of the reasons on which it is founded. We forbear citing any other cases to this point.
Another objection urged against the plaintiff’s right to maintain the action, is, that it appears by the schedule of property assigned, compared with the amount of the debts due to the creditors who have signed and sealed the assignment, there is property enough in the hands of the assignee to pay those debts and satisfy the claims of the attaching creditor also. This objection is now mentioned for the sake of order; it will be noticed again in the close of this opinion, after we have considered some of the points relied on by the plaintiff, against the right of the defendant to take the goods in question out of his possession.
In the first place, by way of answer to the defendant’s last objection, it is contended that the consent of all the creditors, named *47in the schedule of creditors, is to be presumed; because, by the terms of the assignment, such assent must have been for their interest ; as no release was required, or discharged for anything beyond the sum paid. The reasoning of the court in Halsey v. Whitney, has been appealed to in support of this argument. In the case before us the assignment excludes all implied or presumed assent, and requires it to bo manifested under the creditor’s hand and seal, as before stated. It also requires that every creditor who shall come in under the assignment, shall give six months credit for the balance of his demand, niter deducting the amount received by him out of the trust fund, calculating the six months from the time when the trustee shall have executed the trust, on the penalty of forfeiting such balance, by instituting process for recovery of it within that time. Can the court presume an assent to these terms ? They are so manifestly in derogation of a creditor’s rights as, in our opinion, not to justify the presumption of assent. In addition to this we would refer to the case of Russell and al. v. Woodward, 10 Pick. 408, in which the assignment required no release; but the trustee was directed, after deducting necessary expenses, &c. &c. to pay the amount of the trust fund among all the creditors in rateable proportions : hence it was contended that the assent of creditors must be presumed. But Shaw C. J. in delivering the opinion of the Court, says, “ It must be considered that by assenting to and affirming such an assignment, the creditors do in effect consent that the whole of such insolvent’s available property — shall go into the hands of a stranger, appointed by the debtor and under his direction. We think it would be difficult to presume, without proof, that the creditors have assented to an arrangement which thus defeats their legal remedies, especially against a creditor, who by bringing his suit and attaching the property, has expressed his dissent from, and disaffirmance of the assignment.”
It has also been made a question whether the process to which Prescott resorted is a legal one, and compatible with the rights of the assignee, when the object of the attaching creditor is to avail himself of that portion of the property assigned, which may not be wanted for the purpose of satisfying the demands of those-creditors who have come in under the assignment prior to such *48attachment. It has been said, that it produces an unnecessary derangement and delay, prejudicial to the interests of all concerned. On the contrary, by our law, a creditor generally has a right to attach the property of his debtor and take it out of his possession and retain it until judgment, notwithstanding the inconvenience and delay and expense which it may occasion. In the above cited case of Russell and al. v. Woodward, it appears the defendant^ attached the goods, then in question, as a deputy sheriff, in behalf of a creditor of the assignor, though the usual course has been to use the trustee process as the remedy in such cases; yet the learned counsel who argued the cause, did not notice the attachment of the goods as an illegal or objectionable proceeding. In the present instance a trustee process would not have availed ; as the assignee is an inhabitant of the province of New Brunswick, where, we are informed, no such process could be sustained in such a case as this: We apprehend the action of the attaching creditor and the attachment made by the defendant, were not, in a legal point of view, objectionable.
The only remaining question is, whether the verdict, which was returned for the plaintiff, ought to stand, according as the facts appear on the report of the Judge, or be set aside and a new trial granted. By the report it appears, that the amount of property and debts assigned, was - $2307,71 and that the amount of debts due to the creditors who have formally assented to the assignment, are only 1490,43
Leaving an overplus of property in assignee’s hands of $817,28
If the facts are in reality such as they thus appear to be, there can be no reason why this action should be maintained, and the attaching creditor defeated in the pursuit of his legal rights. The counsel for the plaintiff, however, alleges that the debts assigned. are of very little value in fact: and, with the property assigned will not prove sufficient to satisfy the claims of the creditors who have assented to the assignment. If the fact be so, on a second trial, the plaintiff will have an opportunity to prove it. As we were satisfied from the examination of the report, that there must be a new trial, we have deemed it proper and useful to give our opinion upon all the points of law that were raised, so that another trial may be final in all respects.
Accordingly the verdict is set aside and a new trial granted.