
    *John Floyd & Co. v. Christian Smith.
    Where a debtor, in contemplation of insolvency, makes an assignment of property in trust to trustees, with the design to prefer one or more creditors to the exclusion of others, such assignment, whether fraudulent or bona fide, by virtue of the act of March li, 1853, “ declaring the effect of assignments to trustees in contemplation of insolvency,” is operative to pass title to the assignee, is not void, and can not rightfully be so treated by creditors not embraced within its provisions.
    ■ In error to the district court of Holmes county.
    On the 17th day of February, 1855, Christian Smith filed his petition, in the court of common pleas of Holmes county, against Elyzur J. Loveland, stating that on the 14th of February, 1855, said Loveland had, without leave, wrongfully taken certain of his goods, wares, and merchandise, particularly described, to his damage, for which he asked judgment.
    At the March term, 1855, of the court of common pleas, the court ordered John Floyd & Co. to be fiiade defendants instead of said Loveland.
    May 7, 1855, Floyd & Co. answered, not denying that said Love-land took the property described in the petition, but denied that it was the property of Christian Smith, and that it was taken as such, but averred that it was taken as the property of George F. Smith, by said Loveland, as the sheriff of Holmes county, on a writ issued out of the court of common pleas of said county, in a case pending therein, wherein said John Floyd & Co. were plaintiffs, and said George F. Smith was defendant.
    The case came into the district court by appeal, and was there tried at the June term, 1855, and resulted in a verdict for the plaintiff, Christian Smith. Thereupon said Floyd & Co. moved the court to set aside the verdict, and for a new trial, on the ground that the verdict was against the weight of the evidence and contrary to law, which ^motion was overruled and judgment entered, and bills of exceptions were taken.
    It appears from a bill of exceptions that the following was all the evidence given on the trial:
    The plaintiff, to maintain the issue on his part, gave in evidence a certain agreement in writing, which reads as follows:
    
