Opinion
January Term, 1848
E. Sandford, for Appellant.
J.L. Mason, for Respondents.
B.F. Butler, for the United States.
The Act of Congress, (1799, Chap. 128, § 65.) so far as it touches the present question, only gives a priority to the United States in cases of insolvency, where a "debtor, not having sufficient property to pay all his or her debts, shall have made a voluntary assignment thereof, for the benefit of his or her creditors." This provision never has been, and I think never should be, carried beyond cases where the debtor has made an assignment for the benefit of his creditors in general. Here the assignment was made for the benefit of Brunel; and for no one else. No debts were to be paid, except such as were due to him, and those for which he had made himself liable, either as endorser or surety, for the assignors. It is true that paying the debts for which Brunel stood as endorser or surety would in effect satisfy the creditors to whom those debts belonged. But that was only an incidental effect of an assignment which was made for the benefit of Brunel alone. No fair and reasonable construction of the act of Congress will give the government a preference when the debtor has only assigned his property for the purpose of paying or indemnifying a single creditor or surety. This question was considered, and the authorities were examined in the U.S. vs. McLellan, (3 Sumner 345) and although this case may be distinguished from that, the reasoning of Mr. Justice Story goes the whole length of deciding that this bill cannot be maintained, and I am fully of that opinion.
The assignment states very distinctly the object for which it was made; and there is nothing in the case to impeach the statement.
The decree of the Court of Chancery should be reversed; and a decree should be entered allowing the demurrer and dismissing the complainants' bill, with costs in the Court of Chancery. Costs on the appeal are in the discretion of the Court; (2 R.S. 618, § 25) and where a decree is reversed, I think no costs should be given. That was the rule of the late Court of Errors for a long time, and until within a very recent period.
Such are my views of the case, and such is the judgment of the Court.
Decree accordingly.
JEWETT, CH. J., dissented.