Bates v. Simmons

• Decision Date: 13 January 1885
• Citation: 22 N.W. 335,62 Wis. 69
• Parties: BATES AND OTHERS v. SIMMONS. AS GARNISHEE.
• Court: Wisconsin Supreme Court

62 Wis. 69

22 N.W. 335

BATES AND OTHERS

v.SIMMONS. AS GARNISHEE.

Supreme Court of Wisconsin.

Filed January 13, 1885.

Appeal from circuit court, Fond du Lac county.

February 27, 1883, J. C. Whittlesey made an assignment for the benefit of his creditors to M. W. Simmons. The plaintiffs, having commenced an action against Whittlesey, did, May 10, 1883, summon the defendant, as garnishee, upon an affidavit made in behalf of the plaintiffs, to the effect that the affiant verily believed that the defendant Simmons was indebted to the plaintiffs, and had property, real and personal, in his possession, or under his control, belonging to Whittlesey, and that Whittlesey had no property liable to execution sufficient to satisfy the plaintiff's demand, and that such indebtedness or property was not by law exempt from execution, and that Whittlesey was indebted to the plaintiffs in the sum of $2,021 on contracts, over and above all offsets. The garnishee appeared and answered, in effect setting up the assignment to him under chapter 80, Rev. St.; denied that he had then, or at the time of the service of the summons upon him, any property, etc., belonging to Whittlesey, other than that which he held as such assignee, or that he was indebted to him in any sum whatever. The plaintiff took issue upon this answer, and alleged, in effect, that the assignment was not made in good faith nor for a valuable consideration, but in trust for the use of Whittlesey, and not accompanied by an immediate delivery, and not followed by an actual and continued change of possession of the things sold and assigned, and was void as against the plaintiffs; that said transfer or assignment was made with the intent to hinder, delay, and defraud the plaintiffs, and other creditors of Whittlesey; that it was void upon its face, and not executed as required by law. Upon the trial of that issue, the court found, in effect, that the allegations contained in the answer of the garnishee were true; that the assignment was made in good faith, in trust for the benefit of Whittlesey's creditors; was due and regular in form, and complied with all the requirements of the statutes, so as to render the same valid and legal; that at the time of the service of the garnishee summons, and at the time of his answering, he was not indebted to Whittlesey, and did not have in his possession nor under his control any property belonging to him, except such as he held in trust under and by virtue of the assignment; and upon all the issues the court found in favor of the garnishee. And, as conclusions of law, the court found, in effect, that the assignment was legal, valid, and binding; that the garnishee was not liable to the plaintiffs as such, but was entitled to judgment dismissing the garnishee proceedings upon the merits, with costs; and the same was ordered accordingly. From the judgment entered thereon the plaintiffs bring this appeal.Weisbrod & Harshaw, for appellants.

George E. Sutherland, for respondent.

CASSODAY, J.

It is claimed that the court excluded evidence which would have shown that the assignment was made with the intent to defraud creditors. The only question excluded was one put to the assignor as to how much board his daughter (one of the preferred creditors) was paying him. This clearly related to the time of the trial, which was more than a year after the assignment, and hence could have no bearing as to the intent with which the assignment was made, and was therefore properly excluded as immaterial. The result of this ruling was a colloquy between the court and counsel for the plaintiffs, in which the latter disclaimed all expectation of showing that any of the scheduled “creditors were not bona fide creditors,” and the court, among other things, stated that “the intent to defraud would only be determined from a preference of creditors who had no claim, or beyond a just claim, against the assignor.” This is urged as error. Assuming that an intent to defraud might have been inferred from some other fact or circumstance than a mere preference of a claim wholly or in part fictitious, yet, in the case of a general assignment by an insolvent debtor, it would be so rare and exceptional that we think that good faith always due to the court from counsel required the latter to disclose the nature of such exceptional fact or circumstance before it can be fairly claimed that the court intended to exclude evidence tending to prove it. From the whole colloquy we are inclined to think that the court merely intended to inform counsel that an intent to defraud creditors could not be inferred from the mere fact that a general assignment had been made by an insolvent debtor for the benefit of his creditors, nor from the mere fact that in such an assignment the assignor had preferred some of his creditors to others. This was undoubtedly the law. Lord v. Devendorf, 54 Wis. 496; S. C. 11 N. W. REP. 903;Ball v. Bowe, 49 Wis. 495;S. C. 5 N. W. REP. 909.

There was no evidence that any portion of any of the preferred debts were fictitious. The mere fact that some of the assignor's preferred debts had previously been secured by mortgage on his wife's real estate did not preclude the court from holding that there was no intent to defraud in giving such preference. 49 Wis. 498;S. C. 5 N. W. REP. 911. Such preferred debt was, nevertheless, the debt of the assignor, and not the debt of his wife. It is claimed that the assignment was intentionally made before the passage of the bill (chapter 349, Laws 1883) then pending in the legislature forbidding preferences, so as to prevent the assignor's property from being equally distributed among his creditors under that act. The fact remains that, at the time of making the assignment, the assignor had the legal right of preferring some of his creditors to others. Having such right at the time, was he precluded from its exercise by his knowing that the legislature contemplated so changing the law as to make the act illegal? To answer in the affirmative would be giving effect to the law several weeks before its passage. On the contrary, a legal right, exercised strictly in accordance with the law in force at the time, does not become illegal merely by purposely doing it then, instead of postponing its exercise to a time when the law will be changed so as to make it illegal. An illegal motive cannot justly be ascribed to the proper exercise of a legal right. Certainly, there is no lack of authority in support of the proposition. South Royalton Bank v. Suffolk Bank, 27 Vt. 505;Heywood v. Tillson, 75 Me. 225; S. C. 29 Alb. Law J. 27, and cases there cited.

It is claimed that the form of the assignment is peculiar, in that it is made to the assignee, “his heirs, executors, administrators, and assigns,” instead of running to his successors and assigns. But this, instead of being a “peculiar” form of transfer, is the usual form where the assignment includes real estate. Burrill, § 133. The habendum clause in such case is substantially the same. Id. § 140. The assignment is in this respect, as it may properly be, even if not essential, a deed of conveyance of the absolute title, with a declaration of trust. Id. § 127. There have been assignments made in separate instruments, and held valid. Id. § 128; Norton v. Kearney, 10 Wis. 443. The use of the words “heirs and assigns” was, undoubtedly, to give effect to the assignee's conveyance, although it may have been unnecessary. Angell v. Rosenbury, 12 Mich. 266. The contingency suggested as to the death of the assignee before the execution of the trust, leaving minor or non-resident heirs, is not here involved, and hence is not here considered.

It is claimed that the assignment is void because the assignee's bond runs to “A. E. Richter, clerk of the circuit court of the county of Fond du Lac,” etc. This, we think, was a substantial compliance with the statute requiring it to be “executed to the clerk of the circuit court of the county, by his name of office, as obligee.” Section 1694, Rev. St. The insertion of the word “as” before the word “clerk” might have been a more apt expression, but its...