
    ARCHER vs. FULLER.
    An assignment of stock made directly to a creditor is not void be* •cause not recorded.
    A transfer of stock, either as an absolute payment of a debt, or as ■a collateral security, is valid as against creditors of tbe debtor.
    Error to Common Pleas No. 4 of Philadelphia County. Nos. 102 and 103, January, 1883.
    This case arose upon an attachment execution. The facts of the case are set forth in the charge of the Court, which was as follows, per:
    Thayer, P. J.
    “What is contended for here is the ownership of thirteen hundred shares of stock in the Algonquin Company, that being a Montana mining company. Dr. James Fuller was thé owner of the stock. It stood in his name on the books of the company. He was one of the original projectors of the company, and at one time owned a large amount of its stock. It is now claimed by Mrs. Fuller, the lady'who was formerly his wife, but who subsequently obtained a divorce from him. It appears that they did not agree, and there was a separation, which culminated in a divorce. Mrs. Fuller claims the stock under an assignment of the stock made to her on May 8, 1879, on the books of the company. The plaintiff, on the contrary, Mr. Alfred M. Fuller, who is a brother of Dr. Fuller, claims that the assignment on the books of the company was fraudulent and void, and consequently he could attach it, and that it was attached. The question here is, does this stock belong to Mrs. Fuller, or is it subject to the plaintiff’s attachment. If the assignment to Mrs. Fuller is valid, then her title is perfect, because it preceded the attachment by six months. If the assignment to her is good the attachment has no binding effect, and your verdict should be for the garnishees. That the assignment was made to her is not a matter of doubt. It appears on the books of the company, and is otherwise abundantly proved. The question is, was that assignment good, and perhaps the best way to test that is to consider the objections to it. The plaintiff impeaches it on several grounds.
    “1. He impeaches it on the ground that it was a fraud in fact; that Dr. Fuller put the stock in Mrs. Fuller’s name in order to defeat his creditors and prevent attachments.
    
      “2. It is impeached because it is said that if the assignment was not a fraud in fact, that it was a fraud in law. That it was an assignment for the benefit of creditors, and not being recorded as required by the act of assembly of March 24, 1818, is void.
    “3. It is impeached because it reserved a benefit to the assignor, that benefit being that he was to have the surplus remaining after the payment of Mrs. Fuller’s indebtedness and that of her brother, R. D. Beatty.
    “These are the three grounds. Now, the contention on the part of the plaintiff is that'before the assignment was made Dr. Fuller, in a conversation with Mr. Williams, the secretary of the Algonquin Company, gave him to understand that he wished to put his stock out of his name in such manner that, while he could control it, it would not be subject to attachment. Mr. Stiles, the president of the company, also testifies the same, that Dr. Fuller asked him if he could put the stock out of his name and still control it. Now, this is the substance of the testimony of the plaintiff, as to the declaration of Dr. Fuller, which is relied on to show a fraudulent intent. On the other hand, Mrs. Fuller testified that when.she married Dr. Fuller she had a fortune of her own, which she had inherited; that she had given him entire control over her estate, and that he had spent it. The power of attorney has been put in evidence. She also testifies that he was indebted to her in at least $30,000; that she had importuned him before to give her this stock to secure her debt, and that he had finally agreed to do so. I may say that a great deal of testimony has been given to show the control of her husband over her estate, by depositions that have been read to you of the people in Pittsburg. Mrs. Fuller says that he agreed to give her the stock, but that when he gave her the certificate she noticed it had in it the word trustee, the assignment being to Belle C. Fuller, trustee. She objected to that. I am speaking of the testimony of. Mrs. Fuller. She said she wanted the stock absolutely, to which Dr. Fuller replied that he had put it in that way to prevent her sacrificing it, that it would reach $50, and; that there would be enough to pay her debt, her brother’s debt, and leave a surplus for him. That is where the word surplus occurred. She says, being unable to do no other thing she took it with' the word ‘trustee’ in it. When he made that reply she took the certificate as it was. In this account of what occurred she has been fully corroborated by Mrs. Beatty, the widow of her brother.
    “What, then, was Dr. Fuller’s intention in this matter? What was the motive? The only inference to be drawn from the testimony of Mr. Stiles and Mr. Williams, if he meant what he said to them, was that he wished to hold the stock, so that, while it should not be in his name, it would be under his-control.- What was his motive in doing that? You will remember that at this time he was not living with his wife. Now, if he proposed to pass the stock over to a person, who .should have the legal title with the control incident to that, would he have been likely to select his wife for that purpose, ■considering the relations they then bore to each other, or would he not have selected someone else? This proposition requires me to submit another. Would a man who wanted to put stock out of his own name, that is in the name of another person, and still to retain the control of it, be likely to select a person for that purpose with whom his relations were not pleasant ? Or did he, on the other hand, make this assignment to her because he considered it but an act of justice to do so, as he had wasted her fortune? And did he say what he said to the officers of the company to blind them ? Did he wish to lead them to the belief that he was still to be the owner of the stock? Or did he wish to keep from them the real relations which then existed between him and Mrs. Fuller? Did he intend to make Mrs. Fuller believe she was to get the stock, and did he intend to make the transfer abortive by declaring, in the presence of witnesses, that it was made for a fraudulent purpose, namely, to keep off creditors. These are all questions to be considered to ascertain if it was done to defraud creditors or for some other purpose. [Now, if it was made to defraud creditors, and if that was his motive, the assignment would be void if Mrs. Fuller was privy to that intention; it would not be void if she was not privy to such motive.] If she was ignorant of that intention and prevailed .•on him to give it to her as security for his indebtedness to her, she is not to be affected by his declaration of any motive .hostile to herself, because, if the assignment was made to her for a valuable consideration, the assignment was valid.
    “He was largely indebted to her. That has not been controverted. It has been sufficiently shown, so far as my judgment goes, but that is for you. If she was acting in good faith, without knowledge on her part of his intention to put this stock beyond the control of his creditors, she would not be prejudiced, though that might have been his object.
    “[She is a bona fide holder for a valuable consideration, and is not to be prejudiced by his communication to other persons without her knowledge.] It is further objected that it was an assignment for the benefit of creditors. That at least two creditors were to be benefited, namely, Mrs. Fuller herself, and her brother, Mr. Beatty, and as the assignment was not recorded it is void. This is a legal objection. What was the real character of this assignment?
    “Now you will observe that there is no trust declared in the paper itself. There is not a word explanatory of any ■trust; it does not say for whose use the assignment was made. [If the object of the transfer was to give it to her out and out, then it was not a trust, though the word trustee was-on the paper.
    “Then she was a transferree of the stock and was the-owner.] But it is said the conversation with Mrs. Fuller and Mrs. Beatty shows a trust. That conversation was as follows: Mrs. Fuller said, 'I do not want the word trustee-in ; I want it absolutely. What does the word trustee, mean ?’ Dr. Fuller said, ‘It is simply placed there to prevent you from sacrificing the stock. The stock is valuable and will reach $50; it will be ample to cover your indebtedness and your brother’s, and leave a balance for me.’
    “It is alleged that this was an assignment for the benefit of creditors and required to be recorded, and so indeed it is, if it was an assignment to her absolutely as trustee for herself and for her brother, Mr. Beatty, and for her husband. If she was a trustee for herself, and her brother and her husband, then it is void as an unrecorded assignment for the benefit of creditors. But that is not so unless it was an absolute transfer to her as trustee. [If it was a transfer to her as a mere security, even though she was a trustee, it is not void, as it was-not absolute.] A transfer as a mere security is not void because it is for the benefit of creditors. An assignment as collateral is not required to be recorded. You are to determine that question. It is important, then, for you to look at this conversation. Dr. Fuller said that he put in the word trustee £to prevent her from sacrificing this stock.’ Would he have been likely to have said that if he intended the assignment to be out and out ? Is it not a fair inference that he did not intend to give it to her out and out, but as a security for a debt ? Why else should he say ‘I did it to prevent you from sacrificing it?’ Surely that was to prevent her from controlling it, for that was the only way to prevent her from sacrificing it. If it was transferred as collateral, she could not sell it until she had given him notice of her intention to do so. She might have notified him to pay the debt. But she could not sell it without notice to him. Now, did he intend it as security, or did he intend it as an absolute assignment ?
    
