Lloyd v. Chromotype Co.

30 Ill. App. 350, 1888 Ill. App. LEXIS 296

• Court: Appellate Court of Illinois
• Decided: March 13, 1889
• Status: Published

Opinion

Garnett, P. J.

The Chromotype Company, on and prior to January 6, 1887, was indebted to George E. Lloyd, George F. Harding, and to Van Schaack & Sons. The claims of Lloyd and Harding, respectively, were secured by separate chattel mortgages, Van Schaack & Sons being without security. On that day the company, without consideration and for the purpose of defrauding its creditors, assigned to Lloyd certain open accounts, which he accepted with like purpose, and upon which he collected $101. By assignment, dated January 20, 1887, the company, in consideration of $1,000, assigned the same accounts to Harding, and on January 29, 1887, Lloyd assigned and delivered to Grant the chattel mortgage and notes which he held against the company. Van Schaack & Sons having obtained a judgment against the . company for $152.15, and execution thereon being returned unsatisfied, a garnishment against Lloyd was sued out. Harding and Grant interpleaded in the latter proceeding and judgment was rendered against them for costs. Their interpleader was dismissed and judgment was also rendered for $101.31, in favor of the company for the use of Van Schaack & Sons, against Lloyd. Harding and Grant alone appeal from the judgment.

1. The assignment to Lloyd, though in fraud of the assign- or’s creditors, was binding on it (Miller v. Marckle, 21 Ill. 152), at least so far as Lloyd succeeded by collections in uniting the legal to the equitable title. Beyond the amount of such collections we are not required by this record to decide. No rights could be conferred by the company on Harding to that sum, because it had no rights to convey. The claim of Harding, we understand', is founded on the assignment to him, and not by reason of his prior claim as a creditor of the company. If, however, he is proceeding as a creditor, lie has no footing to set aside a fraudulent conveyance until he exhausts his legal remedy.

2. Lloyd did not hold the accounts as additional security for his claim against the company. If they were held as additional security, all his rights thereto would have passed to Grant as an incident to the debt which Lloyd assigned to him. But the admitted facts deny that there was any consideration for the assignment of the accounts to Lloyd.

3. If it be true that Lloyd promised the company on the 26th of January, 1887, to apply the money realized on the accounts, as credits on the notes he held, such promise was without consideration. Grant did not purchase the notes and mortgage on the faith of the alleged promise and can not rely on it as an estoppel.

The judgment is affirmed.

Judgment affirmed.

Gaby, J., took no part in the decision of this case.