Polkinghorne & Lawrence v. Martinez
Polkinghorne & Lawrence v. Martinez
Opinion of the Court
delivered the opinion of the Court.
The deed of assignment is fraudulent and void as against creditors who have not assented thereto. These infirmities result from the terms of the instrument, and they cannot be cured
It is not lawful for a debtor, in making an assignment for the payment of his debts, to stipulate that he shall possess the power of directing afterwards how the property conveyed shall be used or applied for that purpose. His power to dictate or control the future management and disposition of the estate and its proceeds, and the relative rights of creditors in reference to it, terminates with the execution of the'assignment. The assignment itself must definitely fix and settle the respective rights of creditors. If, instead of this, it reserves to the assignor the power of doing so subsequently, it is fraudulent and void; and as the assignor could not retain such power in himself, he could not invest his assignee with it. The same objection,in principle, exists in both cases. Hyslop v. Clarke, 14 Johns., 458; Averill v. Loucks, 6 Barb., 470 ; Gazzam v. Poyntz, 4 Ala., 374 ; Sheldon v. Dodge, 4 Den., 217; Grover v. Wakeman, 11 Wend., 187; Boardman v. Halliday, 10 Paige, 223; Barnum v. Hempstead, 7 Id., 568 ; Burrill on Assignments, Sec. 119 ; Bump, on Fraudulent Conveyances, 315.
Affirmed.
Reference
- Full Case Name
- Polkinghorne & Lawrence v. F. P. Martinez
- Status
- Published
- Syllabus
- Assignment. Discretion granted assignee. Effect thereof. Case in judgment. . An assignment for the benefit of creditors which provides that the assignee, after paying certain creditors therein named and preferred, “shall pay any, other debts of said firm as fast as money sufficient shall come into his hands to pay the same, at his discretion,” is fraudulent and void as-against unpreferred creditors of the assignor not assenting thereto, because of the attempt to confer upon the assignee a discretion as to the payment of such creditors, which the assignor could not legally retain to himself or transfer to the assignee.