Bradley v. Bailey

• Decision Date: 16 October 1895
• Citation: 64 N.W. 758,95 Iowa 745
• Parties: DAVID BRADLEY & COMPANY, Appellants, v. R. M. BAILEY, Defendant, and J. U. SAMMIS, Intervener and Appellee
• Court: Iowa Supreme Court

64 N.W. 758

95 Iowa 745

DAVID BRADLEY & COMPANY, Appellants, v. R. M. BAILEY, Defendant, and J. U. SAMMIS, Intervener and Appellee

Supreme Court of Iowa, Des Moines

October 16, 1895

Appeal from Plymouth District Court.--HON. F. R. GAYNOR, Judge.

Action at law aided by attachment against defendant, Bailey. J. U Sammis intervened, claiming the attached property as assignee for the benefit of Bailey's creditors. Plaintiff replied contesting the validity of the assignment, claiming that it is void by reason of preferences. Intervener demurred to the reply, which demurrer was sustained, and plaintiff appeals.

Reversed.

Argo McDuffie & Reichmann and Wright & Baldwin for appellants.

Sammis & Scott for appellee.

OPINION

Deemer, J.

On February 27, 1894, plaintiff brought this action to recover of defendant, Bailey, the amount due and to become due upon twelve promissory notes executed by said Bailey, and the further sum of two hundred and twenty-nine dollars and three cents upon an open account. It alleged sufficient grounds for attachment, and thereupon a writ issued, which on February 28th was levied upon certain personal property of defendant, Bailey. April 16, 1894, one J. U. Sammis intervened in the action, claiming title and right to the possession of the property levied upon, under a deed of assignment executed to him by defendant, Bailey, on the third day of February, 1894, and duly recorded on the twenty-third of February of said year. Thereafter plaintiff filed its answer to the petition of intervention, in which it in substance admitted the execution of the deed of general assignment. It also alleged that within five minutes of the recording of the deed of assignment a certain mortgage was placed on file, covering part of the assigned goods, from Bailey to one Pageler, to secure an alleged indebtedness of two thousand five hundred dollars; that in December, 1893, Bailey purchased some real estate in South Dakota for the sum of one thousand dollars, and to secure an alleged indebtedness due his wife, Minnie Bailey, the title was taken in her name; that on February 21, 1894, Bailey and his wife, to secure an alleged indebtedness due one Carrie Bailey, deeded by warranty deed a certain lot in the town of Le Mars to said Carrie Bailey, which was placed on record at or about the time of the recording of the deed of general assignment; that on or about February 19, 1894, Bailey purchased from one Woodward certain other lots in Le Mars, and agreed to pay him therefor in certain property from his stock of goods; that the title to said lot was taken in the name of Minnie Bailey, to secure an alleged indebtedness due her; that afterward Woodward assigned his claim against Bailey to one Heitsma; that about the time of the making of the deed of assignment the said Heitsma agreed to receive from Bailey certain property in satisfaction of his claim; that immediately after the filing of the deed of assignment Bailey delivered to Heitsma the property agreed upon, and in this manner settled and paid the indebtedness due Heitsma after the making and recording of the deed of assignment; that at the date of all these transactions Bailey was insolvent. Plaintiff further alleged that in the making of all these transfers Bailey intended to, and did in fact, make a general assignment for the benefit of his creditors, and that the same were made with intent to give preference to those last mentioned; that all of said instruments and transfer were intended to, and did in fact, constitute, as a whole, a general assignment of the property of Bailey for the benefit of his creditors, with preferences to certain of them; that by the conveyances aforesaid Bailey conveyed all his property, and that they were executed at the same time, and as parts of one and the same transaction, and at the time of the execution thereof Bailey was insolvent, and that he intended by the execution of such conveyances, deeds, and mortgages to make a general assignment for the benefit of his creditors, with preference to some of them, and that said transactions did constitute a general assignment with preferences to some of the creditors, and is therefore void; that in the execution of these transfers the defendant, Bailey, was guilty of fraud, and that they were all executed with intent to hinder, delay, and defraud the creditors of Bailey, in which intent Sammis participated. To this answer intervener demurred upon the following grounds: "(1) Plaintiff, by said answer, attempts to attack the general assignment, valid on its face, and the assignee's title to the assigned property, collaterally. (2) Said answer fails to state any defense to the cause of action set out in intervener's petition, for that it shows upon is face that no preference was made or intended in the execution of the assignment under which intervener claims; that it shows upon its face that the various instruments referred to in said answer were not executed at the same time, and were not parts of one and the same transaction; that all of said instruments together do not constitute a general assignment; but that said answer affirmatively shows that the several instruments referred to were executed at different times, to different parties, based upon a different consideration; and that they were executed with knowledge and consent of grantees named in the several instruments." This demurrer was sustained by the lower court, and plaintiff brings error.

I. We set out the grounds of the demurrer in full, in order that the exact questions presented by this appeal may be understood. The first one is: Was the property attached in this case, under the facts pleaded in the answer to the petition of intervener, in custodia legis, so that it cannot be taken on attachment? There is much contrariety of opinion upon the question as to whether property in the hands of an assignee is in custodia legis, and as to whether a deed of assignment may be collaterally attached; and our purpose will be to determine whether, under the facts pleaded in plaintiff's answer, the property attached was in custodia legis. Our statute (Code, section 2115) provides: "No general assignment of property by an insolvent or in contemplation of insolvency for the benefit of creditors shall be valid unless it be made for the benefit of all his creditors in proportion to the amount of their respective claims." The answer in this case recites that the general assignment in this case consisted not only of the deed of assignment proper, but the other mortgages and conveyances as well. That they were all made at practically the same time, and with the intent that all, taken together, should amount to a general assignment. That a general assignment may be made has been the universal holding of this court. Burrows v. Lehndorff, 8 Iowa 96; Cole v. Dealham, 13 Iowa 551; Van Patten v. Burr, 52 Iowa 518 (3 N.W. 524); Moore v. Church, 70 Iowa 208 (30 N.W. 855); Perry v. Vezina, 63 Iowa 25 (18 N.W. 657); Farwell v. Jones, 63 Iowa 316 (19 N.W. 241); Bank v. Crittenden, 66 Iowa 237 (23 N.W. 646); Kohn v. Clement, 58 Iowa 589 (12 N.W. 550); and other cases cited in the Digest. Whether a deed of assignment which is executed at or about the same time as other conveyances or...