De Forest v. Bacon

Swtft, Ch. .T.

A debtor in failing circumstances may prefer creditors, and may, when necessary and proper, convey his estate to trustees, to he distributed among certain creditors, if done bona fule. In this case, the conveyance is made of specified property to trustees, for the benefit of certain enumerated creditors, who are presumed to have assented, as no dissent was ever expressed. Such a conveyance is warranted by the principles adopted in the case of Hempstead *638v. Starr, 3 Day, 340. which has always been recognized to be law.

It is, however, objected, that by the deed of trust, the trustees are vested with a power to continue a manufactory, till certain raw materials are worked up; and to purchase any necessary articles for that purpose : that this is a power which no debtor has a right to exercise on the eve of bank ruptcy, and renders the conveyance void. It is, however, evident, that cases may occur, where this would be perfectly proper; otherwise, property might be sacrificed in the distribution among creditors : for the raw material might be of little value till manufactured, and in a situation not to be removed.

Such a provision in a conveyance, then, cannot make it fraudulent per sc: it can only be evidence of fraud, proper to be left to the jury. As this question was fairly submitted to the jury, who have negated the fraud, there is no ground of complaint.

The shop-book of Judson would have been proper evidence between the plaintiff and Judson, to prove the state of their accounts ; and, of course, was proper evidence in this action, to shew the indebtedness of Judson to the plaintiff.

The other Judges were of the same opinion, except Smith and Chapman, Js. who gave no opinion, the former being related to one of the eestuy que trusts, and the latter having been of counsel in the cause. Peters, J. founded his opinion solely on the authority of Hempstead v. Starr.

New trial not to be granted.