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3441. A creditor can avoid the act or obligation of his debtor for fraud only where the fraud obstructs the enforcement, by legal process, of his right to take the property affected by the transfer or obJigation.

3442. In all cases arising under section twelve hundred and twenty-seven, or under the provisions of this title, except as otherwise provided in section thirty-four hundred and forty, the question of fraudulent intent is one of fact and not of law; nor can any transfer or charge be adjudged fraudulent solely on the ground that it was not made for a valuable consideration; provided, however, that any transfer or encumbrance of property made or given voluntarily, or without a valuable consideration, by a party while insolvent or in contemplation of insolvency, shall be fraudulent, and void as to existing creditors. 1895—154.

TITLE III.

Assignments for the Benefit of Creditors.

Section

Section 3449. When debtor may execute 3464. Same. assignment.

3465. Assignment, when void. 3450. Insolvency, what.

3466. Assignment of real prop3451. Certain transfers not af.

erty. fected.

3467. Bond of assignees. 3452. What debts may be secured. 3468. Conditions of disposal, con3457. Assignment, when void.

.version. 3458. Assignment, how made. 3469. Accounting of assignee. 3459. Compliance last section 3470. Property exempt. necessary.

3471. Compensation. 3460. Assignee take subject third 3472. Assignees protected, acts party's rights.

good faith. 3461. Inventory required.

3473. Creditors' assent necessary 3462. Verification of inventory.

to 'modification. 3463. Recording and filing in

ventory.

3449. An insolvent debtor may in good faith execute an assignment of property in trust for the satisfaction of his creditors, in conformity to the provisions of this chapter; subject, however, to the provisions of this code relative to trusts and fraudulent transfers, and to the restrictions imposed by law upon assignments by special partnerships, by corporations, or by other specific classes or persons. Every such assignment shall contain a list of the names of the creditors of the assignor, and their places of residence and amounts of their respective demands, and the amounts and nature of any security therefore, and shall, subject to the other provisions of this section, be made to the sheriff of the county, or city and county, wherein the assignor resides, if the assignor resides within this state; or in case the assignor resides out of this state, then to the sheriff of the county, or city and county, wherein the property assigned, or some of it, is situated; but when the assignor resides out of the state, an assignment made as herein provided may, by its terms, transfer any property of the assignor in this state. The sheriff shall forthwith take possession of all the property so assigned to him, and keep the same till delivered by him, as hereinafter provided. When the assignment has been made, as herein provided, the sheriff shall immediately, by mail, notify the creditors named in the assignment, at their places of residence as given therein, to meet at his office on a day and hour to be appointed by him, of not less than eight or more than ten days from the date of the delivery of the assignment to him, for the purpose of electing one or more assignees, as they may determine, in the place and stead of the said sheriff in the premises, and shall also publish a notice of such meeting, and the purpose thereof, at least once before such meeting, in some newspaper published in his county, or city and county. The notice so to be mailed shall also contain a statement of the amount of the demand of the creditor, and the amount and nature of any security therefor, as set forth in the assignment; and if any creditor shall not find the amount of his claim to be correctly so stated, he may file with said sheriff, at or before such meeting, a statement, under oath, of his demand, and such statement shall, for the purpose of voting as hereinafter provided, be accepted by said sheriff as correct; and when no such statement is filed, the statement of amount as set forth in the assignment shall be accepted by the sheriff as correct. No creditor having a mortgage or pledge of real or personal property of the debtor, or lien thereon, for securing the payment of a debt owing to him from the debtor, shall be allowed to vote any part of his claim at such meeting of creditors, unless he shall have first conveyed, released, or delivered up his said security to said sheriff, for the benefit of all creditors of said assignor. At such meeting the sheriff shall preside, and a majority in amount of demands present or represented by proxy shall control all questions and decisions. The creditors may adjourn such meeting from time to time, and may vote on all questions either in person or by proxy signed and acknowledged before any officer authorized to take acknowledgments, and filed with the sheriff. At such a meeting. or any adjournment thereof, the creditors may elect one or more assignees from their own number, in the place and stead of the sheriff, and the person or persons so elected shall afterwards be the assignee or assignees under the provisions of this title; and the sheriff, by transfer in writing, acknowledged as required by section three thousand four hundred and fifty-eight, shall at once assign to such elected or assignees, upon the trusts in this title provided, all the property so assigned to him, and deliver possession thereof. All recitals in such assignment by said sheriff of notices of such meeting, and the holding thereof, and the due election of such assignee or assignees, shall be prima facie proof of the facts recited. The sheriff shall, before the delivery of such assignment, be paid the expenses incurred by him, and fees in such amount as would by law be collectible if the property assigned had been levied upon and safely kept under attachment. Thereupon, and after the record of such last-named assignment, as in this title provided, such elected assignee or assignees shall take, and hold, and dispose of all such property and its proceeds, upon the trusts and conditions and for the purposes in this title provided. 1895–82.

