anything else, because the assignment cannot operate on anything else.

Now an assignment of partnership effects is a partial one wherever the debtor has separate property. The terms of the present, embrace "all manner of machinery, stock, goods, chattels, debts, accounts, claims, and all other things whatsoever of the said William P. Jenks and Company, as well real as personal, and of what nature, kind, or quality soever," which evidently has respect but to the joint effects. And this assignment of the partnership effects is on condition that the creditor execute by a day certain, "a full and sufficient release of and from his claim, to the said William P. Jenks and William Maris, individually, and as copartners." Such a release would unquestionably exonerate their separate estates; and the validity of the assignment therefore depends on a single question of fact. It amply appears in the proofs reported by the commissioner, that both parties had separate property-the one to the value of several hundred dollars, and the other to the value of several thousand. The assignment was therefore fraudulent and void; and the proceeds of the property awarded to the execution creditors.

Decree in each case affirmed.

#63]

*GROVER v. WAKEMAN.

[In further illustration of the principles applicable to voluntary assignments for the benefit of creditors, the following extract is given from the opinion delivered by Mr. Justice Sutherland in the case of Grover v. Wakeman, in the Court of Errors of New York, in 1833, 11 Wendell, p. 200 to 203. The views expressed by Mr. Sutherland, in these remarks, have been extensively adopted.]

THERE being, then, such a conflict among the authorities, and so much doubt on which side the preponderance lies, it seems to be not only proper but necessary to consider the question with reference to the general principles involved in it. Every conveyance of property to trustees is, to a certain extent, a hindering and delaying of creditors. It interrupts and presents obstacles to their legal remedies; and every such assignment is absolutely void, if it does not appoint and declare the use for which the

property is to be held and to which it is to be applied. A provision that the uses shall be subsequently declared by the assignor will not do; they must accompany the instrument and appear on its face, in order to rebut the conclusive presumption of a fraudulent intent, which would otherwise arise. But where the assignor parts with all control over the property, and devotes it absolutely to the benefit of his creditors, without any reservation or stipulations for his own advantage, the honesty of his intention is so apparent, and the advantage to the creditors so direct and decisive, that they cannot be said to be obstructed or delayed in their remedies. But where, instead of directly distributing his property among his creditors as far as it will go, he places it beyond their reach by an assignment, not merely for the purpose of saving it from one particular creditor, to be given to another, or to be equally divided among all, but for the purpose of enabling him to extort from some or all of them, an absolute discharge of their debts as the condition of receiving a partial payment, he perverts the power to a purpose which it was never intended to cover, and which the principle on which the right to give preference is founded, will not justify. Why should a debtor be permitted in this way to operate upon the fears of his creditors and coerce them into his own terms? It has sometimes been said, in answer to this view of the case, that there is nothing immoral or unjust in a debtor in embarrassed circumstances and who is unable to pay all his debts, making the best arrangement in his power with his creditors, and giving the largest dividend or the whole, to those who will settle with him on the best terms; and if he can do this while he retains his property in his own. [*64 hands, there is no reason, it is said, why he should not be permitted to do it under cover of an assignment. Parties not under legal disabilities, may make such contracts as they please; and if they are supported by a consideration, and there is no fraud in the case, they will not be disturbed. If a debtor, therefore, with his property in his own hands and open to the legal pursuit of his creditors, can satisfy them that it is for their interest or the interest of any of them to accept 2s. 6d. in the pound, and give him. an absolute discharge, there is no legal objection to it; they treat upon equal terms; the ordinary legal remedies of the creditor are not obstructed. But the case is materially changed when the debtor first places his property beyond the reach of his creditors, and then proposes to them terms of accommodation. He obstructs

their legal remedies, hinders and delays them in the prosecution of their suits, by putting his property into the hands of trustees, with the view of getting an absolute discharge from his debts, and exempting his future acquisitions from all liability. It has been decided in this court, that the reservation of the least pecuniary provision for the assignor or his family, renders an assignment of this description fraudulent and void. How much more valuable is a discharge from his debts or a portion of them to an insolvent debtor, than a temporary pecuniary pittance. Judge Van Ness, in Hyslop v. Clark, states what I consider to be the sound principles upon this subject. He says an insolvent debtor has no right to place his property in such a situation as to prevent his creditors from taking it, under the process of a court of law, and to drive them into a court of equity, where they must encounter expenses and delay, unless it be under very special circumstances, and for the purpose of honestly giving a preference to some of his creditors, or to cause a just distribution of his estate to be made among them all. Judge Spencer, in Austin v. Bell, and Chancellor Kent, in Seaving v. Brinckerhoff, obviously concurred in the soundness of that position. Judge Story expressed his approbation of it in Halsey v. Whitney. The Supreme Court of Errors in Connecticut adopted it in Ingraham v. Wheeler, and it was most happily and impressively amplified and illustrated by the learned judge of the United States District Court for the State of Maine, in the case to which I have referred.

