Auley v. Ostermann

• Citation: 65 Wis. 118,25 N.W. 657
• Parties: AULEY AND ANOTHER, ASSIGNEES, ETC., v. OSTERMANN.
• Decision Date: 01 December 1885
• Court: Wisconsin Supreme Court

65 Wis. 118

25 N.W. 657

AULEY AND ANOTHER, ASSIGNEES, ETC.,

v.OSTERMANN.¹

Supreme Court of Wisconsin.

Filed December 1, 1885.

Appeal from circuit court, Price county.Willis Hand, for appellants, Nels Auley and another.

Adolf Herdegen, for respondent, George K. Ostermann.

TAYLOR, J.

The appellants brought an action in trespass against the respondent for wrongfully taking and converting to his own use certain personal property which they claimed was in their possession, in trust, as assignees, for the benefit of the creditors of A. P. Morner & Co., and claimed damages in the sum of $600. The defendant answered (1) a general denial of all the allegations of the plaintiffs' complaint not afterwards admitted; (2) that at the time of the alleged taking of said property, A. P. Morner & Co. (consisting of A. P. Morner and K. A. Ostergren) were indebted to “The Brand Stove Company, Limited,” in the sum of $498.83, and that said company obtained an attachment out of the circuit court of Price county against the goods of said A. P. Morner & Co. and placed said attachment in the hands of the defendant, then being the sheriff of said county, to execute, and that the defendant thereupon levied said attachment upon the goods described in the complaint as the goods of A. P. Morner & Co.; (3) that on the fifteenth of March, 1885, and after the commencement of the action, the defendant tendered a release of the property of the plaintiff, with six cents damages, and the costs of the action, which tender the plaintiffs declined to accept; (4) the defendant tenders the plaintiff a judgment for six cents damages and the costs, and the release of the property.

When the action was called for trial at the circuit the plaintiffs refused to accept the defendant's offer for judgment, and before offering any evidence on their part moved the court to instruct the jury to find a verdict in favor of the plaintiffs for the sum of $600, the amount claimed in the complaint, on the pleadings in the case. This motion was denied, for the reason that the facts shown by the pleadings entitled the plaintiff to nominal damages only, unless special damages are shown, as a tender of the property with costs was made after the action was commenced. To this ruling of the court no exception was taken by the plaintiffs on the trial, and no motion for a new trial was made in the court below by the plaintiffs for this or any other cause. After this decision was made the plaintiffs, in order to maintain their action, offered in evidence the papers purporting to be a voluntary assignment of the property of said A. P. Morner & Co., bearing date of November 28, 1884, together with the bond and affidavits of the sureties thereto, and all the other papers connected with said assignment. The defendant objected to the receipt of these papers in evidence on the ground that they showed upon their face that such assignment was void, in not complying with the statute regulating such assignments. The court excluded the evidence. To this ruling of the court exception was taken by the plaintiffs.

The plaintiffs then further offered to show a list of the property described in the complaint and the appraised value of the same, by introducing the appraisement of the same contained in the attachment proceedings in the case of Brand Stove Co. v. Morner, showing the appraised value of such property to be the sum of $564.50. Plaintiffs also offered to show that the value of the goods taken was $564.60, and also that the property was taken by the defendant out of the possession of the plaintiffs on the nineteenth of January, 1885; that such property has remained out of the possession of the plaintiffs ever since and in the possession of the defendant; that the plaintiffs took possession of the property described in the complaint under the assignment as a part of the assets of the assignors; that the same was described in the inventory attached to the assignment, and that before the defendant took possession of said property he was notified by the plaintiffs that they were in possession, claiming title to the same under the assignment mentioned. All the evidence offered was excluded upon the objection of the defendant, and exceptions duly taken by the plaintiffs. The exclusion of this evidence is assigned as error by the appellants. No other evidence being offered, the defendant had a verdict and judgment for costs thereon. The plaintiffs, in their complaint, alleged that they are owners in trust under the assignment offered in evidence. There is no claim that they had any right to the property or the possession thereof except as assignees of said A. P. Morner & Co. The answer of the defendant denied their title as assignees as well as the wrongful taking of the same by the defendant. The first answer of the defendant denies each and every allegation of the plaintiffs' complaint, except as afterwards admitted by the further answers. There is nothing in the further answers of the defendant which admits the title of the plaintiffs, or their possession or right of possession thereof, as assignees of A. P. Morner & Co., or in fact any other right or title in the plaintiffs. Proof of an assignment from Morner & Co. to the plaintiffs was necessary to sustain the allegations of the complaint and show their right to maintain the action.