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3450. A debtor is insolvent, within the meaning of this title, when he is unable to pay his debts from his own means, as they become due.

3451. The provisions of this title do not prevent a person residing in another state or country from making there, in good faith, and without intent to evade the laws of this state, a transfer of property situated within it; but such person cannot make a general assignment of property situated in this state for the satisfaction of all his creditors, except as in this title provided; nor do the provisions of this title affect the power of a person, although insolvent and hal

of a person, although insolvent, and whether

residing within or without this state, to transfer property in this state, in good faith to a particular creditor, or creditors, or to some other person or persons in trust for such particular creditor or creditors, for the purpose of paying or securing the whole or part of a debt owing to such creditor or creditors, whether in his or their own right or otherwise. 1905—622.

3452. An assignment for the benefit of creditors may provide for any subsisting liability of the assignor which he might lawfully pay, whether absolute or contingent.

3457. An assignment for the benefit of creditors is void against any creditor of the assignor not assenting thereto, in the following cases:

First. If it give a preference of one debt or class of debts over another.

Second. If it tend to coerce any creditor to release or compromise his demand.

Third. If it provide for the payment of any claim known to the assignor to be false or fraudulent; or for the payment of more upon any claim than is known to be justly due from the assignor.

Fourth. If it reserve any interest in the assigned property, or in any part thereof, to the assignor, or for his benefit, before all his existing debts are paid.

Fifth. If it confer upon the assignee any power which, if exercised, might prevent or delay the immediate conversion of the assigned

property to the purposes of the trust. · Sixth. If it exempt him from liability for neglect of duty or misconduct. 1873–267.

3458. An assignment for the benefit of creditors must be in writing, subscribed by the assignor, or by his agent thereto authorized in writing, and the transfer by the sheriff must also be in writing, subscribed by the sheriff in his official capacity. Both such assignment and such transfer must be acknowledged, or proved and certified, in the mode prescribed by the chapter on recording transfers of real property, and be recorded as required by sections thirty-four hundred and sixty-three and thirty-four hundred and sixty-four; but recording in one county constitutes a compliance with the following section. 1889--82.

3459. Unless the provisions of the last section are complied with, an assignment for the benefit of creditors is void against every creditor of the assignor not assenting thereto.

3460. An assignee for the benefit of creditors is not to be regarded as a purchaser for value, and has no greater rights than his assignor had, in respect to things in action transferred by the assignment.

3461. Within twenty days after an assignment is made for the benefit of creditors, the assignor must make and file, in the manner prescribed by section three thousand four hundred and sixty-three, a full and true inventory, showing:

1. All the creditors of the assignor;

2. The place of residence of each creditor, if known to the assignor; or if not known, that fact must be stated;

3. The sum owing to each creditor and the nature of each debt. or liability, whether arising on written security, account, or otherwise;

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4. The true consideration of the liability in each case, and the place where it arose;

5. Every existing judgment, mortgage, or other security for the payment of any debt or liability of the assignor; Pax * m Ď. All property of

wing the assignor at the date of the assignment. which is exempt by law from execution; and,

7. All of the assignor's property at the date of the assignment, both real and personal, of every kind, not so exempt, and the encumbrances existing thereon, and all vouchers and securities relating thereto, and the value of such property according to the best knowledge of the assignor.

3462. An affidavit must be made by every assignor executing an assignment for the benefit of creditors, to be annexed to and filed with the inventory mentioned in the last section, to the effect that the same is in all respects just and true according to the best of such assignor's knowledge and belief. If the assignor neglects or refuses to make and file such inventory and affidavit within said twenty days, the assignment shall not, for that reason, be affected in any way, but in that event the assignee or assignees elected by the creditors shall within twenty days thereafter make and file in the office of the county recorder where the assignment is first recorded, a verified inventory of all assets received by them; and such assignee or assignees may at any time, or from time to time, after the transfer to them by the sheriff, by petition to the superior court of the county or city and county where the assignment is first recorded, cause the assignor, by order or citation to appear before said court, or a commissioner or referee to be appointed by it, at a time and place within the county, or city and county, to be designated in the order or citation, to be examined touching the matters mentioned in section three thousand four hundred and sixty-one, and any other matters relative to the assignment, and to have with him all books of account, vouchers, and papers relating to the assigned property; and such court may by its order require the surrender to such assignee or assignees of such books, vouchers, and papers, to be by them retained until their trust is fully completed and performed. 1889–82.

