Fuller v. Hasbrouck

• Decision Date: 27 April 1881
• Citation: 46 Mich. 78,8 N.W. 697
• Court: Michigan Supreme Court
• Parties: FULLER and another v. HASBROUCK and another.

8 N.W. 697

46 Mich. 78

FULLER and another v. HASBROUCK and another.

Supreme Court of Michigan

April 27, 1881

Under the statute in regard to assignments for the benefit of creditors, (Gen.Laws 1879, p. 181,) failure of the assignee to file his bond within the 10 days' limit does not render the assignment absolutely void, so that the property may become liable to attachment immediately upon such failure; but the court may, upon proper application, proceed to the enforcement of the trust through a receiver. What would be the rule in case of such assignment, where the assignee takes no steps indicating an acceptance by him of the trust, not decided.

Appeal from St. Joseph.

D.C Page, Charles Upson, and H.H. Riley, for complainants.

H.C Briggs and George L. Yaph, for defendants.

COOLEY J.

The question in this case is one of construction of the "Act to provide for the regulation and enforcement of assignments for the benefit of creditors," approved May 13, 1879. Gen.Laws 1879, p. 181. The first section of the act provides "that all assignments commonly called common-law assignments for the benefit of creditors shall be void unless the same shall be without preferences between such creditors and shall be of all the property of the assignor not exempt from execution, and unless such instrument of assignment, or a duplicate thereof, an inventory of the assigned property, a list of the creditors of the assignee, and a bond for the faithful performance of the trust by the assignee shall be filed in the office of the clerk of the circuit court of the county where such assignor resides, or, if he is not a resident of this state, then of the county where the assignee resides; if neither are residents of the state, then of the county where the assigned property is principally located, within 10 days after the making thereof. Such assignment shall convey to the assignee all property of the assignor not exempt from execution, and all rights, legal and equitable, of said assignor: provided, that no such assignment shall be effectual to convey the title to the property of the assignor to the assignee until such bond shall be executed, filed with and approved by said clerk: and provided further, that no attachment or execution levied upon any assigned property of such assignor, after such assignment and before the expiration of the time provided herein for filing such bond, shall be valid or create any lien upon such property."

The second section gives specific direction respecting the inventory, list of creditors and bond; the third declares that "every such assignment shall confer upon such assignee the right to recover all property, or right or equities in property, which might be reached or recovered by any of the creditors of such assignor;" the fourth provides for notices to creditors, and the fifth for the filing by the assignee of periodical reports. The sixth and last section is as follows: "In case there shall be any fraud in the matter of said assignment, or in the execution of said trust, or if the assignee shall fail to comply with any of the provisions of this act, or fail or neglect to promptly or faithfully execute said trust, any person interested therein may file his bill in the circuit court in chancery of the proper county for the enforcement of said trust; and the court in its discretion may appoint a receiver therein, and the court shall have power to order the summary examination before himself, or a circuit court commissioner of any party or witness, at any stage of said cause, relative to the matters of said trust, and enforce attendance and the giving of testimony therein, in the same manner as in the trial of causes in such circuit courts in chancery."

The defendants Richard E. Hasbrouck and James Hill, composing the mercantile firm of Hasbrouck & Hill, doing business at Mendon in St. Joseph county, on the tenth day of January, 1881, made a general assignment for the benefit of their creditors to Orlando J. Fast. The assignment purported to give no preferences. Appended to it was a list of unsecured creditors and also a list of debts amounting to $5,841.38, which were represented to be secured by chattel mortgages. Fast accepted the trust, took possession of and invoiced the property, and gave due notice to the creditors. He failed, however, to give the bond required by the statute. Immediately on the expiration of the ten days several of the creditors sued out attachments, which they caused to be levied upon the property, and the secured creditors also took...