after making a statement of the facts, delivered the opinion of the court.
The only question argued or to be determined on this appeal is whether the assignment from Thompson to Coshow is void as to the plaintiffs in this suit. They admit that the mortgage to the Bank of Brownsville, the conveyances to Mrs. Thompson and Mrs. Hida, the transfer of the promissory notes to Hausman, Powell, and Grover as collateral security, are, as to them, valid, and such preferences as Thompson could lawfully make; but their contention is that such transfers, and especially that of the promissory notes to Hausman, Powell, and Grover, were made at a time and under such circumstances as to become in law a part of the subsequently executed assignment, and to render it void under the assignment law. By section 3173 of the statute (Hill’s Annotated Laws) it is declared that “no general assignment of property by an insolvent, or in contemplation of insolvency, for the benefit of creditors shall be valid unless it be made for the benefit of all his creditors in proportion to the amount of their respective claims.” But this provision relates only to general assignments, and does not prohibit an insolvent debtor from in good faith preferring one creditor to another, unless the preference be contained either in the deed of assignment itself, or is so closely con*39nected therewith as to form in law a part thereof : Inman v. Sprague, 30 Or. 321 (47 Pac. 826); Sabin v. Wilkins, 31 Or. 450 (48 Pac. 425). If, however, the attempted preference is made by an insolvent in contemplation of a general assignment, and as part of a scheme having for its object the distribution of all his property among his creditors, it will be deemed a part of the subsequently executed assignment, and will render it void, it matters not in what form the preference may have been made or the transaction clothed: O’Connell v. Hansen, 29 Or. 173 (44 Pac. 387). The authorities upon this question are clear, and will be found fully collated in 3 American and English Encyclopedia of Law (2nd Ed) 76, and in South Branch Lumber Company v. Ott, 142 U. S. 622 (12 Sup. Ct. 318). Indeed, there is no controversy between counsel as to the law of the case, and the only question is whether the facts, as disclosed by the evidence, bring it within the principle stated.
For the plaintiffs the claim, is made that Thompson had practically determined to make a general assignment at the time he returned to Brownsville from Albany, on the evening of the twenty-ninth of April, and that the transfer of the notes to Hausman, Powell, and Grover immediately after his arrival, was a scheme to give them a preference over his other creditors; while the contention for the defendants is that Thompson had not' decided at that time to make a general assignment. It seems to us that upon this point the weight of the testimony is clearly with the plain*40tiffs. Mr. Hausman, one of the secured creditors, and his wife, 'both testify that, on the evening of the twenty-ninth of April, Thompson, who had just returned from Albany, called at their house, and said that he was going to make an assignment; that George Coshow was to be his assignee; that he was going into the store himself, and help invoice the goods, and could make more out of it that way than if a man from Portland was put in charge by the creditors; and that he then turned notes over to Hausman, amounting to about $300 in value, which he said would be sufficient security for one half of his claim, and that he thought the property to be assigned would pay fifty cents on the dollar, and that would pay the claim in full, but, if not, that he would make it good, as he intended to pay his home creditors. Mr. McFerron, the sheriff, testifies that he had a conversation with Thompson in Albany on Monday afternoon, about his books of account, and told him that the attorney for the shoe company was anxious to get possession of them, and that Thompson said, if he made an assignment, he would need them. Mr. A. A. Tussing, an attorney residing at Brownsville, says that on Monday, the twenty-ninth, Thompson told him that he was going to Albany, and that he expected to make an assignment; that he did not believe in allowing some of his creditors to get all his property. In the evening of the same day, after his return from Albany, he was in the office of witness, and told him that he had been to Albany, had secured Hausman and Grover, and would *41secure Powell; that Mr. Wyatt had come up with him, and he (Wyatt) was then at Coshow’s; that George Coshow would act as assignee, and that he had chosen him because he was a young man, and the president of the Brownsville Bank had advised him to do so, and, as the bank was one of his largest creditors, he felt that he ought to show •some regard for his wishes. Witness further testifies that at that time a dispute arose between Thompson and the cashier of the bank as to whether it could present its claim to the assignee for the full amount on account of the securities held by the bank, and that he, in order to settle ■such dispute, took down from his library, and read, the decision of this court upon that question; that, before Thompson left the office, he took him to one side, and said to him: “ Tussing, the reason that my books were not in the safe the other night was because I had to have my ledger to make an assignment. That book will be in the safe in the morning.” Mr. Say, the cashier of the bank, and F. M. Powell, one of the parties whom Thompson preferred, were present in Tussing’s office at the time of the conversation referred to, and corroborate him as to what occurred at the time, and as to the statements made by Thompson. Mr. Greene testifies that he had a conversation with Thompson about the fourteenth of May, 1895, and that Thompson told him at the time he considered himself obligated or under obligations to Hunter, Powell, and Hausman, because they had become indorsers on notes that he had executed for borrowed money, *42and that he intended to and had protected them by giving them notes as security for their liability as his indorsers, and he named the amount of such notes at the time, of which the witness made a memorandum; that he said he turned these notes over after the attachments of the Standard Shoe Company and Sabin, and that at the time he had made up his mind to make an assignment; that, after the suits were commenced, he went to Albany, for the purpose of consulting Mr. Weatherford, and there ascertained that other suits had been commenced, or were about to be commenced, and then saw the matter was hopeless, and that he would have to make an assignment to fix his friends.
This evidence clearly shows that Thompson made the preferences complained of in view of a contemplated general assignment, and as a part of the same scheme, and this testimony is practically undisputed by Thompson. It is true he says that he hoped to be able to compromise with his creditors, although there is no evidence that he made any effort to do so, and did not fully determine to make the assignment until late Monday evening or Tuesday morning; but he admits that, when he went to Albany to consult his attorneys, he took his ledger along “ for use in case it was determined to make an assignment; ” that while the matter of the assignment was under consideration, and before any conclusion had been reached, he secured some of his home creditors, and very soon thereafter determined to make the assignment. It may be true that the assignment was not decided *43upon at the time these preferences were made, in the sense that the assent of Coshow to act as assignee had been obtained, or that the papers had been drawn and executed; but that it was in contemplation and practically determined upon can hardly admit of serious doubt under all the circumstances of this case, as disclosed by the testimony ; at least, that is our conclusion, after a careful examination of the evidence. It follows, therefore, that the decree of the court below must be modified to the extent of setting aside the assignment from Thompson to Coshow, so far as the rights of these plaintiffs are concerned under their attachments.
Modified.