3463. An assignment for the benefit of creditors must be recorded, and the inventory required by section three thousand four hundred and sixty-one filed with the county recorder of the county in which the assignor resided at the date of the assignment; or, if he did not then reside in this state, with the recorder of the county in which his principal place of business was then situated; or, if he had not then a residence or place of business in this state, with the recorder of the county in which the principal part of the assigned property was then situated.

3464. If an assignment for the benefit of creditors is executed by more than one assignor, it may be recorded, and a copy of the inventory required by section three thousand four hundred and sixtyone may be filed with the recorder of the county in which any of the assignors resided at its date, or in which any of them, not then residing in this state, had then a place of business.

3465. An assignment for the benefit of creditors is void against creditors of the assignor and against purchasers and encumbrancers in good faith and for value unless it is recorded as provided in this title, and unless either the inventory required by section three thousand four hundred and sixty-one, or the inventory required of the assignee or asignees by section three thousand four hundred and sixty-two is filed in the manner provided in this title and within the time designated. 1889—83.

3466. Where an assignment for the benefit of creditors embraces real property, it is subject to the provisions of article four of the chapter on recording transfers, as well as to those of this title.

3467. No bond shall be given by the sheriff, but he shall be liable on his official bond for the care and custody of the property while in his possession. Within forty days after date of the transfer by the sheriff, the assignee must enter into a bond to the people of this state in such amount as may be fixed by a judge of the superior court of the county, or city and county, in which an inventory in accordance with the provisions of this title is filed with sufficient sureties to be approved by such judge and conditioned for the faithful discharge of the trust and the due accounting for all moneys received by the assignee, which bond must be filed in the same office with the inventory; and any assignee failing to comply with the provisions of this section may be removed by the above-named superior court on petition of the assignor or any creditor, and his successor appointed by such court. 1889--83.

3468. Until a verified inventory has been made and filed, either by the assignor or assignee, as required by the provisions of this title, and the assignee has given the bond required by the last section, such assignee has no authority to dispose of the property of the estate, or any part of it (except in the case of perishable property. which in his discretion he may dispose of at any time, and receive the proceeds of sale thereof); nor has he power to convert the property, or the proceeds of any sale of perishable property, to the purposes of the trust. Within ten days after the filing of his bond, the assignee must commence the publication (and such publication shall continue at least once a week for four weeks), in some newspaper published in the county, or city and county, where the inventory is filed, of a notice to creditors of the assignor, stating the fact and date of the assignment, and requiring all persons having claims against the assignor to exhibit them, with the necessary vouchers, and verified by the oath of the creditor, to the assignee, at his place of residence or business, to be specified in the

and he shall also, within ten days after the first publication of said notice, mail a copy of such notice to each creditor whose name is given in the instrument of assignment, at the address therein given. After such notice is given, a copy thereof, with affidavit of due publication and mailing, must be filed with the county recorder with whom the inventory has been filed, which affidavit shall be prima facie evidence of the facts stated therein. At any time, or from time to time, after the expiration of thirty days from the first publication of said notice (provided, the same shall also have been mailed as in this section provided), the assignee may, in his discretion, declare and pay dividends to the creditors whose claims have been presented and allowed. No dividend already declared shall be disturbed by reason of claims being subsequently presented and allowed; but the creditor presenting such claim shall be entitled to a dividend equal to the per cent already declared and paid, before any further dividend is made; provided, however, that there be assets sufficient for that purpose; and provided, that the failure to present such claim shall not have resulted from his own neglect, and he shall attach to such claim a statement, under oath, showing fully why the same was not before presented. When a creditor has a mortgage or pledge of real or personal property of the debtor, or a lien thereon, for securing the payment of a debt owing to him from the debtor, and shall not have conveyed, released, or delivered up such security to the sheriff, as provided for by section three thousand four hundred and forty-nine of this code, he shall be admitted as a creditor only for the balance

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