Mills v. Levy

2 Edw. Ch. 183

Opinion

The Vice-Chancellor:

The provisions of the assignment made by the defendants Levy and Henriques are, simply, these: After providing for the law and other necessary expenses, the trustees are directed to pay certain creditors in full or pro rata, as far as the avails will extend; then, so far as the assigned property would go, to pay all other creditors equally who should, within six months, agree to discharge the assignors from all claims and demands; and, Out of what should remain, to pay rateably the creditors who might not, within the six calendar months, agree to give such release and discharge; and, lastly, if such creditors should agree to give such release and discharge within the period aforesaid, then the trustees were to apply the proceedswhich might remain, after executing the trusts first expressed (that is to say, the payment of the preferred debts) to the satisfaction, so far as they would extend, 6f all the creditors rateably. There is no ultimate disposition of a residue.

The case of Lentilhon v. Moffat has been referred to upon the argument: but it will be found that I did not there ex press any decided opinion upon the effect of trusts like those embraced by the present assignment. The complainants place some reliance upon Wakeman v. Grover and Gunn. The assignment in that case contained trusts more objectionable than those now before the court. The counsel upon the present motion refer, however, to the decision in the court of Errors against the assignment in the case just mentioned upon the ground of its giving a preference upon the condition of the creditors granting an absolute discharge; but, I have not been furnished with a copy of the opinions in that court,

Footnotes

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(a)

Still I am relieved from all embarrassment by the decision of the chancellor in the later case of Burrall, Jr. v. Leslie, which has been decided since the case of Wakeman v. Grover and Gunn was passed upon in the court of Errors. He decreed against the assignment which the defendants John Leslie and Ross Leslie had made to the other defendants Williams and .McDougald. And upon comparing the trusts of it with those which appear in the case now before me, I can perceive no difference between them. The trusts there were in the following words: “ In trust for the sole and only uses and purposes following and on the conditions following, that is to say, that the said assignees shall take the immediate and full possession thereof; and shall dispose of the same; and collect the same in such manner and times as to them shall seem most advisable for the benefit of our said creditors. And, that the said assignees shall forward, by mail or otherwise, to each and all of the aforesaid creditors, as soon as may be, a notice of this assignment and objects ; and shall, after deducting all reasonable expences and charges from the avails of this assignment, divide the balance or so much thereof as shall be necessary among those of the aforesaid creditors who shall, on or before the fifteenth day of December next, agree to receive such dividend, in full discharge and satisfaction of their respective debts. And if there should not be sufficient avails to fully pay the said last mentioned debts, then the said assignees shall divide the Same among the aforesaid creditors who shall agree as aforeSaid to take a dividend and discharge as aforesaid, in proportion to the respective amounts of their said debts. And should there be more avails, after deducting expences and charges as aforesaid, than to fully pay off all the debts of those creditors who shall come in for dividend and discharge their debts as aforesaid, then and in that case the" said trustees, should there be enough, shall pay up all the debts to such creditors as do not come in for a dividend as aforesaid. And if there should not be enough for that purpose, shall then pay and divide the same among the said last mentioned creditors, in proportion to their respective debts. And if, after the payment of all expences and charges as aforesaid and all the debts of our creditors, there should yet be left a balance of avails from this assignment, that balance the said trustees shall pay over to us or our legal assigns.”(b)

The chancellor must certainly have considered, in this case of Burrall, Jr. v. Leslie, that the court of Errors, in Wakeman v. Grosvenor and Gunn, had passed upon the principle involved in this mode of creating preferences and I also must decide against the validity of the present assignment. Let a reference be had to Master Codwise, for him to select a suitable person as receiver of the assigned estate and effects, with power to take the requisite security.

At this time the report of the case (11. Wend. 187.) had not been published.

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The chancellor gave no written opinion in the case of Burrall Jr. v. Leslie, but the following is a copy of the order directed to be entered :

“ On looking into the bill of complaint in this canse and the answer of all the defendants, by which it appears that the complainants are creditors of the said John Leslie and Ross Leslie, and, before filing their bill in this cause, had obtained judgments and executions against the property of the said John Leslie and Ross Leslie; and that the said John Leslie and Ross Leslie had then avowed themselves insolvent and had assigned and deliver, ed all their property and effects to the said other defendants Matthew Williams and Peter McDougald, in whose hands the said property and effects were at the time of the said executions of the complainants were delivered to the sheriff; and it further appearing to the court that, on filing the said bill of complaint, an injunction was issued and served, restraining the said defendants from disposing of any of the said property and effects or the avails thereof; and now, on motion, on behalf of the defendants, that the said injunction be dissolved; and on motion, on behalf of the complainants, that a receiver be appointed, with the usual powers ; and after hearing Mr. Bushnell of counsel for the complainants and Mr. Stevens of counsel for the defendants; it appearing satisfactorily to the chancellor that the said John Leslie and Ross Leslie are insolvent and unable to pay their debts, and that the said assignment of their property and effects to the said other defendants Matthew Williams and Peter McDougald is fraudulent and void, it is thereupon ordered, that the said injunction be continued; and that a receiver be appointed, agreeably to the prayer of the said bill of complaint; and that it be referred to a master residing in the county of Onondaga to appoint a receiver, with the usual powers, and to take from him the requisite security. Afid that due notice be given to the parties in this suit, and to Timothy R. Green Esquire, solicitor for Samuel Matthews and John A. Ostrander, who are complainants in a creditor’s bill in this court against said John Leslie and Ross Leslie, of the time and place when and where the said master will receive nominations and make the appointment of such receiver and determine upon and take such security. And it is further ordered, that the said defendants and each of them forthwith, after the appointment of such receiver, do and they are hereby directed to assign, transfer and deliver over to the receiver, on oath, under the direction of the master, all the said property and effects, heretofore assigned by the said John Leslie and Ross Leslie to the said Matthew Williams and Peter McDougald; and that they, the said defendants, appear before the master from time to time and produce such books and papers and submit to such examination as the master shall direct in relation to any matter which they might have been legally required to disclose by particular specification in this order. And that the master report to this court With all convenient speed.