      “Thirdly. — It is objected that treating this as an assignment for the benefit of creditors it was void because the assignment stipulated for a benefit to the assignor. This being, it is said, a part of the alleged trust which grew out of the conversation between Dr. Fuller and Mrs. Fuller.
    “Well, gentlemen, it is undoubtedly a rule of law that if in an assignment for the benefit of creditors, the assignor reserves a benefit to himself, the assignment is void, as being intended to hinder and delay creditors; but, then, [it is also the law, and well settled in this State, that a transfer to a creditor for a debt, with a stipulation in it that he will return the surplus, if any, to the debtor, is not void, provided the property transferred is not disproportioned to the debt due.”]
    The jury rendered a verdict in favor of the garnishees. The attaching creditors then took writs of error, complaining of the portions of the Judge’s charge in brackets.
    
      T. F. Jenkins, Esq., for plaintiff in error,
    cited Connelly vs. Walker, 45 Pa., 449, and argued that Mrs. Fuller is not a holder for value; Kirkpatrick vs. Muirhead, 16 Pa., 117. An assignment upon a secret trust, by which the assignor is to receive a benefit, is fraudulent and void as to creditors; Passmore vs. Eldridge, 12 S. & R., 198; McCulloch vs. Hutchinson, 7 Watts, 434; Connelly vs. Walker, 45 Pa., 449. An unrecorded assignment for benefit of creditors is void, Act March 24, 1818, 7 Sm Laws, 132. Pie also cited Shaffer vs. Watkins, 7 W. & S., 219; Bentz vs. Rockey, 69 Pa., 71; Heart vs McFarland, 13 Pa., 182; McClurg vs. Lecky, 3 P. & W., 83; Stockton vs. Wilson, 3 P. & W., 129; Weber vs. Samuel, 7 Pa. 499; Philson vs. Barnes, 50 Pa., 230; Lucas vs. Sunbury & E. R. R., 32 Pa., 458; Bittenbender vs. Sunbury & E. R. R. 40 Pa, 269; Dreisbach vs. Becker, 34 Pa., 152; Kern vs. Powell, 10 W. N. C., 547.
   The Supreme Court affirmed the judgments of the Common Pleas on February 12, 1883 in the following opinion:

Per Curiam.

The assignments having been made directly to the creditor, the statutory requirements in regard to recording voluntary assignments do not apply. The existence of any fraud to invalidate the transfer was purely a question of fact. The husband and wife were living separately. He was indebted to her. Either as an absolute payment, or as collateral payment of the indebtedness, she took this transfer, and as the jury have found, in good faith. The Court submitted the whole ease in a full, clear and entirely satisfactory charge. We discover no error therein.

Judgment affirmed in each case.  