Perry Insurance & Trust Co. v. Foster , 58 Ala. 502 ( 1877 )

BRICKELL, 0. J.

The assignments of error present several questions, on which we do not deem it necessary to express an opinion, as they do not affect the conclusions we have reached, and it is not probable they will arise again under similar complications. If these are conceded to the appellee, his right to any relief depends on the one or the other of two propositions, neither of which, in our judgment, can be maintained. The first of these is, that the conveyance executed on the 19th of February, 1869, by J ames and Richard H. Lee, is fraudulent and void as against their creditors. The second is, that if the conveyance is not fraudulent, taken in connection with the cotemporaneous transfer to the preferred creditor, of judgments against the grantors, executions on which were a lien on all their estate, it is a general assignment, under the statute enuring to the equal benefit of all their creditors.

The conveyance is, doubtless, as decided by the chancellor, an assignment strictly and technically, as distinguished from a mortgage, or a deed of trust for. the security of creditors, in the nature, and with the incidents of a mortgage. The entire estate in the property designated, legal and equitable, is conveyed to the trustees, and all that remains to the grantors is a resulting trust.' — Burrill on Assignments (3d ed.), 11-16. It is also a fact, about which there is no controversy, that at the time of its execution, the debtors were actually insolvent, pressed by executions, under wbicb, if forced sales bad been made, their whole estate would have been sacrificed. Erom these they were anxious to obtain ease, and the opportunity to continue for the current year their planting operations, for which they had partially arranged. They were largely indebted to the Perry Insurance and Trust Company, and their brother, John H. Lee, was liable as accommodation endorser for this indebtedness. Sales of their property, under the executions, would have involved him in financial ruin, and the company probably in large loss. The company agreed to accept the bills of exchange of the debtors, having near twelve months to run, for a sum sufficient to cover the larger judgments, to pay the smaller judgments, taking a transfer of them, and reserving the right to issue execution for their collection, whenever they deemed it necessary,' and to advance a sum not exceeding $5,000 for the cultivation of crops on the lands assigned and other lands of the debtors; the debtors to cultivate the crops, to gather and prepare the same for market, and to deliver the same without delay to the trustees. The agreement is substantially embodied in the assignment. The crops, as well as the property in existence, by the terms of the assignment, are appropriated to the payment of the enumerated debts, which include the acceptances given fox the judgments, and the prior indebtedness. The trustees are authorized to take possession whenever they deem it necessary, or the company shall direct, and must take possession on the ensuing first of December, and sell so much of the property as is necessary for the payment of the expenses attending the execution of the trusts, the attorney’s fees for preparing the conveyance, and the secured debts. If a surplus of the proceeds of sale remain, it is payable to the debtors.

In view of the insolvency of the debtors, it is insisted the assignment is fraudulent — that it is not an absolute, unconditional appropriation of the property conveyed to the payment of the particular debts, and that it recovers to the. debtors substantial benefits, injurious to the creditors not secured. The questions thus presented, are not of the first impression in this court, but are controlled by adjudications which legislation alone can change. When inconvenience has resulted from these adjudications, the legislature has applied the corrective. If they were disturbed by the courts, touching so nearly as they do, the daily transaction of business ; sanctioned as they are by the profession, who, relying on them, advise conveyances; and by the practice of the community who make and accept such conveyances, not only would injustice to individuals follow, but titles to property would be rendered insecure, and distressing litigation provoked and fostered.

