Clark v. B. B. Richards Lumber Company
| Decision Date | 19 May 1897 |
| Docket Number | 10,626--(234) |
| Parties | MELVIN J. CLARK v. B. B. RICHARDS LUMBER COMPANY and Another |
| Court | Minnesota Supreme Court |
Appeal by Duluth Trust Company, as assignee in insolvency of defendant lumber company, from an order of the district court for St. Louis county, Moer, J., denying a new trial, after findings that plaintiff was entitled to the sum of $ 258,632.25 under the contract mentioned in the opinion and to a first lien upon certain lumber cut under that contract, and upon all the standing pine timber covered by said contract and directing a sale of the standing timber and of the lumber. Reversed.
Order reversed and a new trial granted.
Cotton Dibell & Reynolds, for appellant.
That the assignee may enforce the rights of the general creditors see Cragin v. Carmichael, 2 Dillon, 519; Kane v Rice, 10 N. B. R. 469; In re Leland, 10 Blatchf. 503; Mitchell v. McKibbin, 8 N. B. R. 548; Pratt v. Curtis, 6 N. B. R. 139; Edmondson v. Hyde 7 N. B. R. 1; Bradshaw v. Klein, 1 N. B. R. 542; Glenny v. Langdon, 98 U.S. 20; Trimble v. Woodhead, 102 U.S. 647; Moyer v. Dewey, 103 U.S. 301; Thomas v. Foote, 46 Minn. 240; Walton v. Eby, 53 Kan. 257; Chapin v. Jenkins, 50 Kan. 385; Southard v. Benner, 72 N.Y. 424. That an agreement or understanding not to file the instrument is a material fact, and postpones such instrument until satisfaction of the claims of creditors who extended credit upon the belief and faith that the property of the insolvent was owned free from any claim or adverse title, see Standard v. Gunther, 67 Wis. 101; Sanger v. Gunther, 73 Wis. 354; Flemington v. Jones, 50 N.J.Eq. 244; Chapin v. Jenkins, supra; Goll v. Miller, 87 Iowa 426.
Cash, Williams & Chester, for respondent.
The assignee representing the creditors generally stands in the shoes of the assignor simply and is not a purchaser in good faith. See Dyer v. Thorstad, 35 Minn. 534; Thomas v. Foote, 46 Minn. 240; Shay v. Security, 67 Minn. 287, 69 N.W. 920. The agreement was one for the sale of an interest in land, and governed wholly by the registry act pertaining to real estate. Pine v. Tozier, 56 Minn. 288; Lillie v. Dunbar, 62 Wis. 198; Bent v. Hoxie, 90 Wis. 625; Bent v. Barnes, 90 Wis. 631. As to estoppel of the vendor to assert title, see Trenton v. Duncan, 86 N.Y. 221; Turner v. Coffin, 12 Allen, 401; Andrews v. Lyons, 11 Allen, 349; Plumer v. Lord, 9 Allen, 455; Allum v. Perry, 68 Me. 232; Zuchtmann v. Roberts, 109 Mass. 53; Robb v. Shephard, 50 Mich. 189; Parker v. Moore, 59 N.H. 454; Hefner v. Vandolah, 57 Ill. 520; Howe v. Farrington, 82 N.Y. 121; Board v. Otis, 62 N.Y. 88; Pickard v. Sears, 6 A. & E. 469; Clinton v. Town, 50 Conn. 84; New York v. Rothery, 107 N.Y. 310; Kuhl v. Mayor, 23 N.J.Eq. 84; Sutton v. Wood, 27 Minn. 362; Pence v. Arbuckle, 22 Minn. 417; Lowry v. Mayo, 41 Minn. 388; Stuart v. Lowry, 42 Minn. 473; Nell v. Dayton, 43 Minn. 242; Welsh v. Cooley, 44 Minn. 446; Stevens v. Ludlum, 46 Minn. 160; Irish v. Ludlum, 49 Minn. 344. In the absence of a statutory provision an assignee for the benefit of creditors stands solely in the shoes of his assignor, and has no higher right than the assignor himself, and as such can not set aside any transfer or conveyance of his made by his assignor in fraud of creditors or otherwise. Flower v. Cornish, 25 Minn. 473.
