Maclaren v. Kramar

• Decision Date: 21 November 1913
• Citation: 26 N.D. 244,144 N.W. 85
• Parties: MACLAREN v. KRAMAR, Sheriff.
• Court: North Dakota Supreme Court

26 N.D. 244

144 N.W. 85

MACLAREN

v.KRAMAR, Sheriff.

Supreme Court of North Dakota.

Oct. 7, 1913.

On Petition for Rehearing, Nov. 21, 1913.

Syllabus by the Court.

A purported general assignment for the benefit of creditors, which contains a provision directing the assignee or trustee, after converting the property into cash, “to distribute the proceeds of said property ratably among the creditors of the party of the first part as shall consent to this trust agreement, and shall agree in consideration of the benefits accruing to them thereunder, to absolve and discharge the party of the first part from any and all liability,” construed, and held void upon its face as an unlawful attempt by the debtor to coerce his creditors to surrender a portion of their just claims as a condition to receiving their just share of the estate, and tends directly to delay and hinder them in the collection of their claims.

Such purported assignment is also held to be void for the reason that it does not purport on its face to transfer all of the debtor's unexempt property, and provides for the payment to the debtor of any surplus which may remain in the trustee's hands after satisfying the claims of the assenting creditors, thus operating to put such surplus beyond the reach of nonassenting creditors, and to hinder and delay them in the collection of their demands.

The defense of justification under judgment and execution constitutes new matter, and must be pleaded in the answer in order to avail defendant as a defense.

Where testimony tending to show such justification under an answer amounting merely to a general denial is promptly objected to when offered and exceptions preserved, the pleadings cannot, after the trial, be amended to conform to the proof introduced under such objection; nor does the allowance thereafter of the service and filing of an amended answer, pleading such justification, operate to avail defendant, where no proof is thereafter offered in support of such amended answer.

On Petition for Rehearing.

Additional Syllabus by Editorial Staff.

That the plaintiff, in an action against a sheriff for conversion of property seized under execution against a third person, unnecessarily stated in his complaint particulars regarding the method of conversion, and that plaintiff knew of the capacity in which, and the process under which, defendant seized the property, did not broaden the issues so as to permit a defense of justification under a general denial.

Appeal from District Court, McHenry County; A. G. Burr, Judge.

Action by C. D. MacLaren, as trustee for the benefit of creditors of Wellington I. Ginther, against D. A. Kramar, sheriff of McHenry county, N. D. From judgment for defendant, plaintiff appeals. Reversed and rehearing denied.Pierce, Tenneson & Cupler, of Fargo, for appellant. Christianson & Weber, of Towner, for respondent.

FISK, J.

This is an action to recover for the alleged conversion by defendant, Kramar, who was sheriff of McHenry county, of certain personal property claimed to belong to plaintiff, and which such sheriff levied upon under an execution issued on a judgment against one Wellington I. Ginther, wherein the First National Bank of Waterloo, Iowa, is the judgment creditor. Pursuant to such levy the defendant took the property into his possession, and subsequently sold the same at public auction to satisfy the amount called for by the execution. The property consisted of a portion of a general stock of merchandise and one new Cary safe located in a store building at Drake, in this state, and formerly owned and conducted by the execution debtor, Ginther. Plaintiff bases his claim to ownership of the property upon a certain so-called trust deed or assignment for the benefit of creditors, executed and delivered by Ginther to the plaintiff, as trustee, some time prior to the levy of such execution by defendant. The complaint is in the usual form, and the answer as originally interposed amounts to a general denial. By stipulation of the parties a jury was waived, and the cause tried to the court, resulting in findings of fact and conclusions of law in defendant's favor, pursuant to which, judgment was ordered and entered dismissing the action, with costs. The appeal is from such judgment.