      “ This article of agreement made between George E. Smith and Christian Smith, witnesseth, that the said Christian Smith agrees to pay the debts for which he is the bail and surety of the said George E. Smith, to wit, a note of Adam Lane for four hundred dollars with the interest, two notes to John Woods for about four hundred dollars, one note to George P. Smith & Co. for two hundred dollars, one to same for two hundred and fifty dollars, one to same for two hundred and seventy-five dollars, one note to James P. Tanner for two hundred and eighty-five dollars, one to Babcock & Co. for one hundred dollars. And the said George E. Smith hereby sells and conveys to the said Christian Smith all the book, book-accounts, claims, notes, and demands coming to him, and also the goods, wares, and merchandise belonging to the said George F. Smith, in or at his store at Winesburg, Holmes county, and also a gray horse, a two-horse wagon; and the said George E. Smith is also to execute a mortgage on his real estate to secure any balance that may be due, if the said book-accounts, goods, etc., aforesaid, be insufficient to pay the amount for which said C. Smith is bail, and which he hereby agrees to pay as aforesaid; and the said goods and merchandise is to be inventoried at cost, and also the claims in said books, notes, ote., and if there shall be more realized from the same th&m what the said C. Smith hereby binds himself to pay, he is to pay the balance to George E. Smith, first deducting enough to pay reasonable costs and expenses.
    (Signed,) “George E. Smith,
    “ February 14, 1855. C. Smith.”
    ^Christian Smith, the plaintiff, was a witness on the trial, and from his cross-examination it was made to appear that the goods, wares, and merchandise transferred to him under the foregoing agreement, were estimated to be worth, at first cost, the sum of twenty-five hundred dollars, and that the good claims assigned to him as aforesaid, were of the value of five hundred dollars, and that the doubtful claims so assigned amounted to eleven hundred dollars; and that said George E. Smith and wife, on the 16th of February, 1855, executed and delivered to said Christian Smith a mortgage on lands particularly described, duly acknowledged, and conditioned according to said agreement, and which mortgage was offered in evidence on the trial. The consideration mentioned in the mortgage was nineteen hundred and twenty-five dollars. It was also proved that the mortgaged-premises had cost said George E. Smith at least thirty-five hundred dollars, and that when the mortgage was made, said premises were worth about two thousand dollars. It further appeared that the property covered by the assignment copied above, and tbe mortgage, constituted all the property said George F. Smith owned, except certain household goods exempt from execution, and that the mortgaged premises had no other incumbrance upon them at the time, except a certain mortgage to George F. Smith’s father-in-law, for between nine and ten L andred dollars; that the plaintiff, Christian Smith, was the father of said George F. Smith, and that he had taken all the property mentioned in the assignment and mortgage as security and indemnity for the amount of the “ notes mentioned in said written agreement for the payment of which he, the plaintiff, was liable as aforesaid, as security for said George F. Smith.”
    It was further in evidence that, on the 13th of February, 1855, William Floyd, one of the defendants below, was at Winesburg, where George F. Smith kept his store, endeavoring to get him to pay, or secure to be paid, the claim, which the defendants below then held against him, amounting *to three hundred and seventy-seven dollars and fifty-seven cents, and on which the writ of attachment upon which the goods sued for was issued) on February 14, 1855, being the same- day on which the written agreement copied above was made, and that when the writ of attachment was levied by said Loveland, then sheriff of Holmes county, on said 14th February, 1855, not more than some four or five hundred' dollars’ worth had been invoiced between the two Smiths.
    It was further in evidence that when said Floyd went to Wines-burg, where the Smiths, father and son, lived, to see about his claim against tbe son, George F. Smith, the latter told Floyd that he would try and get his father to go his security, and wont to see his father for that purpose. When he asked his father, he replied that he had already gone his security to a large amount, and insisted on George F. Smith securing him, which he agreed to do; and that the arrangement was committed to writing on the next morning; “ and that said C. Smith gave as a reason for taking as much as was included, by saying that he could not know what it was worth. And O. Smith testified that he was liable for George to the amount of nineteen hundred and seventy-five dollars at .the time of said sale.”
    The defendants, to maintain the issue on their part, proved by Síád Loveland, then sheriff, that on the 14th of February, 1855, when ho executed said writ of attachment, he did not seize upon, nor take by virtue of said writ, any of the goods and merchandise which had been inventoried as aforesaid, but other goods and merchandise, then in the storehouse of said George E. Smith, not inventoried by the said Smiths.
    It further appeared that, at the time George F. Smith transferred the property to his father, the plaintiff below, said George F. Smith was insolvent.
    Prom a bill of exceptions taken at the .trial, to the rulings of the court, it appears that at the close of the evidence counsel for Floyd & Co. asked the court to ^instruct the jury that the reservation by the son, in the sale and transfer of his property to his father, rendered such sale or transfer void. The court refused to give such instruction, but instructed the jury that if the sale or transfer of the goods was made to Christian Smith, the plaintiff below, in trust to the use of the grantor, the said George F. Smith, the sale or transfer would thereupon be void. But the court further expressed to the jury their opinion that the article of agreement, proven in the case, did not show a ease of conveyance of goods made in trust for the use of the persons making the same, under the first section of the statute of frauds.
    The court further said to the jury, that if the conveyance of the goods was made or obtained to defraud the creditors of the said George F. Smith of their just and lawful debts or damages, then the sale or transfer would be void, although it might appear that the plaintiff (below) had a just claim which he also attempted thereby to secure.
    To which refusal to instruct as requested, and to the instruction given, the counsel for the defendants below excepted, and now assign the same for error, as well as the action of the court in overruling their motion for a new trial,
    
      Hoaglcmd & Reed, for plaintiffs in error.
    
      Barcroft & Vorhees, for defendant in error.
   Brinkerhoff, C. J.

This being an action in the nature of an action of trespass for unlawfully taking and converting property claimed by the plaintiff below under the assignment set forth in the bill of exceptions, the defendants below were under the necessity of claiming and maintaining that said assignment was utterly void and of no effect, and passed to the assignee, as against other creditors, no title whatsoever; and hence they asked the court to ■ charge the-jury, that “the reservation by the son, *in the sale or transfer of the property to his father,” of the surplus remaining after the payment of the debts for which the father was bound as surety, “ rendered the sale or transfer void.” This'charge the court below refused to give, thereby, as well as subséquently in express terms, holding that the assignment was not, on its face, and as a matter of law, fraudulent and void. In thus holding, did the court below err ? And if it did, what is the effect of the error on the case before us ?

In the case of Hoffman, Burneston & Co. v. Mackall et al., 5 Ohio St. 134, 135, the judge delivering the opinion of the court, introduces, with seeming approval, the doctrine laid down in Goodrich v. Downs, 6 Hill, 438, and Barney v. Griffin, 2 Comst. 365, “ that there are certain provisions in the terms of an assignment or deed of trust, made in contemplation of insolvency, which are per se fraudulent ; ” and that, among these, is “ the reservation of the surplus after paying certain specified debts, leaving other debts unpaid.” This opinion, as is evident from the note appended to it, was drawn up in vacation, more than a year after the case had been considered by the court; the doctrine thus seemingly approved was not necessary to a determination of the case, and the correctness of which may be subject to serious.question.

