Valley Lumber Co. v. Hogan

• Decision Date: 23 May 1893
• Citation: 55 N.W. 415,85 Wis. 366
• Parties: VALLEY LUMBER CO. v. HOGAN ET AL.
• Court: Wisconsin Supreme Court

85 Wis. 366

55 N.W. 415

VALLEY LUMBER CO.

v.HOGAN ET AL.

Supreme Court of Wisconsin.

May 23, 1893.

Appeal from circuit court, La Crosse county; A. W. Newman, Judge.

Action by the Valley Lumber Company against Donald A. McDonald and Charles M. McDonald, partners as McDonald Bros. James J. Hogan was garnished by plaintiff. Judgment was rendered against defendants and the garnishee, and the latter appeals. Reversed as to garnishee.

The other facts fully appear in the following statement by PINNEY, J.:

The defendant Hogan was summoned by the plaintiff in this action as garnishee of Donald A. McDonald and Charles M. McDonald, partners, etc., and as being indebted to them, and having possession and control of property belonging to them. Judgment was rendered against the principal debtors, and the sole question was whether the defendant Hogan was liable to the plaintiff as garnishee upon the following facts, namely: On the 14th of October, 1891, the defendants McDonald Bros. mortgaged lumber then in their possession, of the value of $11,000, to the garnishee, Hogan, to secure a debt of $10,000 and interest, and at the time it was agreed between them that the mortgage should not be put upon the record except on failure of McDonald Bros. to pay the notes it was given to secure at their maturity, 30 and 60 days from said date. The indebtedness to the plaintiff upon which its judgment was rendered against McDonald Bros. was a loan of $5,000, obtained by them from the plaintiff November 23, 1891, in good faith, and upon the faith, strength, and representation that their property was not incumbered. On the 17th day of December, 1891, Hogan filed his mortgage, and took possession of the property covered by it, and has ever since held it. The plaintiff had no notice of the existence of the mortgage when it made the loan to McDonald Bros., nor until it was so filed, and the mortgage was kept from the record to prevent any injury to the credit of McDonald Bros. The court, as a conclusion of law upon these facts, held that the mortgage to the defendant Hogan of October 14, 1891, was void as to the plaintiff, and gave judgment charging the latter, as garnishee, for the lumber so taken by him under his mortgage. From a bill of exceptions it appears that McDonald Bros. executed to George H. Ray a general assignment, which was filed in the office of the clerk of the circuit court of La Crosse county on the 17th day of December, 1891, four hours after the garnishee defendant so filed his mortgage and took possession of the lumber, and he requested the court to rule that the action should be brought only by the assignee, or in his name, for the benefit of creditors, and that the present action should be dismissed, but the court declined to so rule, and exception was taken by Hogan. The assignment was given in evidence, but no finding was made in respect to it, and no exception was taken to the finding. The garnishee appealed from the judgment.Thomas A. Dyson and Lusk, Bunn & Hadley, for appellant.

E. C. Higbee, for respondent.

PINNEY, J., (after stating the facts.)

1. It is contended on behalf of the respondent that, as the finding of the court contains all the facts necessary to charge the garnishee, and does not make mention of the general assignment to Ray, and as no exception was taken to the finding, the record does not present any question for review, and that the judgment must be affirmed. The facts stated in the bill of exceptions, and the request that the court should rule that the action should have been brought only by the assignee, as well as the exception to the refusal of the court to so rule or find, have been made and are a part of the record, as well as the finding of the court. The request was substantially to find that upon all the evidence the action could not be maintained, and the exception to its denial presents the question whether upon the whole record the plaintiff was entitled to bring and maintain the action. Although there may be no exception to the finding, an erroneous refusal to find may be excepted to and made available as ground for reversal of the judgment.

2. It is provided by the statute (chapter 80, § 1693, Sanb. & B. St.) that “the circuit court, or the judge thereof in vacation, shall have the supervision of the proceedings in all voluntary assignments made under the provisions of this chapter, and may make all necessary orders for the execution of the same.” This chapter provides, in substance, that the assignment, with bond of the assignee, together with an inventory of assets and list of creditors, is to be filed with the clerk of the circuit court of the county where the assignor resides. Notice is to be given of the making of the assignment to all creditors of the assignor to file their claims by a day named, or be barred from all dividends; and the merits of any claim may be litigated upon objections filed, and a trial by jury may be had, and an appeal taken from the order made thereon to the supreme court. Creditors not filing their claims may be barred, and debts to become due, as well as debts due, may be allowed with rebate of interest to the time of making dividend, which the assignee may pay, or it may be ordered by the court; and the accounts of the assignee are to be settled upon notice before the court, when the assignor may file his petition therefor, and obtain a discharge from his debts, as provided by chapter 385, p. 541, Laws 1889. Chapter 170, p. 566, Laws 1882, provides that in all cases of voluntary assignments made 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 assignments, 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 bring and maintain an action to avoid such fraudulent conveyances and transfers.” In Vernon v. Upson, 60 Wis. 423, 19 N. W. Rep. 400, it was said that this statute “makes the assignee the representative of creditors in respect to all fraudulent transfers of property by the assignor, and gives the assignee the right to maintain actions to avoid the same.” Chapter 349, p. 309, Laws 1883, was enacted to prohibit debtors giving preferences, and to secure the equal distribution of property assigned for the benefit of creditors, and the assignee in any such assignment is granted “all the powers thereunder necessary to institute any action or proceeding to set aside and avoid any levy, sale, mortgage, hypothecation, lien, or other security” named in the act. In Batten v. Smith, 62 Wis. 92, 98, 22 N. W. Rep. 342, in speaking of the two acts cited, ...