Farwell v. Cohen

• Decision Date: 10 June 1891
• Citation: 138 Ill. 216,28 N.E. 35
• Parties: FARWELL et al. v. COHEN.
• Court: Illinois Supreme Court

138 Ill. 216

28 N.E. 35

FARWELL et al.

v.COHEN.¹

Supreme Court of Illinois.

June 10, 1891.

Appeal from appellate court, third district.

A petition was filed in the county court of Vermillion county, Ill., by John V. Farwell & Co., praying that an order be made restraining Daniel Cohen from disposing of property while he held it in trust for certain creditors of George Silverman, assignor, without an order of court, petitioners not having been made beneficiaries under such assignment, and that he be removed as assignee, and some suitable person appointed. ‘That in all cases of voluntary assignments hereafter made for the benefit of creditor or creditors the debtor or debtors shall annex to such assignment an inventory, under oath or affirmation, of his, her, or their estate, real and personal, according to the best of his, her, or their knowledge, and also a list of his, her, or their creditors, their residence and place of business, if known, and the amount of their respective demands; but such inventory shall not be conclusive as to the amount of the debtor's estate, but such assignment shall vest in the assignee or assignees the title to any other property, not exempt by law, belonging to the debtor or debtors at the time of making the assignment, and comprehended within the general terms of the same. Every assignment shall be duly acknowledged and recorded in the county where the person or persons making the same reside, or where the business in respect to which the same is made has been carried on; and in case said assignment shall embrace lands, or interest therein, then the same shall also be recorded in the county or counties in which said land may be situated.’ Section 7 of the act confers jurisdiction upon the county court to supervise execution of assignments. Silverman made a conveyance to Cohen for the benefit of a few creditors mentioned in the instrument, but did not annex such inventory or list of such creditors. On hearing, Cohen claimed that the county court had no jurisdiction to act in the premises, as the conveyance did not purport to convey all of the grantor's or mortgagor's property; therefore the instrument was not one of assignment, within the meaning of the act. Cohen was removed from his trust, and appealed to the appellate court, which reversed the order. 29 Ill. App. 277. Plaintiffs appeal to this court.

MAGRUDER, C.J., and WILKIN, J., dissenting.

For dissenting opinion, see 32 N.E. 893.

Tenny, Hawley & Coffeen, E. R. E. Kimbrough, Smith & Pence, and Kraus, Mayer & Stein, for appellants.

J. B. Mann and Moses & Pam, for appellee.

BAKER, J.

