Muhr v. Pinover

Robinson, J., delivered'the opinion of the Court. The debtor in this case, being in failing circumstances, made an assignment of all his property, except so much thereof as is exempt by law from execution, for the benefit of his creditors. And the question is whether the reservation of property exempt from execution, makes the assignment fraudulent and void as to creditorsf If it does, it must be because such a reservation operates in some way “to hinder, delay or defraud” the creditors of their just demands against the debtor. An assignor has no right, of course, to reserve any part of his property for the benefit of himself or his family, which, by any process at law or in equity, could be made liable for the payment of his debts.

But when the law itself exempts certain property of the debtor from execution, property in regard to ⁴⁸⁷ which the creditors can have no interest or concern, and which cannot be made subject to the payment of their demands, we do not see on what grounds the reservation of such property can he said to he in fraud of creditors. It certainly does not operate in any manner to delay, hinder or defraud them of their rights, because it does notin any way interfere with their remedies, nor does it take from them any property of the assignor, which could be sold for the payment of their claims. This seems too plain for argument. To make such an assignment void there must he a reservation of property which could be made subject to the payment of the debts of the assignor.

And with the exception of Sugg vs. Tillman, 2 Swan , 208, and which was subsequently qualified by Farquharson vs. McDonald, 2 Heisk., 404 , the decisions in this country are uniform in regard to the question. Heckman vs. Messinger, 49 Penn., 465 ; Mulford vs. Shirk, 26 Penn., 473 ; Dow vs. Platner, 16 N. Y., 562 ; Smith vs. Mitchell, 12 Mich., 180 ; Brooks vs. Nichols, et al., 17 Mich., 38 ; Simpson vs. Roberts, 35 Ga., 180 ; Canal Bank vs. Cox, 6 Me., 395. But then it is said the Act of 1861 exempts the property of the debtor only from sale under execution, and makes no provision for the exemption of property under an assignment for the benefit of creditors. This may be so, but the Act of 1861 was passed in pursuance of the State Constitution, which provides that “Laws shall he passed by the General Assembly to protect from execution a reasonable amount of the property of the debtor, not exceeding in value, the sum of five hundred’dollars.” The object of the law was to prevent a debtor from being stripped of all his property, and it ought to be liberally construed.

As his property could he taken and sold only by way of execution, it provided in terms for the exemption in such cases. By the terms of the Act, the debtor may select property to the value of one hundred dollars to he ascertained by