These remarks will apply also, to some extent, to the observations of the judge delivering the opinion of the court in Dickson et al v. Rawson, 5 Ohio St. 224. As it seems to us that, while our statutes “ declaring the effect of assignments to trustees, in contemplation of insolvency;” continue in force, there can be no case in which the doctrine of these New York cases can possibly apply, why should its correctness be either discussed or determined by this court? It will be time enough to do either, when occasion for its application shall arise.

This reservation of the surplus remaining after the payment of the debts secured by the terms of the assignment, is obviously nothing more than a stipulation for the performance *of a duty, which the law would recognize and enforce without such stipulation; and how it can become a conclusive badge of fraud, is, on principle, difficult to perceive; and the doctrine of these New York cases seems to me to rest on a somewhat forced application of the letter of the statute of frauds, in mistake or disregard of their proper object and intent.

A part of the doctrine of these New York cases, and essential to their consistency with themselves, is that a reservation by the assignor to himself of the surplus after the payment of debts less than his whole indebtedness, constitutes it an assignment in trust for the benefit of the assignor, within the statute of frauds. Now, granting for the sake of the argument the doctrine of these New York cases to their full extent, what then ? It follows, to be sure, that the court below may have erred in its refusal to charge the jury, as requested by the defendants below ; but then it also follows, that this assignment comes within the provisions of the act of March 14, 1853, !< declaring the effect of assignments to trustees in contemplation of insolvency,” and which is as follows (3 Curwen, 2239):

“ That all assignments of property in trust; which shall be made by debtors to trustees in contemplation of insolvency, with the design to prefer one or more creditors to the exclusion of others, shall be held to inure to the benefit of all the creditors, in proportion to their respective demands ; and such trusts shall be subject to the control of the courts, which may require security of the trustees for the faithful execution of the trusts, or remove them and appoint others, as justice may require.”

' That this assignment was made ip contemplation of insolvency, is clear from all the testimony in the case; that it was made to prefer a creditor, to wit, the assignee, is apparent from the instrument of assignment itself; and if, as held in the New York cases before cited, the reservation of the surplus after the preferred debts are paid, is ^conclusive as to its being a trust to the use of the

assignor, under the statute of frauds, then every requisite necessary to bring the assignment within the statute of 1853 is supplied. The language of this act is, “ all assignments,” etc.; and whether they are fraudulent or bona fide, so that they otherwise come within the purview of the act, makes no difference. This statute avoids nothing. It simply takes up the class of assignments embraced within its provisions, makes them binding and operative, so far as to pass title to the assignee, whether they be fraudulent- or not, and causes them to inure “to the benefit of all the creditors, in proportion to their respective demands.” It, in effect, supersedes and, by implication, repeals the statute of frauds pro tanto. And so our courts have held. Harshman v. Lowe, 9 Ohio, 92. On this supposition, it follows, therefore, that, if the court below erred in refusing to charge the jury as requested, it was an error which could not operate to the prejudice of the defendants below; for if the assignment was within the operation of the act above quoted, it inured “to the benefit of all the creditors,” and could not be by the defendants below rightfully treated, aS they claimed to treat it, as null and void. In short, if the assignment was fraudulent per se, in virtue of provisions apparent on its face, it came within the operation of the act of 1853, which, so far from avoiding it, gave it validity for its own purposes and policy; if not fraudulent per se, there was no error in the charge, or refusal to charge on this branch of the case.

As to the question of fraud in fact — whether the assignments was made or received with the intent to defraud creditors, or not — that question, so far as appears from the bill of exceptions, was fairly enough left to the jury; and it seems to us that there was not such a want of evidence to support the verdict as would authorize us to set it aside.

It may be said that the court ought to have told the jury that, in inquiring into the question of intent, they were at liberty to look into the terms and provisions of *the assignment itself, as well as all the other circumstances of the case. To this it seems to me sufficient to reply: 1. No request appears to have been made to the court thus to charge; and,( 2. The bill of exceptions does not purport to set out the whole, or general charge of the court, but such portions only as counsel thought proper to except to; and non constat, from aught that appears in the bill of exceptions, but that all proper observations on this subject were made by the court. Error must be made apparent on the record; it will not bo presumed.

Judgment affirmed.

Scott, Stjtliff, Peck, and Gholson, JJ., concurred.  