It is conclusively settled, that a debtor in failing circumstances, or actually insolvent, bas the right of preference among his creditors. He may assign his property for the payment or security of one, to the exclusion of all others. Prior to the Code, the only limitation on this right of preference was, that the property transferred should be devoted, absolutely and unconditionally, to the payment of the preferred debts, without the reservation to the debtor of any personal benefit. The whole, or a part of his property, could be assigned and appropriated to his creditors in equal or unequal proportions. He could, also, stipulate that the creditors accepting the assignments should release him from all further liability on their demands. The authorities are collected in 1 Brick. Dig. 128, §§ 75, 76. The Code declares an assignment, or other conveyance stipulating for the release of the debtor, fraudulent and void as to the creditors of the grantor. — Bev. Code, § 1866. General assignments are not prohibited — preferences created by them are annulled, and they are converted into a security for the equal benefit of all creditors. — Bev. Code, § 1867; Holt v. Bancroft, 80 Ala. 193; Price v. Mazange, 31 Ala. 701. It was deemed in violation of sound policy to arm an insolvent debtor with the power of exacting from creditors a release from liability, as the price of a preference in payment or security, and though assignments and other conveyances with stipulations for a release, bad been supported, the statute intervenes and declares them, for the future, fraudulent. So it was deemed sound policy required that all general assignments, which, as defined by this court, are conveyances of all, or substantially all of a debtor’s property, by mortgage, deed of trust, or assignment, for the security of debts, without regard to the preferences expressed in them, should enure to the equal benefit of all creditors. No other changes in the principles settled by judicial decision, touching assignments, or other conveyances for the security of creditors, has been wrought by legislation. The legislature, not having intervened, we repeat, it is not for the courts to depart from these principles; nor, it seems to us, to look with disfavor on conveyances the legislature have not condemned, and the community are in the daily habit of giving and accepting, under the sanction of the law as the courts have declared it.

Whatever may be the form in which the preference is given — whether that of an assignment, or of a mortgage, or of a deed of trust, it must be made in good faith, without an intent to defraud other creditors. Omitting for future consideration an alleged simulation of debts in the assignment, and there is no fact or circumstance which justifies the imputation of a fraudulent intent on the part of the debtors, and certainly not as to the creditor, or the trustee. The intent was to secure the creditor, and indebtedness, the justness of which is not disputed. The debtor had the right to give, and the creditor the right to demand and to accept security. The property conveyed is not in disproportion to the amount of the indebtedness, and the time for the execution of the trusts by a sale, and the conversion of the property into money, and its application to the payment of the debts is not unreasonably prolonged. It is not possible, on these facts, to found the imputation of fraud. If there be fraud which vitiates the transaction, it must be deduced from the stipulations and conditions of the assignments. The principle by which these are to be tested, are well defined. In the absence of an actual intent to defraud, which would vitiate the conveyance, however just and fait its provisions appeared on its face to be, no assignment, or mortgage, or deed of trust for the security of creditors, has been declared void, if it distinctly and irrevocably declared the uses for which it was made, and without reserving to the debtor any personal benefit, the property was absolutely and unconditionally, within a reasonable time, devoted to the payment of the secured debt.