Appellant's brief contains a large number of assignments of error based upon alleged erroneous rulings in the admission and exclusion of testimony, also in permitting defendant to file an amended answer after the trial, and in making certain findings of fact, but in the body of the brief counsel present and argue but two propositions: First, they contend that the assignment or trust deed is valid and cannot be attacked or avoided by a nonassenting creditor; and, second, that in any event it is necessary for the defendant to place himself in the position of a nonassenting creditor before he can question the validity of the trust deed, and that he failed so to do by not properly pleading justification. It is argued that not having pleaded justification under the judgment and execution, permitting the introduction of the judgment roll, transcript, and docket entries, constituted reversible error, and that this was not cured by thereafter permitting an amended answer to be filed wherein such justification is pleaded. We shall accordingly confine ourselves to the points thus argued in the brief, treating as abandonment all assignments not thus argued in accordance with the well-settled practice of this court. The case being one properly triable to a jury, the findings of fact have the force of the verdict of a jury, and, no motion for a new trial having been made, the sufficiency of the evidence to support the findings is not in question. The cause is here on appeal, therefore, for the review only of alleged errors of law occurring at the trial (Hedderich v. Hedderich, 18 N. D. 488, 123 N. W. 276), and, as before stated, only those alleged errors will be noticed which are argued in the brief.

[1] This brings us to appellant's first contention. The so-called trust deed, and which appellant contends is valid and operated to transfer title to the plaintiff, is as follows: “This agreement, made and entered into in duplicate this 13th day of August, 1909, by and between Wellington I. Ginther, of Drake, North Dakota, party of the first part, and C. D. MacLaren, of St. Paul, Minnesota, party of the second part, witnesseth: Whereas, the party of the first part is indebted to sundry and divers persons in large amounts and is unable to pay and discharge said indebtedness as the same becomes due, and desires to place his property in the hands of the party of the second part to be realized upon in the best manner possible and the proceeds therefrom distributed ratably among his creditors. Now, therefore, in consideration of the premises and the sum of one dollar to him in hand paid, the party of the first part does hereby grant, convey, assign, transfer and deliver unto the party of the second part, as trustee, all of that stock of hardware, tinware, leather and other findings, harness, tinner's tools, machinery and other personal property belonging to him and contained in and about that certain store building located in the village of Drake, North Dakota, and situated upon the south half of lot 11, and all of lot 12, in block 2, of the village of Drake, in the county of McHenry, and state of North Dakota, including book accounts and books of account, bills receivable, choses in action. Also to convey by proper deed of conveyance all his interest in the above-described lots and the building situated thereon, to have and to hold the same and all thereof, as trustee for the use and purpose following: To convert said personal property into cash in such manner as in his judgment will be for the best interest of all parties concerned, and for that purpose party of the second part is hereby authorized to continue the business of the party of the first part at said village of Drake, so long as it shall seem profitable so to do, and for that purpose may use proceeds from sales and collections to buy new goods to replenish the stock, and out of the proceeds of the sales of the property and collection of accounts to pay, first, the reasonable charges and expenses for creating and administering the trust hereby created. Second, to pay in full the debts and liabilities of the party of the first part, if sufficient shall be realized from the property so to do, and if not, to distribute the proceeds of said property ratably among the creditors of the party of the first part as shall consent to this trust agreement, and shall agree, in consideration of the benefits accruing to them thereunder, to absolve and discharge the party of the first part from any and all liability. Third, if there should be any residue of the property after making the disbursements and payments aforesaid, to repay or return to the party of the first part all property then remaining in the hands of the party of the second part. The party of the first part in consideration of the premises and the benefits to be derived under this trust agreement further agrees to and with the party of the second part, that as soon and whenever the order of the district court of Ransom county, North Dakota, dated August 5th, 1909, entered in the action of Ginther v. Ginther, restraining the party of the first part from disposing of his real property, shall be vacated, the party of the first part will, by proper conveyance, convey to the party of second part all his right, title and interest in and to the real estate now owned by him, or in which he has any interest, except the family homestead. In witness whereof, the parties have hereunto set their hands the day and year first above written. Wellington I. Ginther. C. D. MacLaren.”

It will be noticed that such alleged assignment or trust deed does not purport on its face to transfer to the trustee all of the property...