Two objections are relied upon by the learned counsel for the respondent in this court to sustain the ruling of the court in rejecting the evidence of the assignment papers: (1) That only partnership property was assigned; and (2) that one of the sureties on the bond failed to swear that he was a freeholder.

This court, in the case of Rumery v. McCulloch, 54 Wis. 565, S. C. 12 N. W. Rep. 65, held an assignment made by a partnership of partnership property only a valid assignment. It does not appear in that case that any exception was made to the assignment on the ground that it assigned only partnership property; but the rights of the parties to the action depended upon the validity of the assignment, and the assignment was held valid. The language quoted by the counsel for the respondent from the opinion in the case of Alkan v. Insurance Co., 53 Wis. 145,S. C. 10 N. W. Rep. 91, had no reference to the question of a partnership assignment. In Maryland it has been frequently held that a voluntary assignment for the benefit of creditors, made by a partnership, in which there is a stipulation that the creditors who avail themselves of such assignment shall, upon receipt of their proper proportion of the proceeds of the assigned property, release their claims against the assignor, is void, unless all the property of the assignors, both partnership and individual, is assigned for the benefit of their creditors. Citizens Ins. Co. v. Wallis, 23 Md. 182, and cases there cited. In the absence of any requirement in the assignment that the creditors upon availing themselves of the benefit of the assignment shall release their entire claims against the assignors, there does not appear to be any reason for holding the assignment of a firm of the firm property only, for the benefit of the firm creditors, void. By such assignment the creditors are presumed to get the benefit of the firm property in payment of their debts, and if the partners have individual property not assigned, such property remains liable to the payment of their debts, the same as though no assignment had been made. Previous to the enactment of the statute regulating voluntary assignments in this state, this court held that a debtor might make a valid assignment of a part of his property for the benefit of his creditors. Norton v. Kearney, 10 Wis. 443. That rule is undoubtedly changed by the statute, and an individual now making an assignment for the benefit of creditors must assign all his property, otherwise it would be held void. Under the present law we think a partnership may be treated as a person for the purpose of making an assignment; and when such partnership assigns all its partnership property for the benefit of the creditors of the firm, and the assignment is valid in other respects, it ought not to be held invalid because the individual property of the partners is not also assigned. But in the view we have taken of this case it is unnecessary to further discuss this point.

The second objection taken to the assignment it seems to us is well taken, and is fatal to the validity of the assignment. Section 1694, Rev. St., declares that all voluntary assignments for the benefit of creditors shall be void as to the creditors of the assignor, unless executed with the formalities mentioned in said section. The section, among other things, requires the assignee, before taking upon himself the trust under the assignment, to deliver to the county judge or court commissioner of the county in which such assignment is made “a bond, in a sum not less than the whole amount of the nominal value of the assets of the assignor * * * with two or more sufficient sureties, freeholders of this state, who shall each testify to his responsibility, and by their several affidavits satisfy the officer taking such bond that the property of such sureties, being within this state, is worth, in the aggregate, the sum specified therein.” The objection taken to the bond given in this case is that it does not show upon its face, nor by the affidavits of the justification of the sureties, that the surety J. H. Fewell was a freeholder of this state. The bond was in the sum of $10,000. There were four sureties. Two made affidavit that they were freeholders of this state, and were each worth $2,000; the third made a similar affidavit as to being a freeholder, and stated that he was worth $1,500; the fourth, J. H. Fewell, made affidavit that he was worth the sum of $5,000, over and above all debts and liabilities, in property in this state not by law exempt from execution, but he failed to state in his...