Pleasant Hill Cemetery v. Davis

• Decision Date: 10 June 1884
• Citation: 76 Me. 289
• Parties: PLEASANT HILL CEMETERY v. ISAAC N. DAVIS AND RETIAH D. JONES, trustee.
• Court: Maine Supreme Court

76 Me. 289

PLEASANT HILL CEMETERY v. ISAAC N. DAVIS AND RETIAH D. JONES, trustee.

Supreme Judicial Court of Maine.

June 10, 1884

ON EXCEPTIONS.

This was an action of assumpsit; the principal defendant was defaulted, and the question reserved for the full court was the amount for which the trustee should be charged.

The alleged trustee disclosed an assignment to him by the principal defendant, dated November 14, 1878, under the provisions of c. 70, of the R. S. of 1871. At the May term 1879, of the probate court for Androscoggin county, the alleged trustee filed his first account and the same was settled, and the sum of $1278.63, by order of said court, was distributed to the creditors, who had become parties to the assignment. The plaintiff was not one of the parties. In that account the alleged trustee charged and was allowed " forty days time and labor in taking inventory of and selling goods, two hundred dollars." At the December term, A. D. 1879, of the probate court, the alleged trustee filed his second account and the same was duly settled, and the sum of $2095.19 was ordered distributed to the creditors who had become parties to the assignment. In that second account the alleged trustee charged and was allowed " percentage upon disbursements of $4068.36," two hundred dollars. At the time of the service of this writ, there was in the hands of the alleged trustee and now remains, the sum of $257.75, collected from the estate of said debtor in cash and certain promissory notes enumerated in the disclosure. At the time of service of the writ on the alleged trustee, all the sums due the creditors under the two orders of distribution above referred to, had been paid except fifty dollars. The alleged trustee had received from the creditors, to whom said sum was ordered distributed, their verbal orders to pay said sum to Mrs Davis, the wife of Isaac N. Davis, the debtor, and had agreed to so pay said sum. After the service of the writ upon him, he paid said sum of fifty dollars to the creditors to whom it had been ordered distributed, viz: Forty dollars to Fletcher and Company, and ten dollars to Harris and Company.

The presiding justice ruled pro forma that the said alleged trustee should be charged for $257.75, and the notes named in said disclosure, subject to a prior attachment in a suit against the same principal defendant in favor of Stetson L. Hill, now pending in this court.

To this ruling the plaintiff alleged exceptions.

N. and J. A. Morrill, for the plaintiff.

The assignment law was repealed by the insolvent law. Smith v. Sullivan, 71 Me. 150.

In Lewis v. Latner, 72 Me. 487, it was held that a person summoned as a trustee who holds goods, effects and credits of the principal defendant by virtue of an assignment under R. S., 1871, c. 70, will be charged as trustee.

The two sums of two hundred dollars each, which Jones charged and retained for services, was as much in his hands at the time of the service of the writ as the $257.75. He cannot claim it on the ground that it was allowed him by the judge of probate, for that court had no jurisdiction. Although this seems to be a new question in this state, we find two cases in Massachusetts directly in point. Bartlett v. Bramhall, 3 Gray 257; Brown v. Coggeshall, 14 Gray 134.

Counsel also insisted that the trustee should be charged for the fifty dollars which he paid two of the creditors after the service of the trustee writ, and claimed that the trustee should be charged for $707.75, and the notes named in his disclosure.

F. M. Drew, for the trustee, cited: Bump, Fraudulent Conveyances (1st ed.), 336, 422-3; Canal Bank v. Cox, 6 Me. 395; Nat. Merchants' and Traders' Bank v. Eagle Sugar Refinery, 109 Mass. 38; Brown v. Silsby, 10 N.H. 521; Guild v. Holbrook, 11 Pick. 101; Ames v. Blunt, 5 Paige 20; Jacobs v. Remsen, 36 N. Y. Ct. App. 668.

EMERY J.

The assignment in this case from the debtor Davis to the assignee Jones for the benefit of Davis' creditors was made, and the trusts executed, in accordance with the old assignment law, R. S., 1871, c. 70. If that chapter had been in force at the time, this assignment and the proceedings under it were apparently regular and valid, and the plaintiff here could only hold such surplus as might revert to the debtor after full administration. But the enactment of the new insolvent law of 1878, repealed the old assignment law of 1871, Lewis v. Latner, 72 Me. 487, and at the time of this assignment, there was no statute authorizing it, and the probate court had no jurisdiction in any proceedings under it, and could give them no validity.

The plaintiff therefore, while not claiming there was actual fraud, sufficient at common law to avoid the conveyance, does claim that this transfer of property from Davis to Jones, to administer for Davis' creditors, was void in law by force of the insolvent law, and that Jones had no right to take possession of the property, nor to administer it, and that even now, after full administration, could be charged in this process, if necessary, for all such property so taken by him. But the plaintiff, in fact, only claims that the trustee be charged, additionally, with the fifty dollars paid over to creditors since the attachment and with the amount reserved by him as compensation for services under the assignment.

This assignment was contrary to the provisions of the insolvent law, and could, of course, have been avoided at any time, and the assigned property recovered from Jones by the assignee in insolvency, if Davis had been put into insolvency and that statute set in motion. Smith v. Sullivan, 71 Me. 150. The plaintiff, however, did not invoke the aid of the insolvency statute, but resorted to a process of attachment in a common law action. This raises the question whether and how far this assignment, and the proceedings under it, can be avoided by an attaching creditor.

It is common learning that at common law an insolvent debtor could convey his property to certain of his creditors to pay them in full, and leave the others unpaid. Such a conveyance to one creditor, paying him in full, no trust being reserved for the debtor, could not be avoided by a subsequent attaching creditor. Conveyances of all or a portion of a debtor's property to trustees for the benefit of some or all of his creditors, were also early recognized in Maine and Massachusetts as valid in favor of such creditors as assented thereto, against subsequently attaching creditors. They were not considered against the policy of the law. In the absence of any statutes providing for the distribution of an insolvent's estate, such conveyances or assignments seemed to be the only means by which an insolvent could do justice to all his creditors. It seems to have been a common way of avoiding the...