King, Boyd & King v. Johnson

5 Del. 31

• Court: Superior Court of Delaware
• Decided: July 1, 1848
• Status: Published

Opinion

By the Court:

Harrington, Judge.

The position assumed by the courts of this State, in reference to assignments deemed fraudulent by our laws, though valid in the State where they were made, is this ; we do not object to such assignments, unless the question is directly upon them, and we are called on to give them effect here, as transferring property within this jurisdiction. On questions between the assignees, -and other claimants of the property here, under unexceptionable liens or conveyances, we hold such assignments void. ' Thus we recognize discharges in the insolvent courts of Pennsylvania, though based upon assignments preferring creditors, when the question is merely whether the insolvent shall be held to bail or imprisoned here after such discharge; but we hold that the assignment itself is inoperative to transfer property here; because it is deemed fraudulent by our law. An assignment, therefore, in Pennsylvania, preferring creditors, will not transfer property here.

It was decided in Maberry & Pollard vs. Shissler, 1 Harr. Rep. 349, which was the first case on the point, that an assignment in Pennsylvania reserving an interest in the assignor to the prejudice of creditors, would not be sustained against a subsequent attachment of his effects here; and in Hutchinson vs. Gordon, (2 Harr. Rep. 181,) the court said a deed preferring creditors was void, wherever executed, as to its operation on property here. The same principle was held in Fisher vs. Stayton, [3 Ibid, 271,] though the court gave effect to an insolvent discharge founded on such an assignment.

The first question then is, whether the assignment of King, Boyd & King to Lippincott & Way, of the judgment against Johnson, which was made in contemplation of insolvency, and with a view to prefer the debt due to Lippincott & Way, is such an assignment as this court will give effect to, in preference to the subsequent attachment of the Johnson debt by Iddings, Wells & Trotter. Such an assignment would be illegal here. It is prohibited by our act against fraudulent insolvency, which provides “that if any person in contemplation of insolvency, shall make an assignment of his estate for the benefit of creditors, and shall by such assignment prefer any creditor to the others, or secure to him a greater proportion of his debt than the others, the assignment shall be deemed fraudulent and absolutely void; and the estate, &c., contained in any such assignment shall be liable to be seized for the debts of the assignor.” The proof brings this case within that act. The assignment of this judgment was made with a great number of other claims to a large amount, on the day that King, Boyd & King failed, and with the avowed purpose of preferring Lippincott & Way, whose debt they considered such as ought, in honor, to be favored. There may be nothing wrong in such a preference; circumstances might make it peculiarly proper as between the parties; but it is open to such abuse, and affords such a cover to fraud, that our law prohibits it altogether; deems all such preferences fraudulent; and makes them absolutely void.

We are called on to give force and effect to this assignment: to prefer it to a subsequent lawful attachment of the Johnson judgment. This we cannot do consistently with the policy of our law, and the provisions of the act of assembly.

Gilpin and Bayard, for Iddings, Wells & Trotter. Rogers and Whitely, for Lippincott & Way.

We think, therefore, that the attaching creditors Iddings, Wells and Trotter, are entitled to judgment on the answer of Peter Johnson, the garnishee.

Judgment accordingly.