Myers v. Fenn

MYERS, Kinsly, and Stout, having obtained judgment against Fenn, filed a bill against him and three other persons named respectively, Thompson, Green, and Roberts,-which last-named person had been Fenn's general assignee, charging a fraudulent transfer of property by him to them. Before issue was had on this bill, one Bowen, having a judgment against Fenn for $3260.96, and a certain Reed having one for $3916.75, upon each of which execution had been returned unsatisfied, united by petition in the bill of Myers, Kinsly, and Stout. The petitions were filed without any order of court; but no objection was made, and the hearing went on as if an order had been granted. The bill set forth that Fenn, being hopelessly insolvent, had conveyed large quantities of property both to Thompson and to Green, receiving therefor payment in county bonds and other securities then so greatly depreciated as to make it plain that a fraud was intended. And as respected Robbins (the general assignee), that the assignment was not made in good faith, but in order to place the property beyond the reach of executions, and it prayed that it might be set aside.

After Bowen and Reed filed their petitions the proceeding as respected Thompson and Green was dismissed by consent of parties, the matter of the general assignment being thus the only matter remaining charged as fraudulent.

As respected this it appeared by the testimony of Robbins, the general assignee, called by the complainants, and the only witness examined, that Fenn was wholly insolvent and had transferred all his property of every sort to him, for the benefit of his creditors exclusively. It appeared also, however, on cross-examination, that before the assignment was resolved on, Fenn, by the advice of his friends, had come to Thompson, asking him to become the assignee; that Thompson had declined; that being still urged, Thompson had gone to counsel and ascertained that upon an estate such as Fenn's he would be entitled to six per cent. commission; that examining Fenn's affairs he found that the amount of debt to be collected would be about $100,000, but that so very large an amount of it would be paid by counter demands on Fenn himself, that there would not be sufficient money to pay the commissions. Thompson therefore refused to accept the office of assignee unless Fenn paid him a 'bonus,' which Fenn paid him, accordingly, in the shape of three county bonds for $1000 each, and worth actually about $2300. This sum was apparently meant to be on account of commissions.

The Circuit Court for the Northern District of Illinois (in which the bill was filed) dismissed it. Appeal.

Mr. E. S. Smith, for the appellants:

The giving of the bonds to Robbins, vitiated the assignment.

A debtor cannot fix compensation for an assignee, much less can he pay a large sum in advance for labor to be performed. If the debtor could do this, he might as well give to the assignee discretionary power which he could exercise against the will of the creditors.

In Nichols v. McEwen, the assignment provided for the payment of a counsel fee to the assignee, who was a lawyer, over and above the expenses of the commission for executing the trust. The assignment was held void for that provision. Our case is stronger than that one. There the provision was made upon the face of the assignment and was open for the creditors to know what the provision was. Here nothing appeared until the parties were compelled to answer and testify.

Mr. Van Armam, contra.

Mr. Justice NELSON delivered the opinion of the court.