Miller v. Shriver
| Decision Date | 11 July 1900 |
| Docket Number | 15 |
| Citation | 46 A. 926,197 Pa. 191 |
| Parties | Miller v. Shriver |
| Court | Pennsylvania Supreme Court |
Argued May 28, 1900
Appeal, No. 15, May T., 1900, by plaintiff, from decree of C.P. Adams Co., April T., 1900, No. 1, dismissing bill in equity in case of Pius A. Miller, J. L. Butt and John B McPherson, Trustees, v. David R. Shriver. Affirmed.
Bill in equity to cancel a deed.
From the record it appeared that on March 25, 1899, E. A. Weaver executed a deed of conveyance absolute on its face of all his real estate to David R. Shriver. At the time of the conveyance Weaver was largely indebted to Shriver upon judgments and upon notes given by Weaver upon which Shriver was either surety or indorser. By a contemporaneous agreement Shriver bound himself to pay certain liens upon the property and certain other debts. The deed was not recorded until October 12, 1899. On November 10, 1899, a petition for involuntary bankruptcy was presented against E. A. Weaver and on December 13, 1899, Weaver was declared a bankrupt. Subsequently plaintiffs were chosen trustees in bankruptcy of Weaver. The bill prayed that the deed to Shriver should be annulled, that the defendant be restrained from interfering with the trustees in taking possession of the real estate of Weaver, and that the defendant account to plaintiffs for the rents, issues and profits of said real estate. Defendant demurred on the ground that the court had no jurisdiction, that the plaintiff had an adequate remedy at law, and that no sufficient ground had been laid for an injunction and an accounting.
The court sustained the demurrer and dismissed the bill.
Error assigned was the decree of the court.
The decree is affirmed at the cost of the appellant.
George J. Benner and W. C. Sheely, with them Wm. & Wm. Arch. McClean, for appellants. -- The court erred in failing to hold that the deed of March 25, 1899, was not an assignment for the benefit of creditors and void for want of record within thirty days after its execution under the provisions of the act of March 24, 1818: Driesbach v. Becker, 34 Pa. 153; Wallace v. Wainwright, 87 Pa. 266; Lucas v. Sunbury & Erie R.R. Co., 32 Pa. 458; Heath v. Page, 63 Pa. 123; Dickson's Est., 166 Pa. 134.
The Supreme Court has declared the proper mode of construction of statutes in the case of Philadelphia v. Ridge Ave. Railway Co., 102 Pa. 197, in which it says that it is an old rule of construction that if one interpretation would lead to an absurdity, the other not, we must adopt the latter, and that interpretation which leads to the more complete effect which the legislature had in view is preferable to another: Mauch Chunk v. McGee, 81 Pa. 435; Howard Assn.'s App., 70 Pa. 346.
An act susceptible of two interpretations will be given that which renders it constitutional and valid: Boisdere v. Citizens' Bank, 29 Am. Dec. 455.
That the court of common pleas of Adams county had jurisdiction is settled by numerous authorities, and was not seriously questioned in the court below: In the Matter of Woodbury, 2 Nat. Bankruptcy News, 287; In the Matter of Baker, Rickertson & Co., 2 Nat. Bankruptcy News, 133; Loveland on Bankruptcy, 472; Robinson v. White, 1 Nat. Bankruptcy News, 513; In the Matter of Sievers, 1 Nat. Bankruptcy News, 68; In the Matter of Gerdes, 2 Nat. Bankruptcy News, 131.
That the remedy of the trustee in bankrupcy is by bill in equity to set aside a fraudulent preference has been recognized by the courts again and again: Louisville Trust Co. v. Marx, 3 Am. Bankruptcy Rep. 450; Pepperdine v. Headley, 3 Am. Bankruptcy Rep. 455; Shutts v. First Nat. Bank, 3 Am. Bankruptcy Rep. 492; Woodbury's Case, 3 Am. Bankruptcy Rep. 457.
