Bangs v. Fadden
| Decision Date | 18 May 1895 |
| Citation | 64 N.W. 78,5 N.D. 92 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Grand Forks County; Templeton, J.
Action by Tracy R. Bangs, assignee, against John Fadden and others. Defendants had judgment and plaintiff appeals.
Reversed.
Judgment of the District Court reversed, and a new trial ordered.
Bangs & Fisk, for appellant.
Burke Corbet, for respondents.
The sole question before us relates to the validity of a general assignment for the benefit of creditors executed by William Brown to the plaintiff. Creditors of the assignor having attached the property embraced in the assignment, the plaintiff sued them and the sheriff who levied the attachments in conversion. On the trial the assignment was excluded from evidence on the ground that it was void on its face. The court directed a verdict in favor of defendants and from the judgment entered on that verdict plaintiff appeals.
The validity of the assignment is assailed on two grounds. It is first insisted that the assignment is void for the reason that by the reservation of exempt property contained therein the particular property which was to pass thereunder was at the time of the execution and delivery of the assignment rendered uncertain, and hence that no property can be said to have been conveyed by the instrument. This proposition is not destitute of logical force. Our statute plainly contemplates that it shall be lawful for the assignor to reserve his exempt property. Section 4663, Subd. 3, Comp Laws, declares that an assignment is void if it reserves any interest in the assigned property, or in any part thereof, to the assignor, or to his benefit, before all his existing debts are paid, "other than property exempt by law from execution." And section 4667, Comp. Laws, provides that the assignor shall within 20 days after making an assignment make and file an inventory, in which, among other things, he must list first the exempt property, and then all other property, in separate schedules. This legislation makes it apparent that the law intended that the assignor should be entitled to his exempt property as in other cases (as, indeed, we held in Bank v. Freeman, 1 N.D. 196, 46 N.W. 36,) and that the assignment would be valid, although reserving the exempt property in general terms only. The assignment law does not contemplate that the assignment shall specify the property claimed as exempt. On the contrary, it in terms declares that such specification shall be made in the inventory to be subsequently filed. It, indeed, would be strange if the assignor could not obey the statute without thereby destroying the assignment. It would be utterly impracticable to require him to specify in the assignment the exempt property, for the law allows him only property of the value of $ 1,500, aside from the specific articles which are exempt, and does not permit him to fix that value himself so as to bind his creditors. Should the exempt property be specified in the instrument itself, and excepted from its provisions, then, in case it should exceed $ 1,500 in value, the assignment would not embrace all of the assignor's property subject to execution, and hence would not be a general assignment for the benefit of creditors. But the statute relates to only general assignments,--i. e. those embracing all the assignor's property not exempt by law from execution--and not to partial assignments. It is absurd to suppose that the legislature intended to require the assignor to designate in the assignment itself the property which he claims as exempt, when the effect of such a designation would in many a case be to render the assignment a transfer of only a portion of his property not exempt, and thus defeat the object of the law, which relates exclusively to general assignments. In the majority of the cases it would be found to be the case that the assignor had claimed in the assignment more than $ 1,500 of property in value, when the value of the specified property came to be fixed in such a way as would bind his creditors as to its value. In no case would his valuation be found to agree with the valuation as ultimately established. One of two things would invariably be true,--the assignment would embrace only a portion of the assignor's property not exempt because of undervaluation by the assignor, or he would lose a portion of the exemption given him by the law by reason of an overvaluation of the specified property. If the statute were silent, such a construction should not be placed on it as to require the exempt property to be specified in the assignment. But the statute is not silent. It declares that the particular property claimed as exempt shall be set forth, not in the assignment itself, but in the inventory to be subsequently filed. And yet it is asserted that an assignment whose terms are in harmony with the letter and the obvious policy of the law is void. We hold that a general assignment which, in general terms, excepts exempt property; is a valid general assignment for the benefit of creditors. Whether the particular property which is finally set apart as exempt...
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