Batten v. Smith

• Decision Date: 13 January 1885
• Citation: 22 N.W. 342,62 Wis. 92
• Parties: BATTEN v. SMITH AND ANOTHER.
• Court: Wisconsin Supreme Court

62 Wis. 92

22 N.W. 342

BATTEN

v.SMITH AND ANOTHER.

Supreme Court of Wisconsin.

Filed January 13, 1885.

Appeal from circuit court, Iowa county.

January 9, 1884, the defendants, composing the firm of R. S. Smith & Co., made an assignment under chapter 80, Rev. St., to Richard T. Richards, of all their property and effects, of every kind and description, real, personal, and mixed, belonging to them, or in which they, or either of them, had any right or interest, or which were held by any person or persons for them, or in trust for them, or either of them, (except such as were exempt from levy and sale on execution under the laws of the state of Wisconsin,) the same being more fully and particularly enumerated and described in a verified inventory to be filed in the office of the clerk within 10 days thereafter. Such verified inventory and list of creditors were certified and filed within the time designated. January 22, 1884, the plaintiff commenced this action against the defendants by summons. On the same day, the plaintiff made an affidavit to the effect that the defendants were indebted to him in the sum of $1,200, over and above all legal set-offs, and that the same was due upon express contracts, and that the plaintiff had reason to believe, and did believe, that the defendants had assigned, conveyed, and disposed of their property, or a part of it, with the intent to defraud their creditors, and gave the requisite bond for an attachment; and attachments were issued thereon, and January 24 and 25, 1884, the sheriff returned that he had attached all the interest the defendants had in two certain judgments, and certain pieces of real estate described, and filed an inventory thereof accordingly. February 2, 1884, the defendants served their special answer, verified by them respectively, in which they denied and traversed each and every material statement contained in the plaintiff's said affidavit, except as to their liability for the debt, and pleaded said general assignment. March 6, 1884, the plaintiff made, and thereupon filed, a new affidavit, as a substitute for the original, and which, in effect, contained the following statements, to-wit: that the defendants had assigned, conveyed, disposed of, or concealed, or were about to assign, convey, dispose of, or conceal, their property, or some part thereof, with intent to defraud their creditors; and that the defendants fraudulently contracted one of the debts for which this action was brought. Thereupon the defendants, by way of special answer to said substituted affidavit, admitted their liability for the debt, but denied each and every other allegation therein contained. On the trial of the issues so formed, the court, in effect, found the several facts in favor of the defendants and against the plaintiff, and, as a conclusion of law, in effect, that the defendants were entitled to an order dissolving the writs of attachments, with costs of the trial of said issues, to be taxed, and applied on the judgment in the action itself; and from the order entered thereon the plaintiff brings this appeal.J. P. Smelker and J. C. Gregory, for appellant.

J. M. Smith, for respondent.

CASSODAY, J.

The statute requiring the assignor to make and file, in the office of the clerk, “a correct inventory of his assets, and a list of his creditors,” within 10 days after the execution of the assignment, is peremptory, and a failure to so make and file avoids the assignment. Section 1697, Rev. St; Haben v. Harshaw, 59 Wis. 410; S. C. 18 N. W. REP. 426. But the same section and the same decision declare, in effect, that no mistake made in the inventory or list filed shall invalidate the assignment or affect the right of any creditor. The word “mistake” is not confined to inaccurately stating or describing any of the several items actually mentioned in the list or inventory, but may cover mistakes of omission as well. Farwell v. Gundry, 52 Wis. 268;S. C. 9 N. W. REP. 11;Smith v. Bowen, 20 N. W. REP. 917. In the first of those cases the assignor wholly omitted from his inventory the land on which he resided in a village, notwithstanding it comprised more than one-fourth of an acre, under the supposition that he was entitled to 40 acres as exempt; but the court held that the word “mistake,” in the statute, included mistakes of law, even where all the facts were known to the assignor at the time of making the assignment. In the second, certain creditors were inadvertently omitted from the list, but the assignment was upheld. The obvious purpose of requiring the assignor to file such list of creditors was to enable the assignee to give the notice to creditors prescribed in section 1698, Rev. St. Mather v. McMillan, 19 N. W. REP. 440.

The fact that such list is not conclusive upon the assignee nor any creditor, but may be contested by either, as provided in section 1699, pretty clearly shows that such assignment is not necessarily invalidated by reason of an improper claim being innocently and by mistake included in such list. This is strengthened by the construction put upon the word “such,” as used in the last clause of section 1697 by this court in Steinlein v. Halstead, 52 Wis. 291, S. C. 8 N. W. REP. 881, and also by what is said in Mather v. McMillan, supra. So the obvious purpose of requiring the assignor to file “a correct inventory of his assets” was not only to give to the assignee and creditors the requisite information and description of the property assigned, but also to prevent the assignor from defrauding his creditors by concealing or secretly withholding from the assignee any portion of his property. Id. In other words, it was to prevent fraud or bad faith as against creditors, and secure a faithful execution of the trust. Here the two judgments attached,...