Strauss v. Rose

Robinson, J., delivered the opinion of the Court. Eachel Groldschmitt being embarrassed and in failing-circumstances, on the 29th of April, 18⁷⁹, conveyed to the appellee her stock of goods and fixtures, in trust, to sell the same and apply the proceeds, first to the payment of' the expenses of the trust, then to the payment of certain preferred creditors, then to the payment of all other creditors without preference, and the balance, if any, to herself. On May 1st following, an attachment was issued upon the affidavit of the appellants’ creditors of the assignor, alleging that she had conveyed or was about to convey her property for the purpose of defrauding her creditors, (Act 1864, ch. 306,) and under this attachment the stock of goods and fixtures conveyed by Eachel Groldschmitt to the appellee were taken by the sheriff. At the trial below the Court rejected the. several prayers offered by the appellants, and instructed the jury if they should find that the deed of April 29th was regularly executed and recorded, their verdict must he for the claimant.

In other words, the deed being upon its face a. valid assignment, the appellants had offered no evidence from which a jury could reasonably find that it was fraudulent in fact. A debtor, it is admitted, may make an assignment of his property, and provide for the payment of one class of creditors in preference to another. Abstractly considered, it may he more equitable to provide for the payment of all alike, hut as the debtor may, by actual payment of money, prefer one creditor to another, for the same reason he may assign his property, so long as it remains unaffected by liens, in trust, to sell the same and apply the proceeds to the payment of certain debts in preference ⁵³¹ to others. All the law requires is that the conveyance shall he made in good faith and upon a valid consideration.

As regards the conveyance now before us, it is upon its face unquestionably a valid assignment in law. It contains no provision exacting releases of creditors, nor is there a provision or reservation of any kind expressly or impliedly enuring to the benefit of the assignor. On the contrary, it is upon its face an unconditional conveyance of property in trust for the payment of creditors. But though fair and valid on its face, it may, in fact it is said, to be a mere device or contrivance to defraud creditors.

This is true. It may be made for the purpose of concealing or covering up the .debtor’s property, or to force creditors to accept a compromise, or in pursuance of an agreement or understanding with the assignee or the preferred creditors, by which the assignor is to derive some advantage or benefit inconsistent with the legal rights and remedies of creditors. If so, it is as much within the condemnation of the statute as if the fraud had been written on its face. The burden of proof, however, in such cases is upon the creditor assailing the assignment, and he must offer evidence from which a jury may reasonably find that though valid on its face, it is fraudulent in fact.

This case then comes down to this, was there any. such evidence offered by the appellants ? We think not. There is no proof that the assignment in question was made for the purpose of concealing the property of the assignor, nor any proof of a secret trust or understanding with the trustee or any one else that she was to derive any benefit from its execution as against the rights of creditors. The trustee is not even a creditor, and the proof shows that he accepted the trust at the request of Mrs. G-oldschmitt, and after both Mr. Walter and Rohr had declined.

He gave bond as required by law, took possession of the