Moore v. Cushing

• Decision Date: 24 November 1911
• Parties: MOORE v. CUSHING et al.
• Court: Minnesota Supreme Court

116 Minn. 142

133 N.W. 561

MOORE

v.CUSHING et al.

Supreme Court of Minnesota.

Nov. 24, 1911.

Appeal from District Court, Ramsey County; Hascal R. Brill, Judge.

Action by Russell L. Moore against Luther S. Cushing and others. From an order denying a new trial after an order for judgment for plaintiff, defendant C. A. Bettingen appeals. Affirmed.

Syllabus by the Court

A common-law assignment for the benefit of creditors, which requires a release of the debtor in consideration of the right to participate in the proceeds of the trust, is invalid as to creditors not assenting to the same. May v. Walker, 35 Minn. 194, 28 N. W. 252, followed and applied.

A creditor who does not assent to such an assignment may attack it in any appropriate proceeding, and is not required to resort to bankruptcy or insolvency proceedings.

Subdivision 6, s 3249, R. L. 1905, held not applicable to assignments for the benefit of creditors, but intended by the Legislature to authorize trusts of an entirely different character. Walter L. Chapin, for appellant Bettingen.

Russell L. Moore, for respondent.

BROWN, J.

The facts in this case are clearly stated in the findings of the trial court, and are substantially as follows:

On February 1, 1910, plaintiff recovered a judgment against Joseph A. Hurley in the municipal court of the city of St. Paul for the sum of $367.31, upon an indebtedness in favor of plaintiff and against Hurley existing at the time of and long prior to the assignment by said Hurley of all his property to defendant Bettingen for the benefit of creditors, hereinafter to be mentioned. Execution upon the judgment has been issued and returned unsatisfied. On March 12, 1908, by a deed of express trust in writing, duly filed and recorded, Mark J. Fitzpatrick and Thomas Fitzpatrick & Son, contractors doing business in the city of St. Paul, duly conveyed and transferred to defendants Cushing, Berry, and Poppenberger, in trust, certain real property situated in Ramsey county, for the benefit of the creditors of said Fitzpatricks, and said defendant as trustees have converted the property into money, and now hold the same as such. Hurley was at the time of that assignment a creditor of the Fitzpatricks, was a party to that proceeding, and is entitled to the sum of about $1,000 as his proportion of the money realized by the trustees. Plaintiff by this action seeks to subject this fund to the payment of his judgment, and he is entitled to the relief, unless the rights of defendant Bettingen are superior. The present controversy is therefore between plaintiff and Bettingen. The asserted rights of Bettingen are founded upon the following facts:

On January 21, 1910, Hurley was and had been for many years a resident of St. Paul, and was then insolvent and unable to pay his debts, and is still insolvent. On the date named he entered into an agreement with defendant Bettingen, by the terms of which, after reciting the Hurley indebtedness and his inability to pay the same, Hurley assigned to Bettingen all property owned by him, not exempt from execution, for the benefit of all creditors who should subsequently assent thereto. The assignment provided for the payment of all expenses incident to the administration of the trust, all taxes and preferred claims, and that the residue be paid to the assenting creditors upon their executing to Hurley a release from all liability for any balance remaining unpaid. In form and substance the agreement amounts to an assignment for the benefit or creditors, and the record discloses that the property assigned is wholly insufficient to pay the debts. A list of creditors, with the amount of their respective claims, was attached to and made a part of the assignment, and also a schedule of the property transferred. Bettingen accepted the trust, took possession of the property, and is now engaged in administering the same. He claims in this action the amount coming from the Fitzpatrick trust, and that his right thereto is superior to that exhibited by plaintiff. Plaintiff at no time assented to this transfer of Hurley's property, and never became a party to the trust proceedings. The assignment was never filed with the clerk of the district, and Bettingen never executed a bond for the faithful discharge of his duties as trustee. The trial court held the assignment invalid as to all nonassenting creditors, and ordered judgment for plaintiff, and defendant appealed from an order denying a new trial.

[3] The most that can be said of the assignment to Bettingen is that it was valid either as a...