Brashear v. West
32 U.S. 608 (1833)

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U.S. Supreme Court

Brashear v. West, 32 U.S. 7 Pet. 608 608 (1833)

Brashear v. West

32 U.S. (7 Pet.) 608

Syllabus

It is not necessary to the validity of a deed of assignment for the benefit of creditors that creditors should be consulted, though the propriety of pursuing such a course will generally suggest it when they can be conveniently assembled. But be this as it may, it cannot be necessary that the fact should appear on the face of the deed.

That a general assignment of all a man's property is per se fraudulent, has never been alleged in this country. The right to make it results from the absolute ownership which every man claims over that which is his own.

An assignment was made by Francis West to certain trustees of all his property, giving a preference to particular creditors who were to be paid their claims in full before any portion of the property assigned was to be divided among his other creditors. By the court:

"The preference given in this deed to favored creditors, though liable to abuse, and perhaps to serious objections, is the exercise of a power resulting from the ownership of property which the law has not yet restrained. It cannot be treated as a fraud."

The assignment excluded from the benefit of its provisions all creditors who should not within ninety days execute a release of all claims and demands on the assignor of any nature or kind whatsoever. By the court:

"This stipulation cannot operate to the exemption of any portion of a debtor's property from the payment of his debts. If a surplus should remain after their extinguishment, that would be rightfully his. Should the fund not be adequate, no part of it is relinquished. The creditor releases his claim only to the future labors of his debtor. If this release were voluntary, it would be unexceptionable. But it is induced by the necessity arising from the certainty of being postponed to all those creditors who shall accept the terms by giving the release. It is not, therefore, voluntary. Humanity and policy both plead so strongly in favor of leaving the product of his future labors to the debtor who has surrendered all his property that in every commercial country known to the Court except our own, the principle is established by law. This certainly furnishes a very imposing argument against its being denied. The objection is certainly powerful that it tends to delay creditors. If there be a surplus, the surplus is placed in some degree out of the reach of those who do

Page 32 U. S. 609

not sign the release, and thereby entitle themselves under the deed. But the property is not entirely locked up. A court of equity, exercising chancery jurisdiction, will compel the execution of the trust, and decree what may remain to those creditors who have not acceded to the deed. Yet the Court is far from being satisfied that upon general principle such a deed ought to be sustained."

Whatever may be the intrinsic weight of objections to such assignments, they seem not to have prevailed in Pennsylvania. The construction which the courts of that state have put on the Pennsylvania statute of frauds must be received in the courts of the United States.

The assignment transferred to the assignees a debt due to the assignor by the complainant. The complainant filed a bill against the assignees, claiming to set off against the debt assigned to them the amount of a judgment obtained by him against the assignor after the assignment. By the court:

"If, subsequent to the assignment's being made and before notice of it, any counterclaims be acquired by a debtor to the assignor, these claims may unquestionably be sustained. But if they be acquired after notice, equity will not sustain them. If it were even true that they might have been offered in evidence in a suit at law brought in the name of the assignor, he who neglected to avail himself of that advantage cannot, after judgment, avail himself of such discount as plaintiff in equity."

To deprive a party of the fruits of a judgment at law, it must be against conscience that he should enjoy them. The party complaining must show that he has more equity than the party in whose favor the law has decided. Construction of the laws of Pennsylvania relative to foreign attachments.

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