Name: Merillat v. Hensey — Opinion of the Court
Author: Horace Harmon Lurton

Quotes from Merillat v. Hensey — Opinion of the Court (Horace Harmon Lurton)

Horace Harmon Lurton, Merillat v. Hensey — Opinion of the Court

“ Thus, a mere deed of gift which actually deprives existing creditors of property which was subject to their claims, or a transfer of property grossly disproportioned to a debt secured under a conveyance apparently absolute, but subject to a secret agreement that the surplus should be held for the assignor, could not be saved, for the necessary legal effect would be to hinder, delay, or defraud creditors, and the law could but assign to such conveyance the intent which must indubitably appear from the facts. ”

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Source: Wikisource

Horace Harmon Lurton, Merillat v. Hensey — Opinion of the Court

“ Hollister, 4 N. Y. 211, held that the principle did not apply to assignments in good faith 'of a part of a debtor's property to creditors themselves, for the purpose of securing particular demands.' 'The conveyance,' said the New York court, 'whatever may be its form, is in effect a mortgage of the property transferred. A trust as to the surplus results from the nature of the security, and is not the object, or one of the objects, of the assignment. ”

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Source: Wikisource

Horace Harmon Lurton, Merillat v. Hensey — Opinion of the Court

“ That the mere reservation of a balance under an assignment to pay debts, one or many, is enough, as matter of law, to make the transaction void, whether the reservation be in or out of the instrument, has not been generally accepted. ”

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Source: Wikisource

Horace Harmon Lurton, Merillat v. Hensey — Opinion of the Court

“ After paying the attorneys' fees and court costs, the surplus is not enough to pay the debt secured in full.
In view, therefore, of the concurrence of both courts in finding that no actual fraud was intended, we shall pass at once to the question of constructive fraud.
Fraud in law is predicated upon the fact that the assignor took from the assignees the agreement above set out, and did not file it with the clerk of the court, as he did the assignment itself. ”

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Source: Wikisource

Horace Harmon Lurton, Merillat v. Hensey — Opinion of the Court

“ Justice Brown, for the court, after saying that the agreement to account to the assignor for any surplus was no more than the law would have implied, said:
'Whatever may be the rule with regard to general assignments for the benefit of creditors, there can be no doubt that, in cases of chattel mortgages (and the instrument in question, by whatever name it may be called, is in reality a chattel mortgage) , the reservation of a surplus to the mortgagor is only an expression of what the law would imply without a reservation, and is no evidence of a fraudulent intent. ”

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Source: Wikisource

Horace Harmon Lurton, Merillat v. Hensey — Opinion of the Court

“ Whether expressed in the instrument or left to implication is immaterial. The assignee does not acquire the legal and equitable interest in the property conveyed, subject to the trust, but a specific lien upon it. ”

Horace Harmon Lurton

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Quotes from Merillat v. Hensey — Opinion of the Court (Horace Harmon Lurton)

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Horace Harmon Lurton

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Quotes from Merillat v. Hensey — Opinion of the Court (Horace Harmon Lurton)

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