Greenleaf v. Edes

• Decision Date: 01 January 1858
• Citation: 2 Minn. 264
• Parties: ALBERT GREENLEAF et al. vs. SAMUEL C. EDES.
• Court: Minnesota Supreme Court

2 Minn. 264

ALBERT GREENLEAF et al. vs. SAMUEL C. EDES.

Supreme Court of Minnesota.

Error to district court, Ramsey county.

This suit was commenced by Edes against Greenleaf and the sheriff of Ramsey county, to vacate and set aside the levy of an attachment, and also the levy of an execution, upon real estate, and to enjoin proceedings thereunder. The complaint alleges that on the 14th day of September, 1857, Charles W. Pairo, the owner of the real estate, conveyed it to the plaintiff, upon trusts set forth in the deed of conveyance, a copy of which is attached to the complaint, which deed, as expressed in it, is "in trust to sell the same, (the real estate,) either at private or public sale, forthwith, for cash, or on reasonable credit, as the trustee shall think most advisable," and apply the proceeds in payment of the debts of Pairo and of the firm of which he was a member. That this deed was recorded September 21, 1857. That September 19, Greenleaf commenced a suit in Ramsey county, where the real estate is situated, against Pairo, procured an attachment against his property to issue, and on the same day to be levied on the real estate. That in December, 1857, judgment was rendered in favor of Greenleaf in said suit, an execution issued thereon, and levied on the same real estate, and that under said execution and levy the defendants, (Greenleaf and the sheriff,) are about to sell the real estate.

To this complaint a demurrer was interposed, and overruled, and judgment thereon entered in favor of Edes.

Points and authorities for plaintiffs in error: —

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1. The lien of a creditor acquired by the attachment of a particular piece of land is as specific, and under similar circumstances, stands on as high equitable ground as a lien by mortgage of the same land. Carter v. Champion, 8 Conn. 549; Rev. Stat. 346-7, § 141; 5 Maine, 245; 3 Ohio, 488; 9 N. H. 48.

2. All conveyances and transfers of land, and liens created thereon, date, as to all parties except those privy to the conveyance, from the time of entering in the office of the register of deeds of the proper county for record, the instrument executed in due form of law, whereby the conveyance is made or the lien created. Rev. Stat. 211, § 1; Uhler v. Hutchinson, 23 Pa. St. 110; 24 Pa. St. 186; 25 Pa. St. 268; Magaw v. Garrett, 25 Pa. St. 319; De Vendell v. Hamilton, 27 Ala. 156.

3. Deeds of assignment for the benefit of creditors do not stand upon so high equitable ground as mortgages for the security of money, or conveyances for a valuable consideration, or liens of judgment or attaching creditors, and such an assignee is not a bona fide purchaser for a valuable consideration within the meaning of the statute. Slade v. Vanvechten, 11 Paige, 21; 3 Ohio, 488; 5 Maine, 174.

4. The deed of assignment set forth in the complaint, and which is the foundation of the cause of action of the defendant in error (plaintiff below), is fraudulent and absolutely void on its face as against the plaintiff in error. Greenleaf, who was a creditor of said Pairo at the time he executed said assignment, as appeared by the complaint of said defendant in error, for the reason that it authorized the defendant in error, in express terms, to sell the assigned property upon credit. Case, folio 23d; Brigham v. Tillinghast, 13 N. Y. 215; Kellogg v. Slauson, 11 N. Y. 302; Nicholson v. Leavitt, 6 N. Y. 510; Barney v. Griffin, 2 N. Y. 365; Burdick v. Post, 12 Barb. 168; Meacham v. Sternes, 9 Paige, 398; Minn. Stat. 1853, 22, § 2.

5. The trust created by the assignment is illegal, unauthorized, and void. An assignment that is void in part is void in toto. Mackie v. Cairns, 5 Cow. 547; 1 Hopk. Ch. 373; Harris v. Sumner, 2 Pick. 137; Tucker v. Welsh, 17 Mass. 164; Grover v. Wakeman, 11 Wend. 188; Wakeman v. Grover, 4 Paige, 24; Goodrich v. Downs, 6 Hill, 438; Barnum v. Hempstead, 7 Paige, 568; Burrill on Assignments, 231.

6. There has never been a legal record of said assignment.

Points and authorities for defendant in error: —

1. The trust deed of Charles W. Pairo to the defendant in error, set forth in the complaint in this action, was valid and effectual to pass the real estate therein described, as well before as after the record thereof, as against all parties, except only bona fide purchasers for a valuable consideration. Rev. Stat. 213, § 24; id. § 29; id. 347, § 145; id. §§ 140 and 141, sub. 1; id. 346, § 138; Green v. Mowry, 2 Bail. 163; West v. Tupper, 1 Bail. 193; Dey v. Dunham, 2 Johns. Ch. 188; Russell v. Woodward, 10 Pick. 413; State v. Bank of Maryland, 6 Gill & J. 205.

