Livermore v. Jenckes - 62 U.S. 126 (1858)
U.S. Supreme Court
Livermore v. Jenckes, 62 U.S. 21 How. 126 126 (1858)
Livermore v. Jenckes
62 U.S. (21 How.) 126*
The laws oŁ Rhode Island allow an assignment to be made by a failing debtor, for the benefit of certain preferred creditors and for the exclusion of those who should refuse to execute releases from their respective claims.
The laws of New York do not permit such assignments.
Where an assignment with the above reservation was made in Rhode Island by a person and to persons residing there which conveyed to trustees certain property in Rhode Island and also property in New York, it was proper for the Circuit Court of New York to dismiss a bill filed by creditors residing there, provided there was no fraud in fact in the assignment.
The complainants never acquired nor ever had any lien upon the property in New York so as to subject it legally or equitably to their demand against the failing debtors either before or after it was carried into judgment in the supreme court of New York.
Livermore and Sexton, who filed the bill, were citizens of New York, and Jenckes, Farnum, and Waterman citizens of Rhode Island.
The complainants claimed to set aside an assignment made on the 19th of April, 1854, by Waterman, to Jenckes & Farnum, upon the ground that the assignment was to enure to such of Waterman's creditors who should sign a release. This provision, it was admitted, was valid by the laws of Rhode Island, where the assignment was executed, but invalid by the laws of New York, where the property in question was situated. Livermore and Sexton had become judgment creditors after the assignment was made, and if it could be set aside, the property would be open to execution upon their judgments.
The defendants all answered the bill, and much evidence was taken. After the cause was heard upon the pleadings and proofs, the circuit court passed the following decree:
"This cause having been heretofore brought on to be heard at final hearing on pleadings and proofs, and having been argued by Mr. A. J. Willard on the part of the plaintiffs, and by Mr. T. A. Jenckes and Mr. C. A. Seward on the part of the defendants, now, on consideration thereof, it is found and decided by the court, that the property in the State of New York, assigned by the defendant Waterman to the defendants Jenckes & Farnum, by the assignment mentioned in the pleadings herein, was taken into possession by said assignees, and converted into money, and the proceeds transferred to the State of Rhode Island, prior to the filing of the bill in this cause, and that the plaintiffs have no lien on said property, and that there was no fraud in fact in the making of said assignment, and it is therefore ordered, adjudged, and decreed, that the bill in this cause be and the same is hereby dismissed, with costs to the defendants against the plaintiffs to be taxed, and that the defendants have execution against the plaintiffs for such costs, according to the course and practice of this Court."
The complainants appealed from this decree.