Where the partners of an insolvent firm, by an instrument under seal, assign and convey all the partnership property and assets to a creditor as agent of and in trust for all other creditors whose names are or shall be signed to an agreement thereto annexed, accepting the property in full satisfaction of their respective debts, the conveyance, in the absence of fraud, is to be regarded as an ordinary sale upon a valuable consideration, and not as an assignment, and will be upheld as against the subsequent process of a creditor not accepting its provisions.
BLODGETT, J.
The trustee must be discharged. Whatever name may have been given to the conveyance in question by the parties, the practical and legal effect of it was to quitclaim the debtors' interest in the firm property to the creditors, who accepted it in satisfaction and payment of their debts. The transfer became perfected when the property was delivered to the agent of the subscribing creditors, and all the debtors' interest in it passed absolutely and irrevocably, without reversion or return under any circumstances. The transaction thus became devested of the character of a trust in any just sense, and in all its essential legal qualities and effect is to be regarded as an ordinary sale or conveyance upon a valuable consideration, and not as an assignment, which is in the nature of a trust, and whose "characteristic quality is, that after its object has been accomplished, any residue of unappropriated property, or its proceeds, returns to the assignor, who to this extent may be said to have never parted with his interest in it." Bur. Assignments (2d ed.) 30. It is therefore unnecessary to consider the validity of the conveyance either as a statute or common-law assignment, and relative to which counsel have furnished elaborate briefs.
Exceptions sustained, and trustee discharged.
STANLEY, J., did not sit: the others concurred.