Gardner v. Commercial National Bank

Citations

• 95 Ill. 298
• 1880 Ill. LEXIS 178

Syllabus

<p>1. Assignment for benefit of creditors—by what law determined as to its validity. The validity of a deed of assignment of property, although executed iu another State, so far as it attempts to convey real estate situate in this State, must be determined by the laws of this State.</p> <p>2. Same—when fraudulent as to creditors. The placing of property in the hands of an assignee for any other purpose than to distribute it or its proceeds among creditors, is fraudulent and void as to creditors. If made to procure time or for the benefit of the assignor, it is fraudulent; and when the assignor has, or thinks he has more property than is' necessary to pay his debts, the assignment can only be presumed to be intended for his own benefit, for in that event he only is to be profited.</p> <p>3. A clause in an assignment for the benefit of creditors, authorizing the assignee to carry on the business of the assignor for such time as the assignee may deem necessary to prevent shrinkage and loss, and closing out and liquidating the same to the best advantage, where the deed recites that the assignor has property sufficient to pay three times what he owes, together with a clause that the assignee may make, assign, endorse and guarantee any and all bills of exchange and promissory notes or other paper for any new indebtedness or liability that may be contracted in carrying on the business, and to lease or mortgage the real estate, etc., unless compelled sooner to close upon the request of a majority of the creditors, clearly vests power in the assignee to hinder and delay creditors and renders the assignment fraudulent.</p> <p>4. To make such a deed valid the debtor’s property must he immediately and without restriction transferred to the assignee with a general authority to him to receive, hold and dispose of it for the equal benefit of all the creditors in the order of preference, if any.</p> <p>5. It has been held by this court that a clause in an assignment authorizing the