It is time that some plain, simple, but comprehensive principle should be adopted and settled upon this subject. In the absence

of a bankrupt law, the right of giving preferences must probably be sustained. Let the embarrassed debtor therefore assign his property for the benefit of whom he pleases; but let the assignment be absolute and unconditional; let it contain no *65] reservations or conditions for the benefit of the assignor; let it not extort from the fears and apprehensions of the creditors, or any of them, an absolute discharge of their debts as the consideration for a partial dividend; let it not convert the debtor into a dispenser of alms to his own creditor; and above all, let it not put up his favor and bounty at auction under the cover of a trust to be bestowed upon the highest bidder. After the maturest reflection upon this subject, I have come to the conclusion that the interests, both of debtor and creditor, as well as the general purposes of justice, would be promoted, if the question is still an

open one, by confining these assignments to the simple and direct appropriation of the property of the debtor to the payment of his debts. The remnants of many of these insolvent estates are now wasted in litigation growing out of the complex or suspicious character of the provisions of these assignments. One device. after another to cover up the property for the benefit of the assignor, or to secure to him, either directly or indirectly, some unconscientious advantage, has from time to time been brought before our courts and received condemnation. But new shifts and devices are still resorted to, and will continue to be so, until some principle is adopted upon the subject, so plain and simple that honest debtors cannot mistake it, and fraudulent ones will be deterred from its violation by the certainty of detection and defeat. The principle to which I have adverted, it appears to me, if adopted, will, to a very considerable extent, accomplish that object.

In the absence of any statutory prohibition, and of a bankrupt law, a debtor may, at, any time before liens have attached upon his property, make a general or partial assignment to a trustee for the benefit of his creditors, with preferences, which assignment will be valid as against the process of creditors, from the time of the execution of the deed.(1) And a bank, or other corporation, in a state of insolvency, possesses the same rights that an individual possesses, to make an assignment with preferences;(2) but though settled by a *conclusive weight of authority, the soundness of the principle, in regard to preferences,

[*66

(1) Brashear v. West and others, 7 Peters, 609, 614; Lippincott Barker, 2 Binney, 174, 186; Wilkes & Fontaine v. Ferris, 5 Johnson, 335; and see Wilson v. Forsyth, 24 Barbour's S. C., 121 ; De Forrest v. Bacon, 2 Connecticut, 633, 637 ; Kettlewell v. Stewart, 8 Gill, 473; McCullough et al. v. Sommerville, 8 Leigh, 416, 426; Phippen v. Durham, 8 Grattan, 464; Niolon v. Douglass and others, 2 Hill's Chancery, 443, 446; Smith, Wright & Co. v. C. C. Campbell & Co., Rice 353, 366; Moore v. Collins, 3 Devereux, 126, 134; Pearson & Anderson, &c., v. Rockhill & Co., 4 B. Monroe, 296, 297; Hindman v. Dill & Co., 11 Alabama, 689; Hall et al. v. Denison & Tr., 17 Vermont, 311, 317; Cross v. Bryant et al., 2 Scammon, 37, 43; Nightingale v. Harris, 6 Rhode Island, 328.

(2) Catlin v. Eagle Bank, 6 Connecticut, 233, 242; Savings Bank v. Bates, 8 Id. 506, 512; The State of Maryland v. The Bank of Maryland, 6 Gill & Johnson, 206, 219; Bank U. S. et al v. Huth, 4 B. Monroe, 423, 429; Arthur . The Commercial and Railroad Bank of Vicksburg, 9 Smedes & Marshall, 396, 429; Dana v. The Bank of the United States, 5 Watts & Sergeant, 224, 243; De Ruyter v. St. Peter's Church, 3 Comstock, 238, 242; S. C. 3 Barbour's Chancery, 119; London v. Parsley, 7 Jones' Law, N. C. 319; Hopkins et als. v. The Gallatin Turnpike Co., 4 Humphreys, 403, 410; Conway et al. v. Ex parte, 4 Pike, 305, 353; approved in Ringo . R. E. Bank, 8 Eng. 575; (13 Ark.) Town v. Bank of River Raisin, 2 Douglass, 530, 553; and see opinions of Mr. Kent, Id. app. xii., and in 6 Humphreys, 532.

