Brahmstadt v. McWhirter

• Decision Date: 01 July 1879
• Citation: 2 N.W. 232,9 Neb. 6
• Parties: JOHN BRAHMSTADT AND HENRY C. KLEINSCHMIDT, A FIRM DOING BUSINESS UNDER THE NAME OF BRAHMSTADT & KLEINSCHMIDT, AND FREDERICK W. LIEDTKE, PLAINTIFFS IN ERROR, v. WILLIAM MCWHIRTER, DEFENDANT IN ERROR
• Court: Nebraska Supreme Court

2 N.W. 232

9 Neb. 6

JOHN BRAHMSTADT AND HENRY C. KLEINSCHMIDT, A FIRM DOING BUSINESS UNDER THE NAME OF BRAHMSTADT & KLEINSCHMIDT, AND FREDERICK W. LIEDTKE, PLAINTIFFS IN ERROR, v. WILLIAM MCWHIRTER, DEFENDANT IN ERROR

Supreme Court of Nebraska

July 1, 1879

ERROR to York county district court, where the cause was tried before POST, J. The opinion states the case.

Judgment of the district court reversed and cause dismissed.

France & Sedgwick, for plaintiffs in error, cited Townsend v Stearns, 32 N.Y. 209. Gay v. Bidwell, 7 Mich 519. Norton v. Kearney, 10 Wis. 443. Hoffman v Mackall, 5 Ohio St. 124. Sackett v. Mansfield, 26 Ill. 21. Grover v. Wakeman, 11 Wend., 187. Coverdale v. Wilder, 17 Pick. 181. Mann v. Witbeck, 17 Barb., 392. This case does not come within the rule laid down in McCleery v. Allen, 7 Neb. 21. In this case, the selling and disposing of the property are left entirely to the discretion of the assignee; but that discretion is to be exercised within legal limits; and the law implies a restriction not inserted in express words, and will not defeat an instrument by inferring that the assignor contemplated an illegal act. Kellogg v. Stauson, 11 N.Y. 302. Nye v. Van Husan, 6 Mich. 329. Whipple v. Pope, 33 Ill. 334. Higby v. Ayers, 14 Kas., 331. Hoffman v. Mackall, 5 Ohio St. 124. Whitney v. Krows, 11 Barb., 198. Southworth v. Sheldon, 7 How. Pr., 414. Ang. on Assignments, 209, 215. Burrill on Assignments (2d ed.), 217, 220. The assignment is not void because the assignee was clerk of the district court, and as such clerk filed and approved the bond of himself and sureties. The validity of the assignment does not depend upon the bond of the assignee, and the assignment is valid, even if the assignee should fail to give any bond, as the district court has control of the assignee, and can dismiss him from the trust if he refuse to give a bond as required by law; and to hold this assignment void would be to give the creditors preference, instead of preventing such preference. Session Laws, 1877, page 25. Heckman v. Messinger, 49 Pa. 465. Beck v. Parker, 65 Pa. 265. Price v. Parker, 11 Iowa 144.

Scott & Giffen, for defendant in error, cited 2 Parsons on Contracts, 505. Hutchinson v. Lord, 1 Wis. 349. Schufeldt v. Abernethy, 2 Duer, 533. The assignment in this case clearly gives an authority to sell on credit, for it gives the assignee the same powers of disposition over the property as the assignors. A sale is either for cash or upon credit, and the terms of a sale mean the space of time granted the debtor to discharging his obligation; and in conveyances, the time of paying the consideration. Le Roy v. Beard, 8 How., 451. Hutchinson v. Lord, 1 Wis. 249. Bov. Dict., title "Terms." The assignment is void also, not simply because the clerk filed and approved the bond of himself and sureties, but because the assignee is clerk of the district court. The two positions of assignee and clerk of the court are so far inconsistent with each other, that it is against the policy of the law that the clerk should act in such capacity; and under the law of 1877 he would frequently have to issue process against himself, and perform many other acts where the two positions would be directly opposite. Laws, 1877, p. 24, secs. 8, 10, 15, and 18.

OPINION

MAXWELL, CH. J.

The plaintiffs were a firm doing business at York, in this state, and being unable to pay their debts in full, made an assignment for the benefit of their creditors to Frederick W. Liedtke, clerk of the district court of York county. The defendant, who was a creditor of the plaintiffs, commenced an action against them by attachment, in the county court of York county. The county court sustained the attachment, which judgment was affirmed by the district court. The plaintiffs bring the cause into this court by petition in error.

But two questions are involved in the case: First, Is the assignment void on its face as to creditors? Second, Can the clerk of a district court act as assignee?

The deed of assignment recites that: "Whereas the said co-partnership is justly indebted in sundry considerable sums of money, and has become unable to pay and discharge the same with punctuality or in full, and the said parties being desirous of making a fair and equitable distribution of all their property and effects among their creditors, now therefore," etc. The assignment also contains this provision: "The said party of the second part (the assignee) shall take possession of all and singular the lands, tenements, and hereditaments, property, judgments, and effects hereby assigned, and sell and dispose of the same, and generally convert the same into money upon such terms and conditions as in his judgment may appear just and for the interest of all parties concerned."

It is claimed that this provision renders the instrument void on its face. It will be perceived that the authority is to convert the property into money, not to sell upon credit. The words "terms and conditions," taken by themselves, might imply an authority to sell on credit, but construing the entire instrument, it is...