PART II. SPECIAL RELATIONS OF DEBTOR AND CREDITOR. TITLE I. GENERAL PRINCIPLES, §§ 3429-3433. II. FRAUDULENT INSTRUMENTS AND TRANSFERS, §§ 3439-3442. III. ASSIGNMENTS FOR THE Benefit of CREDITORS, §§ 3449-3473. TITLE I. GENERAL PRINCIPLES. SECTION 3429. Who is a debtor. 3430. Who is a creditor. 3431 Contracts of debtor are valid. 3432. Payments in preference. 3433. Relative rights of different creditors. § 3429. A DEBTOR, within the meaning of this title, is one who, by reason of an existing obligation, is or may become liable to pay money to another, whether such liability is certain or contingent. § 3430. A creditor, within the meaning of this title, is one in whose favor an obligation exists, by reason of which he is, or may become, entitled to the payment of money. § 3431. In the absence of fraud, every contract of a debtor is valid against all his creditors, existing or subsequent, who have not acquired a lien on the property affected by such conTact. § 3432. A debtor may pay one creditor in preference to another, or may give to one creditor security for the payment of his demand in preference to another. § 3433. Where a creditor is entitled to resort to each of several funds for the satisfaction of his claim, and another person has an interest in, or is entitled as a creditor to resort to some, but not all of them, the latter may require the former to seek satisfaction from those funds to which the latter has no such claim, so far as it can be done without impairing the right of the former to complete satisfaction, and without do ing injustice to third persons. TITLE II. FRAUDULENT INSTRUMENTS AND TRANSFERS. SECTION 3439. Transfers, &c., with intent to defraud creditors. 3441. Creditor's right must be judicially ascertained. § 3439. Every transfer of property or charge thereon made, every obligation incurred, and every judicial proceeding taken, with intent to delay or defraud any creditor or other person of his demands, is void against all creditors of the debtor, and their successors in interest, and against any person upon whom the estate of the debtor devolves in trust for the benefit of others than the debtor. Code Civ. Proc. § 479; Penal Code, §§ 154, 531. § 3440. Every transfer of personal property, other than a thing in action, or a ship or cargo at sea, or in a foreign port, and every lien thereon, other than a mortgage, when allowed by law, and a contract of bottomry or respondentia, is conclusively presumed, if made by a person having at the ime the possession or control of the property, and not accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things transferred, to be fraudulent, and therefore void, against those who are his creditors while he remains in possession, and the suc cessors in interest of such creditors, and against any persons on whom his estate devolves in trust for the benefit of others than himself, and against purchasers or incumbrancers in good faith subsequent to the transfer. 53 Cal. 402, 625. § 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 obligation. § 3442. In all cases arising under section 1227, or under the provisions of this title, except as otherwise provided in section 3440, 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. 54 Cal. 629. TITLE III. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. SECTION 3449. When debtor may execute assignment. 3450. Insolvency, what. 3451. Certain transfers not affected. 3452. What debts may be secured. 3453. What preferences may be given. (Repealed.) 3454. Preference must be absolute. (Repealed.) 3455. Certain rights not affected by preferences in assignment. (Repealed.) 3456. Joint and separate debts. (Repealed.) 3457. Assignment, when void. 3458. The instrument of assignment. 3459. Compliance with provisions of last section necessary to validity of assignment. 3460. Assignee takes, subject to rights of third parties 3461. Inventory required. 3462. Verification of inventory. 3463. Recording assignment and filing inventory 3464. Same. 3465. Effect of omitting to record. 3466. Assignment of real property. 8467. Bond of assignees. 3468. Conditions of disposal and conversion. 3469. Accountings. 3470. Property exempt. SECTION 3471. Compensation. 3472. Assignees protected for acts done in good faith. 3473. Assent of creditor necessary to modification of assignment § 3449. An insolvent debtor may, in good faith, execute an assignment of property to one or more assignees, 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 to fraudulent transfers, and to the restrictions imposed by law upon assignments by special partnerships, by corporations, or by other specific classes or persons. Penal Code, § 154. § 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; nor do they affect the power of a person, although insolvent and within this State, to transfer property to a particular creditor for the purpose of paying or securing the whole or a part of a debt owing to such creditor, whether in his own right or otherwise. § 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. [In effect July 1, 1874.] § 3453 of said Code is repealed. [In effect July 1, 1874.] § 3454 of said Code is repealed. § 3455 of said Code is repealed. § 3456 of said Code is repealed. [In effect July 1, 1874.] [In effect July 1, 1874.] § 3457. 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 give a preference of one debt or class of debts over another; 2. If it tend to coerce any creditor to release or compromise his demand; 3. 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; 4. 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; 5. 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; 6. If it exempt him from liability for neglect of duty or misconduct. [In effect July 1, 1874.] § 3458. An assignment for the benefit of creditors must be in writing, subscribed by the assignor, or by his agent thereto authorized by writing. It must be acknowledged, or proved and certified, in the mode prescribed by the chapter on Recording Transfers of Real Property, and recorded as required by sections 3463 and 3464; but recording in one county constitutes a compliance with the following section. § 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 3463, 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; 4. The true consideration of the liability in each case, and the place where it arose; |