Gibson v. Rees

Citations

• 50 Ill. 383

Syllabus

<p>1. Assignment foe the benefit of ceeditoes—what interest will pass thereby—■ and of a resulting trust in favor of creditors. A debtor made an assignment of his property to a trustee for the benefit of his creditors,—prior to making the assignment the debtor had purchased of the trustees of the Illinois and Michigan Canal, a number of lots, which had been laid out on the canal lands. He had paid a part of the purchase money but was in default in the payment of the balance, and by the terms of the purchase, the trustees of the canal had, as the agents of the State, the right to declare a forfeiture of the contract, and retain the purchase money already paid. These lots were embraced in the deed of assignment, and that was the condition of the title at the time such deed was made. The State, however, did not avail itself of the right to declare a forfeiture, but by an act of the legislature permitted purchasers of canal lands, thus situated, to apply the purchase money which had been paid, upon a portion of the premises purchased, and thereby to acquire a title to such portion, releasing the residue of the lands purchased to the State. The trustee, under the deed of assignment, availing himself of this privilege, applied the purchase money which had been paid by the debtor,upon a portion of the lots purchased, and obtained a patent from the State to the portion so paid for, and released the residue to the State: Held, that at the time of the assignment, the debtor had such an interest in the lots so purchased by him, as could be transferred by the deed, and as to such portion of the lots as the trustee obtained a title to, by such application of the money which had been paid by the debtor, a trust would result to the creditors under the assignment.</p> <p>2. Same—of the right to malee an assignment and to prefer creditors. The owner of property has the legal right to assign all his property and effects, to another in trust for the benefit of his creditors; and in th