may be S1927. An assignment for the benefit of creditors What debts may provide for any subsisting liability of the secured. assignor which he might lawfully pay, whether absolute or contingent.3 1 Barnum v. Hempstead, 7 Paige, 568; Lansing v. Wood- The principal and lawful interest of a usurious debt Cunningham v. Freeborn, 11 Wend., 241; Kellogg v. A provision authorizing the payment of debts S 1928. Except as otherwise specially provided by statute, an assignment by an insolvent debtor, for the benefit of creditors, may give a preference to one or more creditors or classes of creditors, in the following cases, and in no others: 1. Judgments may be preferred to debts not in judgment; 2. Debts which are liens or charges upon the assigned property, or upon some part of it, may be preferred to debts which are not such liens or charges; 3. Debts for money or other property lent without interest, may be preferred to debts for money lent upon interest, or for property sold, or for services rendered; 4. Debts due from the assignor by virtue of a a trust, may be preferred to debts which are not thus due; and, 5. Debts for personal services performed within six months next before the assignment, may, to an extent not exceeding fifty dollars to any one person, be preferred to other debts not within any of the preceding classes. 77 This provision is new. What pre may be ferences given. Preference must be absolute. Certain rights not S1929. A preference, in an assignment for the benefit of creditors, can only be given absolutely,' and without reserving any power of revocation.2 1 Barnum v. Hempstead, 7 Paige, 568; Boardman v. Hal- S 1930. No provision in an assignment, giving a affected by preference to a creditor, can affect or impair any in assign ment. Joint and separate debts. Assignment when void. right of another creditor to priority of payment, whether created by law, or arising from an obligation or transaction of the parties. S 1931. Joint, or joint and several debtors can prefer their joint creditors only out of joint property; and can prefer the individual creditors of each, only out of the separate property of each. This provision is partly new. Compare Kirby v. Schoonmaker, 3 Barb. Ch., 46; Nicholson v. Leavitt, 4 Sandf., 252; Jackson v. Cornell, 1 Sandf. Ch., 348; Van Rossum v. Walker, 11 Barb., 237; Wilson v. Robertson, 21 N. Y., 587; 19 How. Pr., 350; Smith v. Howard, 20 How. Pr., 121; Cox v. Platt, 32 Barb., 126; 19 How. Pr., 121; Turner v. Jaycox, 40 Barb., 164; Scott v. Guthrie, 25 How. Pr., 481, 512. S1932. An assignment for the benefit of creditors is void against any creditor of the assignor not assenting thereto, in the following cases: 1. If it gives an unlawful preference of one debt or class of debts over another; 2. If it gives a preference dependent upon any condition or contingency, or with any power of revocation reserved ;1 3. If it tends to coerce any creditor to release or compromise his demand;2 4. If it provides 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 justly due from the assignor ;3 5. If it reserves 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 ;* 6. If it confers 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;5 7. If it exempts him from liability for neglect of duty or misconduct; or, 8. If it violates section 1931 of this Code. 'Averill v. Loucks, 6 Barb., 470; Sheldon v. Dodge, 4 'Grover v. Wakeman, 11 Wend., 187; 4 Paige, 23; 1 See Goodrich v. Downs, 6 Hill, 438; Strong v. Skinner, 4 Barb., 546; Barney v. Griffin, 2 N. Y., 365; Leitch v. Hollister, 4 N. Y., 211; Lansing v. Woodworth, 1 Sandf. Ch., 43; Hendricks v. Robinson, 2 Johns. Ch., 284; Hooper v. Tuckerman, 3 Sandf., 311; Wintringham v. Lafoy, 7 Cow., 735; Van Rossum v. Walker, 11 Barb., 237; Ely v. Cook, 18 id., 612; Taylor v. Stevens, 7 How. Pr., 415; Mackie v. Cairns, 5 Cow., 547; Judson v. Gardner, 4 N. Y. Leg. Obs., 424; Sheldon v. Dodge, 4 Den., 217; Collumb v. Caldwell, 16 N. Y., 484; Dow v. Platner, 16 N. Y., 562; Carpenter v. Underwood, 19 N. Y., 520. Smith v. Howard, 20 How. Pr., 121; Jessup v. Hulse, 21 N. Y., 168; Ogden v. Peters, id., 23; Griffin v. Marquardt, id., 121. Examples are: a power to name his successor (Planck v. Schermerhorn, 3 Barb. Ch., 644); a power to sell within a "convenient time" (Woodburn v. Mosher, 9 Barb., 255; compare Bellows v. Partridge, 19 Barb., 176); a power to give preferences, or to change those directed by the assign. ment (Barnum v. Hempstead, 7 Paige, 568; Boardman v. Halliday, 10 id., 223; Strong v. Skinner, 4 The instrument of assignment. Compliance with provi Barb., 546); a power to nurse the estate (Dunham v. Waterman, 17 N. Y., 9; 6 Abb. Pr., 357; Schlus sel v. Willett, 34 Barb., 615: 12 Abb. Pr., 397; 22 How. Pr., 15); a power to sell on credit (Rogers v. De Forest, 7 Paige, 272; Barney v. Griffin, 2 N. Y 365; Nicholson v. Leavitt, 6 N. Y., 510; and see 10 id., 591; Burdick v. Post, 6 N. Y., 522; Porter v. Williams, 9 N. Y., 142; Brigham v. Tillinghast, 13 N. Y., 215; Lyons v. Platner, 11 N. Y. Leg. Obs., 87; Wilson v. Robertson, 21 N. Y., 589; 19 How. Pr., 350). A power to employ agents is not within the provision (Mann v. Witbeck, 17 Barb., 388; Van Dine v. Willett, 38 Barb., 319). Neither is a power to compromise "bad and doubtful" claims (Brigham v. Tillinghast, 15 Barb., 618; Dow v. Platner, 16 N. Y., 562; Bellows v. Partridge, 19 Barb., 176); nor a power "to pay rent and taxes," on real estate, until sold (Van Dine v. Willett, 38 Barba 319; 24 How. Pr., 206); or to pay off mortgages, or to insure (Whitney v. Krous, 11 Barb., 198). S 1933. An assignment for the benefit of creditors must be in writing, subscribed by the assignor, or by his agent thereto authorized by writing, and, if it embraces a fee or freehold estate in real property, it must be sealed.' It must be acknowledged by the person executing it, or proved by a subscribing witness, in the mode prescribed by the article on Proof and Acknowledgment of Instruments, and the acknowledgment or proof must be certified,' before its delivery. 'It is proposed to insert the provision for signing and sealing, in accordance with the requirements of the Title on TRANSFER. 'It has been held that proof by a subscribing witness is not Except where otherwise noted, this section conforms to S1934. Unless the provisions of the last section sions of last are complied with, an assignment for the benefit of creditors is void against every creditor of the assignor section, not assenting thereto. S 1935. 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. Curtis v. Leavitt, 15 N. Y., 195; Van Heusen v. Radcliff, necessary to validity of assignment. required. S1936. Within twenty days after an assignment Inventory is made for the benefit of creditors, the assignor must make and file, in the manner prescribed by section 1938, a full and true inventory, showing:1 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; 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; 6. All property of 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 incumbrances existing thereon, and all vouchers and securities relating thereto, |