Willis v. Bremner

• Decision Date: 15 May 1884
• Court: Wisconsin Supreme Court
• Parties: WILLIS v. BREMNER.

60 Wis. 622

19 N.W. 403

WILLIS

v.BREMNER.

Supreme Court of Wisconsin.

Filed May 15, 1884.

Appeal from the circuit court, Milwaukee county.

The firm of Brearly & Adams, doing business as manufacturers in the city of Racine, becoming insolvent, made a voluntary assignment of their partnership property (not exempt from seizure on attachment or execution) to the plaintiff, for the benefit of their creditors. Jonathan B. Brearly and H. Kirke Adams were the partners composing such firm. The assignment was executed November 9, 1882. On the fourteenth of the same month several creditors of the firm sued out writs of attachment on their respective claims, and placed the same in the hands of the defendant, who was then the sheriff of Racine county, for service. The defendant, as such sheriff, seized the assigned property by virtue of such writs. The plaintiff (the assignee) thereupon brought this action against the sheriff, for the conversion of the property so seized, to recover the value thereof. The defendant, by his answer, justified under the writs of attachment. He also set out the assignment in his answer, and alleged that the plaintiff's only interest in the property in controversy was derived therefrom, and that the same was executed by Brearly & Adams with intent to hinder, delay, and defraud their creditors. The assignment prefers certain alleged debts by providing that they shall be first paid out of the proceeds of the assigned property. One of these preferences (the only one necessary to notice) is as follows: “The Manufacturers' National Bank of Racine, Wis., $1,000. The said $1,000 being evidenced by two promissory notes, of $500 each, signed and executed by H. Kirke Adams, and indorsed by H. D. Adams, of Beloit, Wisconsin, dated respectively August 22, 1882, and August 22, 1882, and due respectively in 90 days and in 4 months from the date thereof; it being intended hereby to prefer said promissory notes due or owing said bank by said H. Kirke Adams, upon which said H. D. Adams is indorser, and none other.” The cause was tried, and at the close of the testimony the court held that the plaintiff was entitled to recover the value of the property seized. The jury assessed such value at $13,803.28, for which sum judgment for the plaintiff was entered. The defendant appeals from the judgment.Hand & Flett and J. G. Jenkins, for respondent, John H. Willis.

Fish & Dodge, for appellant, George Bremner.

LYON, J.

In the case of Vernon v. Upson, ante, 400, we hold that a voluntary assignment by an insolvent firm for the benefit of its creditors, which assignment contains preferences in favor of creditors of the individual partners, is void as against the unpreferred creditors of the firm who repudiate the assignment. To the same effect is the recent case of Powers v. C. H. Hamilton Paper Co. 18 N. W. REP. 20. The reasons upon which such ruling is based are sufficiently stated in the opinion in Vernon v. Upson, and need not be repeated here.

The assignment of Brearly & Adams in the present case prefers the Manufacturers' National Bank in respect to an indebtedness of $1,000, evidenced by two promissory notes, amounting to that sum, made by H. Kirke Adams, (who was a member of the assigning firm,) and indorsed by H. D. Adams, of Beloit. Looking at the terms of the assignment alone, this is clearly a preference in favor of the bank of the indebtedness to it of H. K. and H. D. Adams, evidenced by their notes. Indeed, the emphatic language of the assignment is that the assigning firm intended thereby “to prefer said promissory notes due or owing said bank by said H. Kirke Adams, upon which said H. D. Adams is indorser, and none other.” The instrument of assignment contains no statement or intimation that the firm of Brearly & Adams were parties to the notes, or had assumed or become liable to pay them, or that it ever had any interest in the proceeds thereof, or anything whatever to do with them. Hence it shows on its face a preference in favor of a creditor of one member of the assigning firm, and another person not a member thereof, for the payment out of the proceeds of the firm property of their individual debt to the bank, before the unpreferred creditors of the firm (including the attached creditors) would be entitled to any portion of such proceeds. This brings the assignment within the rule of Vernon v. Upson, supra, and renders it invalid ( prima facie, at least) as against the attaching creditors of the firm, represented by...