The assignment contemplates that the planting operations of the debtors should be continued for the current year, under their supervision, and that future advances should be made by the creditor, for their successful prosecution: and it is this feature which is supposed tobe inconsistent with an absolute, unconditional appropriation of the property to the payment of the enumerated debts, and is, in effect, a reservation for the use of the debtors. Conveyances with stipulations for the continuance of planting for the current year, when the property conveyed is of the kind employed in that business, have been too often supported in this court for their validity now to be questioned. — Ravesies v. Alston, 5 Ala. 297; P. &. M. Bank v. Clarke, 7 Ala. 765; DuBose v. DuBose, Ib. 235; Graham v. Lockart, 8 Ala. 9. If the crops to be produced are, with the existing property, to be devoted to the payment of the secured debts, it has not been supposed such a stipulation is a reservation of a benefit to the debtor, though thereby the residuum which must revert to him may be increased. It is not unusual in assignments to provide that the assignees, or the debtor, under their direction, may continue the business, and if it appears this is done, not for the interest and benefit of the debtor, and to tbe prejudice of unsecured creditors, but to promote tbe interests of tbe creditors wbo are preferred, they are sustained. — Burrill on Assignments, 281. In Cunningham v. Freeborn, 11 Wend. 240, tbe property assigned was a foundry, and tbe assignees were authorized to continue tbe business, for tbe purpose of working up materials, and completing tbe manufacture of any of tbe assigned property, and to pay sucb expenses as might be incurred thereby. Speaking of this provision of tbe assignment, Justice NelsoN said: “ In all this, I can see no violation of law, or of honesty and fairness aside from tbe principle of preference, which we are not at liberty to question. The establishment was large, and embraced tbe whole of tbe fund out of which tbe debts must be paid, if at all. It was a kind of property not readily convertible into money, and valuable and profitable only in tbe tbe business in which it bad been employed, and we cannot say that this provision in tbe assignment was injudicious, much less illegal. Tbe chance of a sale might be greater and better, by keeping tbe establishment in operation, than in tbe abandonment of it.” A similar decision was made in DeForest v. Bacon, 2 Conn. 633; Kendall v. New England Carpet Co. 13 Conn. 283; Foster v. Saco Manufacturing Co. 12 Pick. 451, and Woodward v. Marshal, 22 Pick. 468. Tbe court of appeals in New York have overruled Cunningham v. Freeborn, but on reasoning, which is in conflict with tbe views this court has uniformly taken of these voluntary conveyances by insolvent debtors, for tbe security of creditors. — Dunham v. Waterman, 17 New York, 9. Of course, as is suggested in one or more of tbe eases cited from our own reports, if an assignment contemplated tbe indefinite continuance of planting operations, it could not be sustained. But when tbe provision is simply for tbe temporary use, profitably to tbe creditor, of tbe property conveyed, until a sale can be effected judiciously, it is difficult to perceive any substantial objection to it. But tbe fact must not be overlooked, that in this assignment, tbe crops are more than tbe products of tbe property conveyed. They form a distinct part of tbe subject matter of tbe conveyance, and were to be cultivated not only on the lands conveyed, but other lands of tbe debtors not conveyed. They were the proper subject matter of assignment; and security for advances to aid in their cultivation, is sanctioned by the common law, and by tbe statutes. Tbe employment of tbe personal property assigned, in tbe cultivation of tbe crops, was tbe employment of it, in a mode which would increase tbe security of tbe creditor, and tbe fund for his payment. We’ do not understand that tbe assigned property must be immediately converted by a sale. The sale must be made in a reasonable time, and the reasonableness of any delay for which the assignment provides, will depend on the character of the property, the cause for it, and the particular circumstances of the case. It seems not to have been doubted, that a sale of the real estate would have been injudicious, leading to its sacrifice, ruinous alike to debtor and to *creditor, if made immediately. If stripped of the personal property on it, intended for its cultivation, it would have been abandoned, for it was an unsuitable season for renting. When these facts are all considered, it seems unreasonable to say it was illegal, or unjust, or immoral, to use the personal property, as it was used in the cultivation of crops on .the lands conveyed, and the lands not conveyed. Or, that the provisions of the assignment authorizing the use, are a reservation for the benefit of the debtor. The only benefit accruing to him, was the diminution of his debt, so far as the crops would satisfy it. It is said, “the crops were to go to the creditor, but not as belonging to the creditor, but as belonging to the debtor, and to be credited