Wood v. Bolard

The Chancellor.

I am inclined to think the second assignment and the bond and warrant were fraudulent and void as against the complainants and other creditors of Bolard who did not assent to the same ; independent of the fact that they were made pending the proceedings under the statute, and in fraud of those proceedings. It is not necessary, however, to go into the examination of that point; as I think the objection, that the last assignment and the bond and warrant were a fraud upon the rights which the complainants had acquired, under the non-imprisonment act, to prevent their debtor from giving preferences, was well taken. If a proceeding of the kind which was attempted here could be sustained the statute would be a perfect dead letter ; as the whole benefit which it gives to the creditor who proceeds for a fraud already committed, is to prevent the removal of the debtor’s property out of the jurisdiction of the court to defraud his creditors, or the disposal of it for that purpose ; and to prevent him from assigning it with a view to give a preference. (Laws of 1831, p. 398, § 10, sub. 5.) And if it is once established that the debtor, after he has been arrested on the warrant, may make a valid assignment of his property to the exclusion of the creditor who has prosecuted him for his previous frauds, and can then be discharged upon giving a bond that he will not assign that which has already gone from him, for the purpose of giving such preference, no man of sense would ever think of proceeding against his debtor under the provisions of this statute. In the case of Hurst, (7 Wend. Rep. 239,) where the insolvent, on the same day that he presented his petition to be discharged under the insolvent act, confessed a judgment to his mother in trust for all of his creditors, the supreme court decided it was a fraud upon the law to attempt to appoint his own trustee in this way, instead of leaving it to the officer granting the discharge to appoint a trustee who should he under his control and direction.

The proceedings under this part of the statute of 1831 are remedial, and must be construed liberally for the purpose of carrying into effect the spirit and intent of the act oí the legislature. And no court which has a proper regard for the due administration of justice can ever sanction such a fraud upon the laws of the state as was attempted by the defendants in this case.

The decree of the vice chancellor declaring the judgment and the last assignment, as well as the previous assignment, fraudulent and void as against the complainants, was therefore right, and was in accordance both with the law and the justice of the case. The decree appealed from must be affirmed with costs j and with interest on the amount decreed to be paid by the court below, from the date of that decree, by way of damages to the complainants for the delay and vexation caused by this appeal.