Halsted v. Straus

• Decision Date: 05 October 1887
• Citation: 32 F. 279
• Parties: HALSTED and others v. STRAUS.
• Court: U.S. District Court — District of New Jersey

32 F. 279

HALSTED and others v. STRAUS.

United States Circuit Court, D. New Jersey.

October 5, 1887

McCarter Williamson & McCarter, for plaintiffs.

R Byington and Edward M. Colie, for defendant.

BRADLEY Justice.

This is an action in indebitatus assumpsit, brought by the plaintiffs for the use of their assignee, Lewis May, all citizens of New York, against Straus, a citizen of New Jersey. The defendant pleaded in abatement that, before the bringing of this suit the debt sued for was attached by writ of attachment issued out of the supreme court of New Jersey, at the suit of certain persons trading under the firm name of Deering Milliken & Co., (one of whom was a citizen of New Jersey, the others not,) creditors of Halsted, Haines & Co., the plaintiffs in this suit; and that the attachment had gone to judgment by default against the latter, and a scire facias against the defendant, to show cause why he should not pay the debt involved in this suit to the said plaintiffs in attachment. The plaintiffs replied that before the execution of said attachment Halsted, Haines & Co., who were doing business in New York, made a general deed of assignment of all their property and assets, both partnership and personal, including the debt now in dispute, to the said Lewis May, in trust for the creditors of said firm of Halsted, Haines & Co., and of the individual members of said firm, in the manner and proportions set forth in said deed, which is fully set out in the replication; that May accepted said trust, and proceeded to execute the same; that the attachment referred to in the plea was issued to recover a debt incurred by Halsted, Haines & Co. in New York, where said firm of Deering, Milliken & Co. transacted business, and that they have never carried on business in New Jersey. It appeared by the deed of assignment set out in the replication that the assignors made preferences in favor of certain of their creditors. The defendant demurred to this replication on the following grounds:

(1) That the assignment was immaterial; the mere existence of the attachment was sufficient to protect the defendant from paying the debt to Halsted, Haines & Co., or their assignee. (2) That the state court having assumed jurisdiction of the subject-matter, and impounded the debt by attachment, the federal court will not entertain a suit for the same debt. (3) That the deed of assignment, not being for the equal benefit of all the creditors, is void in New Jersey as against Deering, Milliken & Co., one of whose partners was a citizen of New Jersey.

Taking up the last point first, it is true that the statute of New Jersey declares that assignments in trust for the benefit of creditors shall be for their equal benefit, in proportion to their several demands, and that all preferences shall be deemed fraudulent and void. But this law applies only to New Jersey assignments, and not to those...