U.S. Supreme Court POBRESLO v. JOSEPH M. BOYD CO., 287 U.S. 518 (1933)

[Page 287 U.S. 518, 522]

for any reason adjudged void, or in consequence of any sale, lien or security being adjudged void.' [Footnote 1]

[Page 287 U.S. 518, 526]

late for his discharge. And, quite in harmony with the purposes of the federal act, the provisions of chapter 128 that are regulatory of such voluntary assignments serve to protect creditors against each other, and go to assure equality of distribution unaffected by any requirement or condition in respect of discharge.

A proceeding under the Arkansas law derives its force solely from legislation that involves a judicial winding up of an insolvent estate and the discharge of the debtor. Such a law is within the field of the federal act. Indeed, the declaration, 'Proceedings commenced under State insolvency laws before the passage of this Act shall not be affected by it' (30 Stat. 566 (11 USCA 110 note)) suggests that Congress intended to supersede these local enactments. See In re Sievers (D.C.) 91 F. 366. Star v. Johnson (Tex. Civ. App.) 44 S.W. (2d) 429. On the other hand the Wisconsin law merely governs the administration of trusts created by deeds like that in question which do not differ substantially from those arising under common-law assignments for the benefit of creditors. The substantive rights under such assignments depend upon contract; the legislation merely governs the execution of the trusts on which the property is conveyed. And as proceedings under any such assignment may be terminated upon petition of creditors filed within the time and in the manner prescribed by the federal act (George M. West Company v. Lea, 174 U.S. 590, 19 S.Ct. 836), it is apparent that Congress intended that such voluntary assignments, unless so put aside, should be regarded as not inconsistent with the purposes of the federal act. Mayer v. Hellman, 91 U.S. 496, 501; Boese v. King, 108 U.S. 379, 385-387, 2 S.Ct. 765; Stellwagen v. Clum, 245 U.S. 605, 615, 38 S.Ct. 215; Straton v. New, 283 U.S. 318, 327, 51 S.Ct. 465. It follows that the above-quoted provision of section 128.06 is valid and effective to prevent garnishment of funds in the hands of the trustee.

Judgment affirmed. Footnotes

Footnote 1 Section 128.06 follows.'All voluntary assignments or transfers whatever ... for the benefit of or in trust for creditors shall be void as against the creditors of the person making the same unless the assignee shall be a resident of this state and shall, before taking possession of the property assigned and before taking upon himself any trust conferred upon him by the instrument of assignment, deliver to the county judge or court commissioner of the county in which such assignor or some one of the assignors at the time of the execution of such assignment shall reside ... a bond ... in a sum not less than the present value of the assets of such assignor, ... with two or more sufficient sureties; ... and the bond shall be conditioned that such assignee shall faithfully discharge the several trusts reposed in him by such assignment and diligently and faithfully collect and reduce to money the property assigned to him and account for and pay over to the several parties, then being creditors of the assignor, all moneys that shall come into his hands from the effects of such assignor after deducting the necessary expenses of performing the several trusts mentioned in the assignment, as settled and allowed by the circuit court, and abide the order of said court. But no assignment shall be void because of any defect, informality or mistake therein or in the bond, inventory or list of creditors accompanying the same; and the court or judge may direct the amendment of the assignment or of any other such paper to effect the intention of the assignor or assignee, and any such amendment shall relate back to the time of the execution of the paper to which it is made. No mistake in filing a copy instead of an original or any like mistake or inadvertent failure to comply with the provisions of this chapter shall avoid the assignment. No creditor shall, in any case where a debtor has made or attempted to make an assignment for the benefit of creditors, or in case of the insolvency of any debtor, by attachment, garnishment or otherwise, obtain priority over other creditors upon such assignment being for any reason adjudged void, or in consequence of any sale, lien or security being adjudged void; but in all such cases the property of such insolvent debtor shall be administered for the ratable benefit of all his creditors under the direction of the court by the assignee or by any receiver of said property and estate appointed as hereinafter provided.'