Adler v. Ecker

• Decision Date: 01 January 1880
• Citation: 2 F. 126
• Parties: ADLER and others v. ECKER, defendant, and BOOTH, garnishee.
• Court: U.S. District Court — District of Minnesota

2 F. 126

ADLER and others v. ECKER, defendant, and BOOTH, garnishee.

United States Circuit Court, D. Minnesota.

1880

Rogers & Rogers, for plaintiffs.

Young &amp Newell, for defendant and garnishee.

NELSON D.J.

Suit was brought by plaintiffs against Otto Ecker and judgment recovered. Garnishee proceedings were commenced against N. R Booth, to whom Ecker had made an assignment for the benefit of creditors. After disclosure by the garnishee a supplemental complaint was filed by permission of the court under the statutes of the state of Minnesota, and it is charged that Ecker made the assignment to Booth to defraud creditors.

The questions presented for consideration are: First. Can this court entertain a suit against the assignee, Booth, who has given a bond to faithfully fulfil his trusts, and is amenable to the state court, by virtue of the statutes of the state of Minnesota regulating proceedings under assignments for the benefit of creditors? Second. Is the assignment to Booth fraudulent and void as to Ecker's creditors?

There is no law of the state authorizing assignments for the benefit of creditors, but such conveyances are recognized and regulated by the statute for better security. The assignee is selected by the assignor, and can only be removed for such dereliction of duty as would subject him to removal by a court of equity. In fact, the statutory enactment to this extent is declaratory of the jurisdiction of a court of chancery over trustees, among whom are assignees under voluntary conveyances for the benefit of creditors.

The property in possession of such assignee is not in custodia legis, for the assignee is not an officer of the state court but a trustee, subject to statutory provisions compelling him to execute his trust according to the terms prescribed by the assignor in the conveyance. The authority of the assignee depends upon the validity of the assignment, and is not conferred by the court. The right of a creditor or other person interested to contest the legality of a voluntary conveyance in a court of competent jurisdiction is not obstructed by the law prescribing the manner of executing assignments made for the benefit of creditors.

A creditor having a standing in the federal courts can contest the validity of such assignment, and a state law cannot deprive him of it.

It remains only to determine whether this assignment was made with intent to delay, hinder and...