Court Opinion

ID: 6576462
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:45.938804+00
Date Added: 2024-06-11T15:57:07.076958
License: Public Domain

Hinman, J.
The defendant attached the goods in question, as the property of John D. & Mark Leavenworth. He found them at the store where said Leavenworths had been doing business, in the actual possession, for the time, of Mark Leavenworth; and the question is, whether they can be held, by the attaching creditor, against the plaintiffs, who claim them under a previous assignment, pursuant to the statute of 1828, for the benefit of the Leavenworths' creditors.
The case turns upon the question whether there was any legal reason for the possession, retained, by one of the assignors, after the assignment. The plaintiffs claim, that the case of an assignment, for the benefit of creditors, under the statute, forms an exception to the rule, requiring a change of possession, in order to prevent a transfer of personal property from being deemed fraudulent. That there is, in this respect, a very marked distinction between an assignment for benefit of creditors, and an ordinary sale inter partes, there can be no doubt. Such a distinction was fully established, in the case of Osborne v. Tuller, 14 Conn. R. 529. *211and again recognised, in the case of Strong v. Carrier, 17 Conn. R. 319. In those cases, it was held, that the legal presumption of fraud, arising from the continued possession of the assignor, was repelled, by proof, that the requirements of the statute had been complied with. The reason of those decisions was, that the assignee, under the statute, having complied with its terms, had so made himself responsible to the general creditors, that they could not be defrauded, by any disposition he might choose to make of the property. We are well satisfied with those decisions, and do not intend to qualify them, in the least; but we think it very clear, that this case does not fall within them.
There has been no compliance with the terms of the statute, in this case; and we think, the neglect gives all the opportunity that the most dishonest debtor could desire, to defraud his creditors, should the course taken in this case be sustained. In the case of Strong v. Carrier, it was held, that a general assignment of all a debtor’s estate, without any specification of it, was good, under this statute. This was upon the ground, that the assignment was made in reference to the inventory, which the law directs the trustee to make and return to the court of probate. And the court say, that the deed is the introductory measure, to be completed, by the return of the inventory, which then becomes parcel of the proceedings, and may be treated as if attached to it. When this is all done, it is obvious, that the creditors can have no right to complain of any disposition the trustee may make of the property. If the judge of probate has done his duty, in taking a sufficient bond, the creditors are always secure, to the full extent of the property assigned. The assignment conveys it to the trustee, for their benefit; the inventory specifically shows what it is, and that it has come to the trustee’s hands; and the bond secures them against any improper disposition of it.
But, before the inventory is returned, the bond, in very many cases, if not in most of them, would be of little practical value; as a statement of the facts, as we suppose they existed in this case, will show. A general assignment is made of a stock of goods in a country store, without any specification of them. Obviously, no one but the assignor can know what property was conveyed; and very probably *212he would not. If under such circumstances, he is left in possession, retailing the goods from the store, as before the assignment, it is scarcely to be expected, that he would be very careful to account for it all. The temptation to make use of the avails, as he had been accustomed to do before the assignment, would, with most men, be irresistible. By a statute passed in 1837, (Rev. Stat. 366.) trustees, under the act of 1828, are authorized, after the return of the inventory, to appoint, with the consent of the court of probate, the assignor, as his agent, to make sale of the estate. The precise object of this statute, we are aware, is not very apparent. It was passed before the case of Osborne v. Tuller was decided, and, perhaps, it was thought, that without some such provision, the employment of the assignor, as an agent, would, in all cases, be deemed fraudulent. However this may be, we think it entitled to some consideration; and, to give it any effect, it is necessary to hold, that the assignor cannot act as the agent of the trustee, in any case, before the inventory is returned. It is apparent, we think, that such was the understanding of the legislature; and in this view of it, the statute is entitled to respect, as a legislative construction of the common law, on the subject. The judge at the circuit, for the purpose of enabling the jury to pass on the questions of fact involved in the case, instructed them, that the employment of one of the assignors to sell the goods, and the delivery to him of their possession, for the purpose of enabling him to sell them, as their agent, did not render the assignment, in law, fraudulent, as against attaching creditors. This, inasmuch as it was not proved, or claimed, that any inventory of the assigned goods had been returned to the court of probate, was erroneous. We think this omission to perfect the inventory, before the employment of the assignor as agent to sell, did render the assignment fraudulent in law and void, as against creditors; and the jury should have been so instructed. On this ground, we advise, a new trial.
In this opinion the other Judges concurred.
New trial granted.