John V. Farwell & Co. filed in the county court of Vermillion county a petition, verified by affidavit, wherein it was stated that they were creditors of George Silverman, of that county, and that he was indebted to them for goods sold and delivered in the sum of $1,498.58; and that on December 18, 1887, said Silverman executed and delivered to Daniel Cohen an instrument of writing as follows: ‘Know all men by these presents, that I, George Silverman, of the city of Danville, county of Vermillion and state of Illinois, in consideration of the sum of thirteen thousand four hundred and sixty-nine and seventy-hundredths dollars, to me in hand paid by H. B. Claflin & Co., M. Cohen, D. Cohen, Simon and Rosenbloom, Mayer Singer, and Sarah Silverman, the receipt whereof is hereby acknowledged, and in consideration of the sum of one dollar in hand paid to me by Daniel Cohen, do hereby sell, assign, transfer, and set over unto said Daniel Cohen all and singular the following goods and chattels, viz.: All the stock of dry goods and carpets, boots and shoes, store fixtures, and every other article of property in and about the store-room known as ‘No. 115 East Main Street,’ in the city of Danville and state of Illinois, in trust for the uses and purposes following, that is to say: Whereas, I am indebted to the persons hereinafter named in the amount hereinafter mentioned, which are evidence by sundry promissory notes, as follows: ‘One note dated August 10, 1887, for six hundred and fifty-three dollars, due in six months from date; one note dated August 19, 1887, for seven hundred ninety-two dollars and ninety-two cents, due in four months from date; one note dated August 20, 1887, for six hundred and fifty-four dollars and one cent, due six months after date; one note dated October 2, 1887, for four hundred twenty-one dollars and thirty-six cents, due in three months from date; one note dated October 6, 1887, for seventy-four dollars and fifty cents, due in four months from date; one note dated August 9, 1887, for seven hundred and ninety-one dollars, due in four months from date, all payable to H. B. Claflin & Co.; one note dated December 8, 1887, for five thousand eight hundred and fifty dollars, due one day after date, payable to Moses M. Cohen; one note dated December 8, 1887, for fourteen hundred and fifty dollars, due one day after date, and payable to Daniel Cohen; one note dated December 8, 1887, for seven hundred and forty-one dollars, payable to Mayer Singer, and due one day after date; one note dated December 8, 1887, for nineteen hundred dollars, due one day after date, and payable to Sarah Silverman; also, the sum of one hundred and fifty dollars, due on an open account to Simon and Rosenbloom. And whereas, I am desirous of securing the payment of said several sums of money: Now, therefore, the said Daniel Cohen shall take, hold, and receive said goods and chattels hereby conveyed, in trust, to sell the same at public sale, in such quantities as he may see fit, after giving at least ten days' notice of the same, by posting up notices of the same in at least five public places in said city of Danville, and out of the proceeds thereof, after paying the expenses of caring for said property and making said sale, to- First, pay the several amounts mentioned in said several notes payable to H. B. Claflin & Co.; Secondly, to pay said note to Daniel Cohen; thirdly, to pay the other indebtednesses above mentioned: provided, however, that said trustee shall not sell any more of said goods and property than is sufficient to pay said indebtedness and expenses aforesaid. In witness whereof I have hereunto set my hand and seal this 14th day of December, 1887. GEORGE SILVERMAN. [Seal.]’ The petition further stated that the stock of goods so sold, assigned, and transferred to Cohen composed all the property and estate of any value belonging to Silverman, and that the latter at the time of executing the instrument was, and still is, wholly insolvent; that the liabilities of Silverman exceeded $40,000; and that said goods were insufficient to pay such liabilities, their value being not to exceed $20,000. It was alleged that the transfer was in fact and in law an assignment for the benefit of creditors to Cohen as assignee, with preferences in favor of the persons in the instrument named, and that thereby Cohen became assignee of Silverman, and subject to all the duties and liabilities of an assignee; further, that he had seized the property, and held possession of the same, but instead of administering the same according to law, under the supervision and direction of the court, intended to wholly ignore the court, and administer the property solely for the benefit of the persons named in the assignment as beneficiaries, without regard to the rights of petitioners and other creditors of Silverman, and without complying with any of the provisions of the laws of Illinois regulating assignments, and in pursuance of such intention had given notice that he would sell said property on December 26, 1887, etc. It was also alleged that Cohen was not a resident of the state, and not a proper person to act as assignee; that he was one of the preferred creditors in the assignment, a relative of the assignor, and that he would not act impartially in the matter; that he was acting solely in the interest and under the direction of the insolvent and the preferred creditors; and that he had filed in the court no bond as assignee, nor any schedule or inventory of the property assigned, and that he did not intend to do so until compelled by the order of court. The prayer of the petition was that an order be entered restraining Cohen from disposing of the property without an order of court, and requiring him to file a schedule of the assigned property, and submit to the jurisdiction of the court, and that he be removed as assignee, and some suitable person appointed to administer the estate under the direction of the court, and that a citation issue against Silverman, etc., and for other relief.

The answer of Cohen to the petition was as follows: ‘The said respondent, Daniel Cohen, not admitting the jurisdiction of said court in the premises, but reserving at all times hereafter the right to question the same, for cause why said petition should not be granted, says that he admits that George Silverman, on the 14th day of December, 1887, executed to respondent the said instrument in said amended petition described. Respondent, further answering, says that he is not sufficiently advised of the financial condition of the said George Silverman to state whether he is insolvent or not, or what the amount of his indebtedness really is or was, but admits that said stock of merchandise does not exceed in value the sum of twenty thousand dollars; nor is he able to say whether said stock constituted all of Silverman's property. Respondent, further answering, denies that either in fact or in law the instrument is an assignment for the benefit of creditors, within the meaning of the laws of the state of Illinois, and denies that the same way be the said Silverman intended to be an assignment, or was by respondent accepted as such, and avers that the same was not acknowledged by said Silverman; but, on the contrary, respondent avers that said instrument was executed and...