McCallie & Jones v. Walton

Harris, J.

1. By reference to the facts in this case, it appears that the Augusta Insurance and Banking Co., on the 29th December, 1865, made in behalf of all its creditors an assignment to Robert Walton, Sr., and Wm. A. Walton, in trust, etc. This corporation at that time existed, and has not been dissolved, either by judgment of forfeiture, or by a surrender of its franchises, accepted by the Legislature. What reason then, was there, that it should not, like a natural person, make a fair assignment in trust for all its creditors f That it was permissible by the rules of a common law, seemed too clear to be at this day a matter of denial. In Georgia, no statute prevents an assignment by an existing corporation.

2. But it has .been argued with great earnestness, that the terms of the assignment brought it within the purview of the statutes of 13th and 27th Elizabeth, and that therefore, the assignment was void. The assignment being of all its property, real and personal, in trust for all its creditors, with direction that the assignees should proceed with reasonable and convenient dispatch to convert the property into money, and for that purpose, to sell and dispose of any or all of the property in such manner and on such terms as they may deem most for the interest of said trust, we do not perceive how the end to be accomplished, the conversion of the property into money for -distribution among the creditors of the company, could have been well and beneficially accomplished without such a fair and rational discretion as was conferred on the assignees. We see no attempt in that discretion to hinder and delay creditors, but on the contrary, a careful precaution to prevent a sacrifice of the property, whereby the creditors would have, been injured. Without such intent or purpose being made clearly visible, an assignment having the appearance of fairness, should not, by the Courts be held obnoxious to those statutes.

3. The record shows that the judgment of plaintiffs in error, who are contesting the validity of the assignment, was obtained subsequent to the assignment. At the excution of the assignment the claim of plaintiffs was upon a policy of insurance issued by the company for loss sustained by fire; their damages had not, at that time, by proof, been ascertained and fixed; the claim, therefore, had that grade only which contracts of a similar description had, no lien recognized by law had given it a priority. This was the status of the claim at the making of the assignment; the subsequent lien created by judgment could not be made to relate back, and class it with the judgments existing when the assignment was made. The result is that the assignees can regard in the payment of the creditors of the assignor only the rank or priority of the debts at the time of the assignment.

Judgment affirmed.