2. The plaintiff in error, Greenleaf, was not, nor was any attaching or judgment creditor of Pairo, seeking to enforce his debt out of the real estate conveyed by said deed, a bona fide purchaser within the meaning or extent of the law which protects innocent purchasers for a valuable consideration. See authorities cited under first point; also, Sparks v. The State Bank, 7 Blackf. 469; 7 Blackf. 510; 8 Blackf. 420; 4 Johns. 216; 4 Cow. 599; Com. of Sinking Fund v. Wilson, 1 Ind. 356; Brush v. Waring, 1 Bay, 90; 4 Kent, 173.

3. The power in the assignment authorizing the trustee to "sell forthwith for cash, or on reasonable credit, as the trustee shall think most advisable," does not invalidate the deed. The power to sell on credit is incident to the trust; and the creation, in express terms, of a power which is necessarily implied, cannot invalidate the deed. Nicholson v. Leavitt, 4 Sandf. 252; Rogers v. De Forest, 7 Paige, 272; Darling v. Rogers, 22 Wend. 483; Abercrombie v. Bradford, 16 Ala. 560; Ashurst v. Martin, 9 Port. (Ala.) 566; Shackelford v. P. & M. Bank of Mobile, 22 Ala 238; Gimell v. Adams, 11 Humph. 283; Gilmer v. Earnhardt, 1 Jones, (N. C.) 559; Hollister v. Loud, 2 Mich. 309; Rev. Stat. 203; Neally v. Ambrose, 21 Pick. 185; Hopkins v. Ray, 1 Met. 79.

4. Though the power to sell on credit be alleged, it does not necessarily invalidate the deed. The rule "ut res magis valeat quam pereat" applies and governs in such case. Darling v. Rogers, 22 Wend. 483; Rev. Stat. 303.

5. It does not appear from the complaint in this action that the assignment is not a general assignment; still, were it a partial assignment of a part only, for the benefit of creditors, it is equally valid as a general assignment. Burrill on Assignments, 97, and cases cited; Hudson v. Maze, 4 Ill. 578.

6. While an assignment directly to creditors requires their assent, it is now well settled, that an assignment to trustees, for the benefit of creditors, is good without their assent. Nicoll v. Mumford, 4 Johns. Ch. 523; Cunningham v. Freeborn, 11 Wend. 244; Shattuck v. Freeman, 1 Met. 10; Burrill on Assignments, 84, and 306 to 316.

Sanborn, French & Lund, for plaintiffs in error.

Wm. Hollinshead and Geo. L. Otis, for defendant in error.

ATWATER, J.

It appears from the complaint in this case, that Charles W. Pairo and wife conveyed to the defendant in error, in trust for the benefit of creditors, certain real estate in the city of Saint Paul. The deed was executed and delivered in the city of Washington (of which place Pairo was a resident) on the 14th day of September, 1857. The deed was forwarded for record in Ramsey county, and was recorded in said county on the 21st of September, 1857. On the 19th of September of the same year, a writ of attachment was issued at the instance of the plaintiff in error against the property of the said Pairo, and was levied on that day on the property conveyed by Pairo to Edes. The first question to be determined is, whether the attachment, duly served on the property before the record of the deed to the defendant in error, shall give the plaintiff a prior lien on the premises. Sec. 1, ch. 46, Rev. Stat. provides that "conveyances of lands, or of any estate or interest therein, may be made by deed, signed and sealed by the person from whom the estate or interest is intended to pass, being of lawful age, or by his lawful agent or attorney, and acknowledged, or proved, and recorded as directed in this chapter, without any other act or ceremony whatever." By the common law, conveyances of real estate did not require to be recorded, in order to render them valid even as to other than parties and privies. To what extent has the statute changed this rule? By reading the first section above cited alone, without reference to other provisions, it would seem that a conveyance of real estate could not be valid, even as between parties and privies, without record. But from a comparison of this section with other statutes upon the same subject, we are satisfied that it was not the intention of the legislature to go to this extent, but that conveyances of real estate, duly executed and delivered, pass the title without record, as against all, save bona fide purchasers for a valuable consideration. Sec. 24, ch. 46, Rev. Stat. provides that "every conveyance of real estate within this territory hereafter made, which shall not be recorded as provided by law, shall be void as against any subsequent purchasers in good faith, and for a valuable consideration of the same real estate, or any portion thereof, whose conveyance shall be first duly recorded." This section is wholly meaningless, unless the view above taken as to the effect of deeds without record be correct. The common law rule is in force unless expressly abrogated by statute, and the object of the statute seems to be only the protection of purchasers for a valuable consideration. The authorities as to the effect of deeds without record are numerous and generally uniform, and those based upon statutes like our own, establish the validity of such deeds beyond question. 4 Kent, 456, and cases cited; also, 10 Johns. 466; 3 Atk. 646; 4 Dana, 258; 10 Pick. 413.

The grantor Pairo had parted with all his interest in the real estate upon which the attachment was levied, and there was nothing to support the writ,...