Lucy v. Freeman
| Decision Date | 04 November 1904 |
| Parties | LUCY v. FREEMAN. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Redwood County; B. F. Webber, Judge.
Action by John A. Lucy against R. R. Freeman. Judgment for plaintiff. From an order denying a new trial, he appeals. Reversed.
1. A trust deed from an insolvent debtor to plaintiff of all his property, coupled with an agreement on plaintiff's part to convert the same into money and pay and discharge the insolvent's debts, construed, and held to constitute in effect a common-law assignment for the benefit of creditors, and valid between the parties thereto and subsequent purchasers of the property with notice of the deed.
2. The right of a debtor to make a commonlaw assignment for the benefit of his creditors exists independent of statute.
3. A failure to comply with the provisions of Gen. St. 1894, § 4227, relating to assignments for the benefit of creditors, does not render such an assignment absolutely void, but only voidable at the instance of creditors and subsequent purchasers in good faith. Fred B. Dodge, C. R. Fowler, and Korns & Johnson, for appellant.
W. G. Owens, Somerville & Olsen, and Clague & Emerson, for respondent.
Action in claim and delivery, which was dismissed on trial after plaintiff had rested, and the latter appealed from an order denying his motion for a new trial.
The facts are as follows: One Dittbenner was a merchant owning a stock of general merchandise and doing business at Revere, this state. He was considerably in debt, and unable to meet his obligations, and executed and delivered to plaintiff in this action a trust deed of all his stock of merchandise, all his accounts, bills receivable, and certain real property owned by him, in consideration that plaintiff should take possession of the same, sell and dispose of it at public or private sale with all reasonable diligence, collect the claims and demands due on the bills receivable, and pay and discharge in full, after payment of all expenses, if the residue of the funds was sufficient, all debts and liabilities due from Dittbenner to such creditors as should thereafter become parties to the transaction, and who should, in consideration of the premises and execution of the trust deed, participate therein and agree, upon payment being made, whether in whole or in part, of the amount due them, to fully release and discharge Dittbenner from further obligation to them. The deed further provided that if the proceeds of the property and collection of bills receivable were insufficient to pay Dittbenner's debts in full, after paying the expenses of plaintiff as trustee, the amount remaining in his hands should be paid pro rata to the creditors who should become parties to the agreement. The deed was executed by Dittbenner and his wife in the manner prescribed for the execution of deeds of real property, but was not recorded in the office of the register of deed until after the controversy in this action arose, nor was there any attempt to comply with the provisions of section 4227, Gen. St. 1894, relating to assignments for the benefit of creditors. It was delivered to plaintiff and retained by him until after defendant obtained his alleged title to part of the goods covered by the deed to be presently referred to. There was no change of possession of the property from Dittbenner to plaintiff; by an arrangement between those parties Dittbenner continued in possession thereof, and the management of his store, precisely as though no transfer of his property had been made. Subsequently Dittbenner entered into a contract with defendant by which he sold and delivered to him, for a valuable consideration, part of the goods and property covered by the trust deed to plaintiff, under which defendant now claims the superior title. That contract expressly provided that the sale of the property to defendant was ‘subject to the conditions of a certain trust deed of incumbrance thereof made to J. A. Lucy, dated on the ___ day of December, 1903, not...
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...A. 193; Geer v. Traders' Bank of Canada, 132 Mich. 215, 93 N.W. 437; Maloney & Co. v. Gonhue, 152 Mich. 325, 116 N.W. 436; Lucy v. Freeman, 93 Minn. 274, 101 N.W. 167.) though the business is continued, the provision does not make the assignment or transfer void or illegal. (Rochester v. Su......
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Boyum v. Jordan
...the assignment was valid between the parties to it, the deed of assignment contained provisions which made it void under Lucy v. Freeman, 93 Minn. 274, 101 N. W. 167, and Moore v. Bettingen, 116 Minn. 142, 133 N. W. 561, Ann. Cas. 1913A, 816, as to any nonassenting creditor who might see fi......
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Boyum v. Jordan
... ... Although the assignment was valid between the ... parties to it, the deed of assignment contained provisions ... which made it void under Lucy v. Freeman, 93 Minn ... 274, 101 N.W. 167, and Moore v. Bettingen, 116 Minn ... 142, 133 N.W. 561, Ann. Cas. 1913A, 816, as to any ... ...
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