Our courts of equity have always been open to set aside fraudulent conveyance: Meurer's App., 119 Pa. 115; Williams v. Kerr, 152 Pa. 560; Edward's App., 11 Cent. Repr. 184; Sheehan v. Gough, 5 Kulp, 116; Skiles v. Nauman, 2 Lanc. Law Review, 145; Fowler v. Kingsley, 87 Pa. 449; Artman v. Giles, 155 Pa. 409.
O. C. Bowers, with him William Hersh, for appellee. -- As to the first proposition that the deed to Shriver must be held to be an assignment for the benefit of creditors, the case of York County Bank v. Carter, 38 Pa. 446 () is so precisely similar to the case at bar as to make it a binding authority.
The purchase of a tract of land by agreement under sale, subject to the payment of the purchase money and interest due to a third person, is a covenant by the vendee to pay said purchase money and interest, upon which an action may be maintained in the name of the vendor for the use of him to whom it is due: Campbell v. Shrum, 3 Watts, 60; Blank v. German, 5 W. & S. 36.
A creditor may take from an insolvent debtor an assignment of securities, and a bill of sale of personal property in payment of an actual debt, although both debtor and creditor knew that the effect of the transaction will be to defeat the claims of other creditors: Penn Plate Glass Co. v. Jones, 189 Pa. 290; York County Bank v. Carter, 38 Pa. 446.
An assignment made directly to the creditors beneficially interested in it either as collateral security or in satisfaction, is not an assignment in trust, and need not be recorded under the act of March 24, 1818: Chaffees v. Risk, 24 Pa. 432.
The act of March 24, 1818, requiring assignments in trust to be recorded within thirty days, has no application to an assignment made directly to the creditors beneficially interested in it, either as collateral security or in satisfaction of their claim: Henderson's App., 31 Pa. 502; Fallon's App., 42 Pa. 235; Griffin v. Rogers, 38 Pa. 382; Beans v. Bullitt, 57 Pa. 221; Reehling v. Byers, 94 Pa. 316.
In view of the numerous and explicit declarations of this court that a sale or conveyance bona fide, in payment of an actual debt, although both debtor and creditor know that the effect of the transaction will be to defeat the claims of other creditors, is perfectly good and valid under the laws of Pennsylvania, it is hardly worth while to further discuss the question: Wilt v. Franklin, 1 Binn. 514; Uhler v. Maulfair, 23 Pa. 481; York County Bank v. Carter, 34 Pa. 446; Reehling v. Byers, 94 Pa. 316; Penn Plate Glass Co. v. Jones, 189 Pa. 290.
In view of the wide difference which exists between transfers that are acts of bankruptcy, and transfers that may be avoided, the supposed inconsistency in the act between the time provided for the filing of the petition and the time within which a transfer may be avoided, entirely disappears: In re Wright, 2 Am. Bankruptcy Rep. 364; Loveland on Bankruptcy, 464, 465.
We argued in the court below that the plaintiff's bill in this case should be dismissed on the ground, also, that it is a mere ejectment bill, and relied upon Northern Pa. Coal Co. v. Snowden, 42 Pa. 488, Long's App., 92 Pa. 171, Stewart's App., 78 Pa. 88, Richard's App., 100 Pa. 51, Barclay's App., 93 Pa. 50, and Kennedy's App., 81 * Pa. 163. We still think this position to be sound.
Before GREEN, C.J., McCOLLUM, MITCHELL, DEAN, FELL, BROWN and MESTREZAT, JJ.
The conveyance which the court was asked to set aside on the ground that it was invalid under the law of this state and under the federal bankruptcy act of 1898 was made by a debtor to his creditor for an admittedly adequate consideration, and without an intent to hinder or defraud other creditors. The good faith of the transaction was not attacked. The only ground of invalidity alleged in the bill is that the conveyance was made with the intent to prefer certain creditors.
Under our decisions the preference was lawful. The Act of April 17, 1843, P.L. 273, forbids preferences in assignments only. An insolvent debtor may prefer a creditor in any manner except by a conveyance in trust. He may do it by a conveyance of real estate to the creditor, by the transfer of personal property or the confession of judgment to him, as well as by the payment of money. He may convey his whole property to a creditor in consideration of the satisfaction of the creditor's claim and the assumption by him to pay the balance of the purchase money in discharge of the...
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