Merrill v. Ressler

• Decision Date: 13 June 1887
• Citation: 33 N.W. 117,37 Minn. 82
• Parties: MERRILL AND OTHERS v RESSLER AND ANOTHER.
• Court: Minnesota Supreme Court

37 Minn. 82

33 N.W. 117

MERRILL AND OTHERSvRESSLER AND ANOTHER.

Supreme Court of Minnesota.

June 13, 1887.

(Syllabus by the Court.)

An assignee under the provisions of chapter 148, Laws 1881, may avoid transfers and mortgages of chattels by the debtor assignor, when creditors of the assignor could avoid them.

A clause in a lease of real estate, reserving to the lessor a lien for the rent on the goods and chattels of the lessee placed on the demised premises, to be enforced on non-payment of the rent, as in case of a chattel mortgage, by taking possession and sale of the property, is in its nature and effect a chattel mortgage, at least in equity, and the lease comes under the provisions of the statute requiring chattel mortgages to be filed.

Appeal from district court, Winona county.

Gould & Snow, for Merrill and others, respondents.

Wilson & Bowers, for Ressler and another, appellants.

GILFILLAN, C. J.

January 17, 1884, plaintiffs rented to the defendant Ressler a store building in Winona, for two years from March 1, 1884, at the rent of $75 per month. In the lease was this stipulation: “And it is also understood and agreed between the parties aforesaid that the party of the first part shall have a lien for the rent aforesaid upon all the goods and chattels of the party of the second part which are or may be placed upon the said demised premises, and such lien may be enforced, on the non-payment of the rent aforesaid, in the same manner as in case of a chattel mortgage, on default thereon, by taking possession of said property, and selling the same at public auction after ten days' notice of such sale.”

Ressler went into possession under the lease, and remained in possession during the term of the lease, and put in the store a stock of merchandise and other property, and the same remained in the store until they were taken into possession by defendant Choate. April 13, 1886, Ressler made to Choate, pursuant to the provision of chapter 148, Laws 1881, a general assignment of all his property for the benefit of all his creditors. Choate thereupon accepted the trust, duly qualified as assignee, and, as such, took possession of the assigned property, including the stock of goods and other property in the store, and, as such assignee, purposes to dispose of the same in the execution of his trust. On March 1, 1886, there was due of rent, under the lease, $375, which has not been paid. The assignee refused to pay it unless proved in the insolvency proceeding and pro rata with the other debts proved, and refused to recognize any lien therefor on the stock of merchandise and other property in the store. The lease was never filed as a chattel mortgage.

On this statement of the case arise two questions of law: First, can an assignee, under chapter 148, Laws 1881, avoid transfers and chattel mortgages of the assignor which the latter's creditors can avoid? Second, was the lease, so far as it gave the lessors a lien on the personal property, in effect a chattel mortgage, in such sense as to bring it within the requirements, as to filing, of chapter 39, Gen. St. 1878?

We may say that the assignee alleges other grounds, besides failure to file, for avoiding the claim of plaintiffs; but, in the view we take of the case in the matter of filing, it is unnecessary to speak of their effect. The decision of this court in Farmers' Loan & Trust Co. v. Minneapolis Engine & Machine Works, 29 N. W. Rep. 349, is nearly decisive upon the first of these questions. That was the case of a receiver of an insolvent corporation, appointed under chapter 76, Gen. St. 1878. We held that the receiver may avoid any transfers void as to creditors. The proceeding under chapter 76 is analogous to that under chapter 148, Laws 1881. Its purpose is the same, to-wit, to take the assets of the debtor applicable to payment of debts, and appropriate them to that purpose. But if there could be any doubt as to the power of a receiver under chapter 76 to avoid transfers void as to creditors, it could not exist as to the power of an assignee or receiver under chapter 148. Section 7, of that chapter makes applicable to assignees and receivers appointed under the chapter all laws of a general nature applicable to receivers and assignments, not in conflict with the provision of the chapter. This makes applicable the provisions of section 27, c. 41, Gen. St. 1878, which reads: “That, in all cases of general assignments for the benefit of creditors, the assignee or assignees shall be considered as representing the rights and interests of the creditors of the debtor or debtors making the assignment, as against all transfers and conveyances of property which would be held to be fraudulent or void as to creditors, and shall have all the rights which such creditors would have to avoid such fraudulent conveyances and transfers.”

This is conclusive of the right of the assignee to avoid such a claim as the plaintiffs make, if the creditors could have avoided it.

As to the second of the questions, there was no claim at all upon the property, unless the stipulation in the lease was, in effect, a chattel mortgage. If it amounted only to a license, or power to take possession and sell, and apply the proceeds to payment of the rents, not coupled with an interest in the property, it would...