upon his debts.” The creditor has precisely the interest in reference to the crops, he has in reference to the lands, and in the existing personal property an equity to compel the trustees to appropriate them to the payment of the debts. The trustees have the same title to the crops, they have to the lands and personal property — the entire title, legal and equitable. The debtors have no other interest in the crops than they have in the other property. There is no distinction between them made by the assignment, and the trustees could, whenever they deemed it necessary, or they were directed by the creditor, have taken possession of the crops, or of the other property, real or personal. The case of Ticknor and Day v. Wiswall, 9 Ala. 305, (s. c. 6 Ala. 178) is not an authority for declaring this stipulation the reservation of a benefit to the debtors, or a fraud on other creditors. The two cases do not seem to us to bear any resemblance. There, an insolvent debtor, a merchant, executed a mortgage of real estate, and of personal property, including a stock of goods, wares and merchandise, stipulating for the retention of possession and use, with the power to rent the real estate, and to receive the rents and profits ; and with power to sell and dispose of the goods, and other personal property, and his duty was, as expressed in the stipulation, from the nett proceeds, to pay and satisfy the mortgage debt. The law day of the mortgage had passed for more than a year, his possession was unbroken, and he had continued to sell and dispose of the goods, and to replenish the stocks, not diminishing the mort-gage debt. It was in reference to this stipulation, and the continuous possession of the goods, dealing with them as his own, that Judge Goldthwaite said : “It is difficult to conceive why a debtor, on the eve of insolvency, should provide for the reservation of the power to sell, or of the use of the mortgage property, unless some benefit to himself was intended, and it seems equally so, to imagine how a creditor could consent to receive such a security without lending himself to carry out the debtor’s intention.” The court declined, when the case was first before it, to declare the stipulation avoided the mortgage. The retention of possession after the law day, and the continuous exercise of acts of ownership by the mortgagor, taken in connection with the unlimited power of disposition, created in the judgment of the court, a presumption of fraud, which it was the duty of the mortgagee to explain and remove, and which, if not explained, was fatal to the validity of the mortgage. The case does not declare, nor was it intended to declare, that a mortgage is avoided by the reservation of the possession and use of the mortgaged property, if not extended to an indefinite period beyond the law day, or, if the law day is not so unreasonably postponed, as of itself from the mere delay, to tie up the property for the ease and advantage of the debtor. Beyond this, the court could not have gone, without infringing the rule so often announced, that the reservation to the mortgagor of possession and use, until the law day, was the mere expression of what the law would have implied in its absence. In any view, the distinction between that ease and the present, is marked and palpable. The debtors are not entitled to the use of the property, nor have they any power of disposition. The use is appropriated, as is the property itself, to the security and payment of the preferred debts, and is for the benefit of the creditor, rather than the benefit of the debtor. The power to sell, or otherwise dispose of the property, is exclusive in the trustees, and no right to control it resides in the debtors, by any term of the assignment. There are several cases, subsequent to that of Ticknor & Day v. Wiswall, which would probably now compel the courts to declare the stipulation for possession, with the right to dispose of such property, as goods, wares and merchandise, made by an insolvent merchant, would be construed as the reservation of a benefit to the debtor, inconsistent with an absolute, unconditional appropriation of the property to the payment of the secured debts. — Constantine v. Twelves, 29 Ala. 607; Price v. Mazanye, 31 Ala. 701; King v. Kenon, 38 Ala. 63. These cases do not seem to us to have any feature in common with the case under consideration. The power of disposition, with no other security for its just exercise, than the integrity of the debtor, is too nearly allied to a power of revocation to be supported, especially when the subject is propertjr, held only for sale in the ordinary course of the debtor’s business. — Bump on Fraud. Conv. 161. A careful examination of this assignment, fails to disclose that it contains any stipulation or provision, condition or trust, not heretofore pronounced by this court, free from mischievous qualities. They may be discountenanced by other tribunals, and may not be in harmony with their jurisprudence; an inquiry on which, it is not our province to enter. It would be gross injustice, if the conveyance was now annulled, when the parties -were invited into it, by an unbroken chain of judicial decision.

