Mann v. Wakefield

Opinion by Mr. Chief Justice Sterrett,

This case has all the elements which go to make a voluntary assignment under the act of 1843. There was a declaration (1) of trust; (2) made by debtors; (3) on account of present inability to pay their debts; (4) with intent to prefer certain creditors over others. It was immaterial, as was suggested by the court below, that no residuary interest was expressly reserved in favor of the assignors; for that was implied in the character of the transaction. The assignment does not purport to have been made in adjustment and satisfaction of the debt. Directness would have been a badge of good faith and prima facie valid; but the creation of a trust raised a suspicion of collusion which the statute turns to the benefit of all the creditors in proportion to their respective demands in accordance with the law relative to voluntary assignments. Disposition of the surplus, if any there be, has therefore nothing whatever to do with the application of the statute.

Nor is it material that the assignment involved the completion of certain contracts. That is an obligation which may result from a regular voluntary assignment; and this statute declares that “ such assignments ” as that under consideration shall be subject in all respects to the same laws. The creation of a trust implied the performance of the duties incidental to a lawful purpose. A creditor cannot, by the addition of this or that incident, defeat the benign purpose of the statute. The sole test of its application is the creation of a trust by an insolvent with intent to prefer. The completion of certain undertakings was not the consideration of the assignment. The assignors were unable to fulfil their obligations “ on account ” of “ needed funds,” and therefore forced to assign. The essential characteristics of this assignment necessarily brought it within the mischief which the statute was intended to correct.

The creditors preferred were not bona fide purchasers for value. They accepted the assignment with notice of its ille *401 gality written in its terms. They parted with no right to pursue any other remedies which they had as against their debtors; and they assumed no obligation save those — if even those — which would have been implied in a voluntary assignment made in the ordinary form. They were emphatically volunteers.

We find nothing in the record that would justify us in sustaining either of the specifications of error.

Decree affirmed and appeal dismissed at appellant’s costs.