as applied to corporations, is doubted upon weighty reasons, in Robins et al. v. Embry et al., 1 Smedes & Marshall's Chancery, 208, 259, 265 : and a general assignment by a bank, though admitted to be valid, was decided in The State v. The Real Estate Bank, 5 Pike, 596, 607, to be a good cause of forfeiture of its charter.

An assignment bona fide, for the security of a future or contingent liability, as that of a surety or endorser, is also within the protection of the law;(1) but as to indemnifying special bail, see Whallon v. Scott, 10 Watts, 237, 244.

Where a conveyance is made directly to creditors in consideration of indebtedness, their assent (actual, or to be presumed) to the conveyance is necessary;(2) but where the conveyance is to a trustee for their benefit, their assent, where there is nothing fraudulent in the deed, is not necessary.(3) The cases in Massachusetts, which required the assent of a creditor to render an assignment valid as against him,(4) were grounded upon the difficulty formerly felt respecting the power of the courts in that State, to compel the trustee to execute the trust;(5) but since the act of 1836, c. 238, which gives the creditors a remedy agaist the trustee, the assent of creditors is no longer necessary in Massachusetts.(6)

By an acceptance of an assignment for the benefit of creditors, the assignee becomes a trustee for the creditors, and chancery will compel the execution of the trust for their benefit.(7) When a creditor goes

(1) Stevens et al. v. Bell, 6 Massachusetts, 339; Halsey et al. v. Whitney et al., 4 Mason, 207, 231; Canal Bank v. Cox and Tr., 6 Greenleaf, 395, 399; Hendricks v. Robinson, 2 Johnson's Chancery, 284, 306, 308; Miller v. Howry, 3 Penrose & Watts, 374, 381; Vernon, &c., v. Morton & Smith, &c., 8 Dana, 247, 253, 266; Duvall and others v. Raisin and others, 7 Missouri, 449, 450; McWhorter v. Wright, Nichols & Co., 5 Georgia, 555 ; see Allen et al. v. Montgomery R. R. Co. et al., 11 Alabama, 438, 452.

(2) See Tompkins v. Wheeler, 16 Peters, 106, 119.

(3) Nicoll v. Mumford, 4 Johnson's Chancery, 523, 529; Cunningham v. Freeborn, 11 Wendell, 241, 249; Halsey et al. v. Whitney et al., 4 Mason, 207, 214; Houston ". Nowland, 7 Gill and Johnson, 480, 492; Bank U. S., et al. v. Huth, 4 B. Monroe, 423, 437; Smith v. Leavitts, 10 Alabama, 93, 104; Kinnard v. Thompson, 12 Id. 487, 491; The Governor, use, &c. v. Campbell et als., 17 Id. 566, 569; Rankin, Duryee & Co. v. Lodor, 21 Id. 392; See Klapp's Assignees v. Skirk, 1 Harris, 589, 592; and see Harland v. Binks, 15 Adolph & Ellis, N. S. (69 E. C. L. 721) note.

(4) Russell v. Woodward, 10 Pickering, 408.

(5) Stevens et al. v. Bell, 6 Massachusetts, 339, 342; Widgery et al. v. Haskell, 5 Id. 144, 154.

(6) Shattuck v. Freeman, 1 Metcalf, 10.

(7) Moses v. Murgatroyd, 1 Johnson's Chancery, 119, 129; Shepherd v. McEvers, 4 Id. 136; Nicoll. Mumford, Id. 523, 529; Ward et al. v. Lewis et al., 4 Pickering, 518, 523; New England Bank v. Lewis et al., 8 Id. 113, 118; Pingree v. Comstock, 18 Id. 46, 50; Weir and another v. Tannehill and others, 2 Yerger, 57; Robertson et al. v. Sublett et al., 6 Humphreys, 313; Pearson & Anderson, &c., v. Rockhill & Co., 4 B. Monroe, 296, 303; see Hulse, Montellius & Fuller v. S. Wright, Wright, 61, 64.