Every assignment, or security for the payment of debts, necessarily involves a resulting trust to the debtor. When the debts are paid, if the property, or any portion of it remains, it reverts to the debtor. The creditor has an equity merely to appropriate it to the payment of his debt, which is extinguished by the satisfaction of the debt. If trustees are interposed, and clothed with the title, the title is charged with the trusts, and when these are performed, the title terminates. Hence, from the case of Malone v. Hamilton, Minor, 286, to the present time, it has uniformly been held, that when arv assignment is for the security of a part only of the grantor’s creditors, to the exclusion of others, a stipulation for the reversion to the debtor of any part of the property, or for the payment to him of the surplus of the proceeds of sale, which may remain after the satisfaction of the debts, is but the expression of the legal effect of the conveyance, and does not affect its validity. — Johnson v. Cunningham, 1 Ala. 258; Ravesies v. Alston, 5 Ala. 297; Hindman v. Dill, 11 Ala. 689; Brown v. Lyon, 17 Ala. 659; Miller v. Stetson, 82 Ala. 161. _

_ The remaining question, touching the validity of the assignment, is the alleged simulation of debts. The debts constitute the consideration which supports the assignment, and must be actual, existing liabilities. The wilful, deliberate introduction of fictitious debts, or the intentional exaggeration of the amount of real debts, in which debtor and creditor participate, is feigning a consideration, and a fraud, which will vitiate the assignment. Error in the description of debts, or the» introduction of fictitious debts, to which the creditor is not privy, will not vitiate it. — Stover v. Henington, 7 Ala. 142; Graham v. Lockhart, 8 Ala. 9; Anderson v. Hooks, 9 Ala. 704; Tatum v. Hunter, 14 Ala. 557. The simulation supposed to exist in the present case, lies in the supposition that tbe assignment operates a security for tbe acceptance of tbe bills of exchange and for tbe judgments which were the consideration of these bills. But the assignment is not a security for tbe payment of tbe judgments, nor does it purport, nor was it so intended to operate. It is a security for the bills of exchange, wbicb are not tbe same debts as tbe judgments, but separate and independent debts, involving other parties, and different liabilities. Tbe judgments were presently due, capable of enforcement by compulsory process, at tbe election of tbe creditors. Tbe bills were running to maturity, not causes of action until they became due, and then, if not paid, tbe subject of suits. The defendants in tbe judgments, were alone liable for their payment. The bills of exchange were tbe debts primarily of tbe acceptors, as to tbe creditor, and if they failed to pay, of tbe drawers, if they were charged by notice of tbe dishonor. Tbe payment of tbe judgments, would have satisfied all liability of tbe drawers to tbe acceptors, but it would not have extinguished their liability to tbe holders of tbe bills. Tbe assignment is not open to tbe imputation therefore of securing two separate and distinct debts, when in fact but one existed. It operates a security for but one debt, and tbat is the liability of tbe company on tbe acceptances. Notes, or bills, are frequently given for pre-existing debts, and payable at a distant day from tbe maturity of such debts. They do not operate a payment, unless so intended by tbe parties. Tbe only effect of taking them, is to suspend tbe remedy on tbe pre-existing debt, until they m&tme. — McCravey v. Carrington, 35 Ala. 698; Mooring v. Ins. Co. 27 Ala. 254. If an assignment was made for tbe security of such note or bill, with a reference to a prior security for tbe pre-existing debt, it would scarcely be supposed, tbe assignment was open to the imputation of keeping alive two debts, when but one existed. Such a case would be stronger than tbe one now presented, and if tbe property assigned exceeded in value tbe amount of tbe secured debts, it might be a circumstance of suspicion, but could not be more. It seems to be supposed, tbe judgments were satisfied by tbe acceptances, and therefore the assignment is deceptive in treating them as unsatisfied, and tbe plaintiffs, or their assignees, as having tbe right to issue executions on.them. Whether tbe acceptances should operate a satisfaction of the judgments, was tbe legitimate subject of agreement between tbe judgment creditors, tbe debtors, and the acceptors of tbe bills, As in tbe case of a payment of a judgment by a stranger, whether it shall operate a satisfaction, depends on tbe intention and agreement of tbe parties when it is made, Tbe judgment may, as in this case, be transferred, and execution in tbe name of tbe plaintiffs, for tbe benefit of tbe party paying, authorized. — Freeman on Judgments, § 468. In Harbeck v. Vanderbilt, 20 N. Y. 395, a judgment bad been rendered against several defendants, one of whom paid in cash tbe proportion be was liable to pay, as between him and bis co-defendants, and for tbe remainder gave tbe plaintiff bis negotiable promissory note, indorsed, for bis accommodation, by Yanderbilt. An assignment of tbe judgment to a trustee for tbe protection of Yanderbilt, against bis liability as indorser, was supported, tbe court saying: “Tbe assignment of tbe judgment to protect bim against bis liability, was just as legitimate and proper, as it would bave been to indemnify bim for money paid.” It is impossible, it seems to us, to misunderstand the transaction between the parties, or to deduce from it an illegal or fraudulent intent. The judgments were transferred to tbe company, tbe right to issue execution on them at pleasure was reserved, and operated as a certain security for indemnity against their liability as acceptors. So regarding it, tbe company bad two securities for protection against their liability, that afforded by tbe assignment and that afforded by tbe judgments. It is not an objection to tbe assignment that any one or more of tbe debts were already secured by mortgage or by judgment. — Burrill on Assignments, 142. It not infrequently occurs that a creditor has more than one security for a debt, or more than one fund, to which be can resort for payment. If other creditors bave rights on one only of such securities, or can look to one only of the funds, tbe powers of a court of chancery are adequate to protect them, by requiring that tbe favored creditor shall first exhaust the security, or fund, to which they can not resort, before appropriating tbe other. In such cases it may be proper fox the creditor, if taking a new security by assignment, to mention tbe prior securities. Tbe failure to do so, is not necessarily inconsistent with good faith, and can not be regarded as a badge of fraud. — Stern v. Fisher, 32 Barb. 198.