OPINION
On November 2, 1894, the plaintiff and the defendant lumber company executed the contract which is made a part of the complaint herein, whereby the plaintiff agreed to sell, and the lumber company to buy, all of the pine timber standing on certain lands owned by the plaintiff in the county of Carlton, Minn., for the sum of $ 265,000. The lumber company paid the purchase price by $ 250 in cash, and the balance, $ 264,750, by its eight promissory notes, with annual interest at six per cent., due at different times, the first on or before December 1, 1894, and the last on or before December 1, 1898. The right to enter upon the lands and cut and remove the timber at any time within ten years was given to the lumber company by the contract, but it also contained the following conditions and restrictions:
This contract was filed in the office of the city clerk of Duluth, the place of the lumber company's sawmill and principal office, on September 24, 1896, and not before. The lumber company made default in its payments under this contract, and on November 17, 1896, it made an assignment for the benefit of its creditors under the insolvency laws of the state, to the defendant trust company, at which time it had in its possession a large quantity of lumber manufactured from logs cut pursuant to the contract. Thereafter the plaintiff brought this action to have it determined that he was the owner of the remaining pine timber upon the lands described in the contract, and that he was the owner of all of the lumber in possession of the defendants manufactured from the logs cut from his land pursuant to the contract, and to have the contract annulled. The defendant trust company, among other defenses, alleged, substantially, the following:
That at the time of the execution of the contract, and as a part of the same transaction, it was mutually agreed between the parties thereto that the provisions thereof reserving title in the vendor should not be made public, and that the contract should not be filed or recorded, in order not to injure or interfere with the business of the lumber company. * * * That the lumber company, with the knowledge of plaintiff, cut the timber, and manufactured it into lumber, and sold the same, as the owner thereof, as if free from any claim or lien in favor of plaintiff, and as its regular course of business, from the time the contract was executed to September 24, 1896. That the insolvent at all times during its operations under the contract was in exclusive and undisputed possession of the product of the timber at its yards in Duluth, in all respects as the apparent owner thereof, as if free from incumbrance or claim of any kind. That no part of the logs or lumber manufactured from the timber was ever set apart, separated, marked, or designated as in the contract provided, or otherwise, and that insolvent controlled and dealt with the same in all respects as its own property, all of which facts plaintiff at all times knew. That the present existing creditors of the lumber company, to the amount of $ 40,000, gave credit to it without any notice of plaintiff's claim of title, and in reliance upon the apparent absolute ownership of the lumber company of the lumber so in its possession, and in the belief that it was such owner.
These allegations were put in issue by the reply. On the trial and at the close of the evidence the trust company submitted to the court findings in its favor on these issues, which the court refused on the ground that they were immaterial, and the defendant excepted to the ruling as to each finding. The trial court made findings in favor of the plaintiff, and ordered judgment accordingly, and the trust company appealed from an order denying its motion for a new trial.
The defendant assigns 72 alleged errors, but the only ones which we find it necessary to discuss are those relating to the refusal of the trial court to find upon the issues to which we have referred. The evidence as to them was not such as to require the court to find thereon as requested in favor of the defendant; hence, if the trial court had simply declined to find as requested, it would have been necessary for the defendant, in order to base error on the court's refusal to find as to the issues, to have specially requested the court to find thereon one way or the other. But the court having refused to find on the issues in favor of the defendant on the sole ground that they were immaterial, its counsel was not bound longer to contend with the court and request it to pass upon issues it had decided to be immaterial. The trial court made no findings whatever as to these issues. The question then is, were these issues immaterial? The answer involves a consideration of three minor questions: (a) The construction of the contract. (b) The effect on the rights of the plaintiff of the alleged agreement to conceal the terms...
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