Court Opinion

ID: 3554148
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:05:46.473092+00
Date Added: 2024-06-11T13:46:05.314103
License: Public Domain

The act of 1834, relating to voluntary assignments for the benefit of creditors, which remained in force until the General Statutes, provided that no assignment for the benefit of the creditors of any debtor making the same shall be valid, unless it provides for an equal distribution of all the estate, rights, and credits of such debtor among all his creditors in equal proportion to their respective claims. Laws 1834, c. 163; Rev. St., c. 134, s. 1. In the revision of the statutes in 1867 a substitute for the act of 1834 was enacted, providing that "Every assignment made by any debtor for the benefit of creditors shall provide for a proportional distribution of all his real, and personal estate, except what is exempt from attachment, among all his creditors, and, however made or expressed, shall be construed to pass all such estate." Gen. St., c. 126, s. 1. No change has been made since the General Statutes. G. L., c. 140, s. 1. Whether the change *Page 484 
made in the General Statutes was designed to have any other effect than to guard against the defeat of assignments from informality and technical defects we need not determine. The present statute, like the act of 1834, requires a proportional distribution of all the estate of the debtor, except what is exempt from attachment, among all his creditors. Section 2 provides that "No assignment shall be valid until the person making the same shall make oath, which shall be certified thereon, that he has placed and assigned, and the true intention of his assignment is to place in the hands of the assignee, all his property of every description, except what is by law exempted from attachment, to be divided among all his creditors in proportion to their respective claims." A preference of creditors, allowed at common law, is not permitted in assignments under the statute, and a discrimination or preference in favor of an individual or a class over the general creditors defeats the assignment.
The plaintiff's title to the stock of goods in controversy depends upon the validity of the assignment made to him by Kelly prior to the defendant's attachment. To maintain his action he must show all assignment in conformity to the statute. This he has failed to do. In form the assignment was sufficient, but in fact it was in direct violation of the requirements of the statute. It did not secure "a proportional distribution of all the estate of the debtor among all his creditors." After he had determined upon a distribution of his estate among his creditors and had informed the plaintiff of his intention to make him his assignee, and in contemplation of the assignment which was then prepared and ready to be executed, he paid the plaintiff's personal claim in full, and retained the sum of eight hundred dollars with which he paid his other workmen in full, on the same day after the execution and formal delivery of the assignment and before the transfer of his property to the plaintiff as assignee.
The payment of the plaintiff's claim, the execution of the assignment at the same meeting, and the payment of the workmen being all done in pursuance of the debtor's original purpose, must be deemed in law one transaction; a transaction consisting of a series of acts intended to produce one result, — the distribution of the debtor's estate among his creditors, securing to the plaintiff and the other workmen payment of their claims in full. Such a distribution of the estate was not a compliance with the statute, and the assignment must be deemed in fraud of its provisions and void as to creditors.
Judgment on the verdict.
DOE, C. J., did not sit: the others concurred. *Page 485