Sutherland v. . Bradner

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] A preferential assignment by an insolvent of all his estate, in trust, for the payment of but part of his creditors, which provides that after paying the creditors named, the remainder of the assigned estate shall be restored to the assignor, hinders and delays the unpreferred creditors, and it is void as against them. (Goodrich v. Downs, 6 Hill, 438; Barney v. Griffin,2 N.Y. 365; Collomb v. Caldwell, 16 id. 484.)

The appellants concede that, as against the plaintiffs' judgment, the assignment, in so far as it affects the real estate is invalid, but urge that it was validated by the so-called supplementary assignment; but if not, that it should have been reformed upon proof that the illegal clause was inserted through the mistake and inadvertence of the assignor and assignee without fraudulent intent. The instrument recorded June thirtieth, and called a supplementary assignment, did not validate the original assignment as against the plaintiffs' judgment, which was recovered and docketed between the dates of the two instruments, and became a legal lien on all of the assignor's real estate situated in the county wherein it was docketed. (Porter v.Williams, 5 How. Pr. 441; affirmed, 9 N.Y. 142; Gates v.Andrews, 37 id. 657; Schwartz v. Soutter, 41 Hun, 323; affirmed, 103 N.Y. 683; Averill v. Loucks, 6 Barb. 470;Metcalf v. Van Brunt, 37 id. 621; Smith v. Howard, 1 Sheld. 5; 20 How. Pr. 121.) The defendants alleged in their answers, and offered to prove, that the assignor intended by his assignment to devote all his property to the payment of his debts, and that the provision for the restoration to the assignor of the remainder after the payment of the preferred creditors was inadvertently inserted by mistake, and without intent to defraud the creditors of the assignor, which evidence was rejected on the ground that it would afford no ground for a reformation of the assignment as against the lien of the plaintiffs' judgment. It is clear, on principle and authority, that an assignment void on its face cannot be reformed by an action so as to cut off a lien of a judgment recovered after the execution of the illegal assignment and before its reformation. (Whitaker v. Gavit, 18 Conn. 522; Whitaker v. Williams, 20 id. 98; Farrow v. Hayes, 51 Md. 504.) This assignment, by its terms, hindered and delayed the creditors of the assignor, and it was not competent to show, for the purpose of cutting off the lien of the judgment, that no fraud was intended by the assignor and assignee.

The judgment should be affirmed, with costs.

All concur, except BRADLEY and HAIGHT, JJ. not sitting.

Judgment affirmed.