Wagener v. Boynton , 29 S.C. 389 ( 1888 )

The opinion of the court was delivered by

Mr. Justice McGowan.

The Circuit Judge states the case as follows: “The complaint herein [let it appear in full] alleged that the defendant, W. R. Boynton, being largely indebted to a number of persons, on the 7th day of February, 1885, assigned all his property to the plaintiff for the benefit of his creditors; that the creditors met and appointed the plaintiff their agent, in the manner provided by law for such cases: that the plaintiff accepted the trusts of the deed and disposed of the property, and realized only sufficient to pay a small percentage of the debts provided for, leaving a large balance still due the creditors; that on the 10th day of December, 1884, and less than ninety days before the said deed of assignment was executed, the said W. R. Boynton was seized of a tract of land described in the complaint, and conveyed the said land in fee simple to the defendant, Mary W. Boynton, who is' now in possession thereof, which conveyance was without consideration, against the rights of the creditors of the said W. R. Boynton and void in law, the same having been made hvhile he was manifestly insolvent,’ and within ninety-days before the general assignment for the benefit of his creditors made to the plaintiff as aforesaid. Such being in substance the allegations of the complaint, the defendants moved to dismiss the complaint, because it did not contain facts sufficient to constitute a cause of action.”

After argument, the judge ruled as follows: “I am unable to see anything to distinguish the case alleged here from that provided for in the 2015th section of the General'Statutes, which gives the assignee the right of recovery of the property disposed of under such circumstances,” and overruled the demurrer. The defendants appeal upon the ground “that the Circuit Judge erred in dismissing the demurrer, and should have dismissed the complaint; for, upon a proper construction of the statute, the object aimed at is to prevent a preference of creditors, and the action which the assignee of an insolvent creditor is authorized to maintain. is against a creditor of an insolvent debtor, to whom property has been transferred within ninety days prior to the assignment. And the complaint does not allege that Mary B. Boynton was a creditor of the insolvent debtor.”

The question depends upon the proper construction of section 2015 of the General Statutes, which is one of a number in the chapter entitled “Of assignments for benefit of creditors.” The section under consideration reads as follows: “If any person being insolvent, within ninety days before the making of any assignment by him or her of his or her property for the benefit of his or her creditors, with a view to give a preference to any creditor or person having a claim against him or her, or who is under any liability for him or her, procures or suffers any part of his or her property to be attached, sequestered, or seized on execution, or makes any payment, pledge, assignment, transfer, or conveyance of any part of his or her property, either directly, absolutely, or conditionally, the person receiving such payment, pledge, assignment, transfer, or conveyance of any part of his or her property, or to be benefited thereby, or by such attachment, having reasonable cause to believe such person to be insolvent, and that such attachment, sequestration, seizure, payment, pledge, assignment, or conveyance, is made in fraud of the provisions of this chapter, the same shall be void, and the assignee may recover the property, or the value of it, from the person so receiving it or so to be benefited. Nothing, however, in this section shall be construed to invalidate any loan of actual value, or the security therefor, made in good faith upon a security taken in good faith, on the occasion of making such loan or any security bona fide made for advances,” &c.

This section is far from clear — -indeed, as it seems to us, it is very obscure. We think, however, it is apparent that each section of the chapter had a special purpose in reference to the general subject of assignments. For instance, section 2014 had already provided for the case of giving priority or preference in the assignment. Then comes the section (2015), which is under consideration, with the statement on the margin of the section, “As to all transactions within ninety days of insolvency.” We find it difficult to conceive that it was the intention to confine such transactions only to creditors, for then nothing could be easier for the insolvent debtor than to transfer his property to one not a creditor, put the money in his pocket, and then assign “a beggarly account of empty boxes.” It is true that in this section also, there are the words, “with a view to give a preference to any creditor,” but the following are added, “or a person having a claim against him or her, or who is under any liability for him or her.” What was intended by these Avords ? We can hardly suppose they are mere surplusage, meaning nothing other than “creditor,” whose case had just been disposed of. There must be some meaning beyond that. The proviso of the section, it seems to us, strengthens this vieAV. “Nothing, hoAvever, in this section shall be construed to invalidate any loan of actual value, or the security therefor, made in good faith upon a security taken in good faith on the occasion of the making of such loan, or any security bona fide made for advances.” We cannot doubt that the transactions here referred to are assumed to be Avithin the ninety days, and they áre in no Avay limited only to “creditors” — that is to say, those Avho were creditors before such transactions.

We concur with the Circuit Judge that the case stated in the complaint is covered by the poAver given to the assignee in section 2015, “to recover the property or the value of it, from the person [not creditor] so receiving it, or so to be benefited.”

The judgment of this court is, that the judgment of the Circuit Court be affirmed.

Mr. Justice McIver concurred.