It is insisted, however, that tbe connection between the judgments and tbe accepted bills, was concealed, and tbe concealment was premeditate, to avoid tbe appearance of a general assignment, and its operation as a common security for all creditors. It is difficult to read tbe assignment without discovering that there is a connection between tbe accepted bills and tbe judgments, or without tbe discovery of facts which would excite tbe reasonable belief of such connection. Tbe reservation of a right to enforce the judgments, notwithstanding tbe assignment, is unnecessary, if the right was not reserved to some party to the assignment, having authority to control them, and a party who, by accepting the assignment, would waive that right, or might be supposed to waive it. There is no party to the assignment, other than the beneficiary acquiring rights by it, which are at all inconsistent with the enforcement of the judgments, and the only rights it acquires, bearing the semblance of inconsistency, is that of indemnity against the acceptances of the bills. Security for the other debts, of which the beneficiary was the creditor, was not inconsistent with the enforcement of the judgments. As matter of fact the charge of concealment is unwarranted, and the motive for the concealment does not exist, if the facts had been distinctly stated, and not left in any degree to inference, the transaction is not, in legal effect, a general assignment. We have no doubt the parties intended to avoid a general assignment, and it was their legal right to avoid it. If they have resorted to no contrivance, and no covinous practices to avoid it, while they may have acquired liens on all the debtor’s estate, they have violated no law, and offended no right of other creditors.

