Klapp's Assignees v. Shirk

A voluntary assignment for the benefit of creditors in the manner authorized by law, is not avoided by the property being left in the possession of the assignor. To avoid the deed, the fraud must be in the assignment itself. On the delivery of the deed the property in the goods vests in the assignees, for the benefit of creditors, and no subsequent fraudulent dealing between the assignor and assignees, can reinvest the goods in the assignor, or render them liable to levy as his property; the execution creditor stands in the same position as the assignees, and there was no bona fide purchaser a party to the suit.

Error, to the Common Pleas of Lebanon county. Feigned issue. Josiah II. Klapp, on the ninth day of June, 1849, executed a voluntary deed of assignment for the benefit of his creditors without preference, to Daniel Klapp and Jacob Miesse, who on the same day accepted the trust; and on the 23d day of June following filed their bond, the security of which having been approved; and also on said day, an inventory of the estate of said assignor, so far as the same came to their knowledge. On the 30th day of June, 1849, William Shirk, the judgment creditor, had a fi. fa. issued out of the court of Common Pleas, upon which fi. fa. the sheriff on the same day levied upon personal property of said assignor, and had the same sold; the amount raised on said sale was paid into court, and a feigned issue directed to try whether the money belonged to the assignees or William Shirk, the execution creditor. The property sold on the execution had been removed by the assignor, put on a Union Canal boat to be conveyed to Reading. Eefore the sale the assignees notified the sheriff not to sell the property levied on, since the same belonged to Josiah H. Klapp, and passed under the deed of assignment to said assignees, for the benefit of the creditors of said assignor. Pearson, J., stated in his charge that “the assignment and subsequent proceedings are regular and conformable to law so far as appears on their face. The defendant levied on certain property belonging to the assignor at the time of the assignment, had a sale made by the sheriff, and this issue is directed to ascertain who is entitled to the money. It appears that appraisers were appointed by a judge of the court, who proceeded in presence of the assignor and assignees to make an appraisement of the effects, and it also appears that the assignees had certain articles appraised to be delivered over to the assignor, undór the supposition that he was entitled to retain all such as were exempt from execution. — ■ They gave over to the assignor what they had appraised to the value of thirty dollars, and he held and retained them for his own use and benefit. In making that appraisement the most gross want of care was manifested. . Chests, trunks, a bureau, bookcase, &c., were appraised without opening or examining their contents. The appraisement list shows all those commodities appraised at about half the price the empty articles brought at sheriff’s sale, and it is in proof that they were all filled with valuables. All the property remained in the possession of the assignor for a short time, and when he was about to remove to Reading, one of the assignees went there, as he declared, to see that nothing was taken by the assignor except what had been appraised to him, and those he was permitted to remove as his own. They were placed on a canal boat by him and started in the direction of Reading, and when near the county line were seized by the sheriff on a fi. fa. issued at the instance of the defendant. The sheriff there set apart for the use of Josiah H. Klapp all the articles exempt from execution, and sold the balance for the sum of f 197. Previous to the sale notice was given to the sheriff that plaintiffs claimed the property under the assignment. “ On this state of facts several questions of law have been suggested to the court. i( The defendant contends that the whole transaction is fraudulent, that the assignment was colorable, and intended as a means of placing the property of J. H. Klapp out of the reach of his creditors for his benefit. “ Of the question of actual fraud you áre the constitutional judges. If the object was honest, the design to 'have the effects equally and fairly distributed among all the- creditors, it was meritorious and proper. If dishonest, and done with a view of securing the effects from seizure and retaining them in the hands of the assignor, to enable him to carry them off for his own benefit, without accounting for them by the assignees, it is void. That fraud if it exists would taint the whole assignment. But the question does not necessarily arise in this case. It seems that through some mistake or misapprehension of the law, the assignees had the property before referred to appraised for the assignor, and gave the same over to him to hold as his own. It was removed by him as his own, with the consent of -the assignees, and in that situation was levied on by the sheriff. It is very clear that the assignees had no right to cause any of the goods to be appraised for the benefit of the assignor, but if they did it and gave them to him for his own use, permitted him to remove them as his own, they were subject to levy at the suit of his creditors, and the assignees would have to account for them under the assignment. — ■ They had given them to the assignor to convert to his own use, and they have no right to complain that they were levied on by the sheriff. If you are satisfied that the assignor fraudulently concealed the goods from the assignees, that they did not know that lie bad kept back tbe articles levied, on, that tbey did not know wbat was taken or retained by bim, that would present quite a different question. Tbe property would vest by tbe assignment, and tbey could, take it whenever they could find it, or sue those who wrongfully withheld it, and of that you must judge. But if tbey carelessly, negligently or intentionally gave over to tbe assignor six or seven, times as much property as be bad any right to retain, even under their mistaken construction of tbe law, and then ..connived at or assisted bim to get them out of tbe, reach of bis general creditors, not intending to account for them thems.elves as assignees, they have but little cause’ to complain of the more vigilant creditor who finds out tbe articles and seizes them by bis execution. You are tbe sole judges of tbe fact, and whether there was fraud or not; and if you are of opinion the,whole assignment, was a contrivance to defraud creditors and give tbe assignor tbe benefit of tbe goods, your verdict will be for tbe defendant; but this you should not' decide upon slight evidence, and there is certainly but little here. If tbe plaintiffs voluntarily gave over tbe goods to J. H. Klapp as bis own, even under a mistake in law as to bis rights, tbey cannot complain of them seizure; and if their object in giving them was to benefit him'at tbe expense of. his creditors, tbey were lawfully seized and sold, and your verdict would be for the defendant. If tbe assignor practised a fraud on tbe assignees, took away goods tbey never intended bim to take, concealed them from bis assignees without any connivance on their part, your verdict must be for tbe plaintiff. Tbe whole question is left with you with the'instructions before,given.” ‘ To this charge tbe plaintiffs excepted. Tbe jury found for defendant. Tbe errors assigned» will appear from, tbe arguments of counsel and tbe opinion of tbe Supreme Court.