In re Kimball

14 F. Cas. 480, 1878 U.S. Dist. LEXIS 197

Opinion

NIXON, District Judge

(after reviewing the facts). The only question involved is, when the deed of assignment took effect. If on the 16th of July, when its delivery and the surrender of possession of the estate to the assignee were made, there was no property in the debtor, on the entry of the judgment on the 20th of July, upon which the execution could operate, and the Ballew Brothers. although execution creditors, were without a lien upon the estate which had already been transferred. But the counsel for the petitioner claims that, under the 3d and 4th sections of the state assignment act, no change of property takes place, until the as-signee has completed his inventory, exhibited the same to the surrogate of the county, and entered into bond to the ordinary, with sufficient surety, in double the amount of the valuation, for the faithful performance of his trust, which services were not performed in this case until August 11, 1877, after the entry of the second judgment in favor of the petitioners. * * * The aim of the statute is to create a trust, and the execution of the deed and the transfer of the property constitutes the assignee a trustee in possession, holding for the equal benefit of all creditors. The provisions of the third and fourth sections, as to the subsequent duties of the as-signee, are merely directory, prescribing for the security of the rights of creditors the prompt performance of certain acts, which the courts will enforce, if the assignee be derelict; but it has never been held, so far as 1 know, that .their performance was a condition precedent to the operation of the assignment. It may be true the assignees should not proceed to sell the estate, nor perform any of the duties necessary to carry into effect the intention of the assignment, until he has filed with the surrogate, under oath or affirmation, a true inventory and .valuation of the property assigned, and has entered into bond as required for the faithful execution of the trust; but in the meantime the estate has passed out of the control of the debtor, and lias vested in the assignee, and is beyond the reach of the lien of any judgment and execution subsequently entered and issued. See Scull v. Reeves. 2 Green. Ch. [3 N. J. Eq.] 84; Alpaugh v. Roberson, 12 C. E. Green [27 N. J. Eq.] 96. I must, therefore, hold that the petitioners acquired no lien upon the debtor’s property by virtue of their judgments and execution, and that the bankrupt and his other creditors are entitled to the protection of the court until the time for carrying out the composition arrangement has fully expired. Application refused.