A general assignment, enuring under that statute to the equal benefit of all creditors, as it may be defined under our decisions, is a voluntary transfer, by a debtor, of all, or substantially all, of his estate subject to execution, for the security of one or more creditors in preference to others. — Holt v. Bancroft, 30 Ala. 193; Price v. Mazange, 31 Ala. 701; Warren v. Lee, 32 Ala. 440; Stetson v. Miller, 36 Ala. 642; Longmire v. Goode, 38 Ala. 579; Craioford v. Kirksey, 55 Ala. 282. As will be seen hereafter, the term voluntary, is not used in the sense in which it is frequently employed — that of being without valuable consideration. It is not material what may be the form of the transfer — it may be in the form of a mortgage, or of a deed of trust, or of an assignment proper and technical, if security to particular creditors, in preference, or to the exclusion of others, is intended, and it operates as the parties to it intend. Such an assignment may be made by one, or by several instruments, and if made by several, they may be executed concurrently, or there may be an interval between the times of their execution. If they are parts of the same transaction, executed in pursuance of a purpose, to convey the debtor’s entire property, or substantially all of it, as security for one or more creditors, to the exclusion of all the others, the several instruments will be construed as one, operating as one would operate, a general assignment. Whatever may be the form or character of the instrument, to operate as a general assignment, it must proceed from the will, and be the act of the debtor; hence, we defined the transfer as voluntary. It is the preference of creditors, springing from tbe mere volition of tbe debtor, created by bis act, investing tbe creditor with a specific lien on bis entire estate, tbe statute condemns. Prior to tbe statute, sucb preferences were supported — now they are annulled, and tbe conveyance in which they are found, is preserved as an equal security for all creditors. Tbe statute bas no reference to liens arising by operation of law — these are not witbin its letter, or spirit, or tbe mischief it was intended to avoid. Tbe lien acquired by tbe assignment, operated on a part only of tbe debtor’s property. The lien of tbe executions issuing on tbe judgments operated on their entire estate. Tbe assignment was an absolute transfer of title and estate, tbe act of tbe debtor. Tbe lien of tbe executions was not in any sense a transfer — it was not jus ad rem, or jus in re. It was simply a right to charge tbe debtor’s estate, by compulsory sale, with tbe payment of tbe judgments. — Freeman on Judgments, §§ 338-42.

In Pennsylvania, a statute provides, that all assignments in trust for tbe benefit of one or more creditors, creating preferences, shall enure to tbe benefit of all creditors in proportion to their demands. Tbe question, whether judgments confessed, operating a lien on the estate of tbe debtor, and thus creating a preference, fell witbin tbe statute, has been several times considered by tbe courts of that State. — Blakey’s Appeal, 7 Barr. 449; Woman v. Walfersberger, 19 Penn. 59; Grey v. McIlree, 26 Penn. 92. - In tbe case last cited, tbe court say: “There is little, if any, similarity between an assignment and a judgment. Tbe one is an absolute transfer of its subject matter, whilst tbe other is but tbe means whereby to enforce payment of a debt. An assignment passes tbe property in real and personal estate, rights and credits, whilst a judgment, of itself, gives no vested estate in any of tbe property of tbe defendant, merely creating a lien upon bis real estate, if any be bas at tbe time of its entry.” When several instruments are construed together, as constituting a general assignment, it is because they are of a kindred nature, operating as a transfer of property, in pursuance of a common prarpose to prefer particular creditors. Tbe lien of tbe executions was not created by tbe debtors — it was created by law, and was in existence before tbe assignment was contemplated. It is one of tbe superior rights tbe law awards to tbe vigilance of tbe creditors, who bad reduced their claims to judgments. To connect it with a' subsequent assignment, that tbe two may operate as a general assignment, would simply deprive these creditors, or their assignees, of a legal right, honestly acquired, and give it to another, having no sup.erior equity. Liens created by law may be abrogated by the legislature, at tbeir discretion, without invading any constitutional guaranty. The day after the execution of tbe assignment, the statute creating the liens might have been repealed. "Would this repeal have changed the character of this transaction — converting it from a general, into a special assignment ? The error which, it seems to us, pervades the whole argument of the appellee, is in attempting to connect rights created by law, with rights created by the act of the debtors, and give them the same operation and effect. We are not able to pronounce the assignment fraudulent, or to declare that the transaction between the parties should operate as a general assignment.

The decree must be reversed, and a decree here rendered, dismissing the bills, original and amended, and the appellee must pay the costs in this court, and in the Court of Chancery.

Stone, J., not sitting.