295 P. 490 | Colo. | 1931
A SINGLE question is here presented: Is the common law right to make an assignment for the benefit of creditors abrogated by the statutory proceeding relative to such assignments?
In November, 1928, the Betsy Ross Cafe and Candy *280 Company made an assignment, admittedly insufficient under the statute, for the benefit of its creditors to Mark Harrison, who thereupon sold the property involved to James Damaskus and Peter Coclan, plaintiffs in error, for $1,008, its actual value. About one year after this sale, the McCarty-Johnson Heating and Engineering Company, defendant in error, secured a default judgment in the justice court for $190 against the Betsy Ross Cafe and Candy Company. A garnishee summons in aid of execution was served upon plaintiffs in error, who answered that they had no property belonging to the Betsy Ross Cafe and Candy Company. A traverse was filed to said garnishee answer and trial had thereon. From a judgment of dismissal in the justice court, the McCarty-Johnson Heating and Engineering Company appealed to the county court, where judgment for $190 was entered in its favor against Damaskus and Coclan. The court held, in effect, that the assignment to Mark Harrison was void under the statute and he took no title to the property involved and conveyed none to the plaintiffs in error.
Defendant in error contends that the following cases are controlling: Kinney v. Mercantile Co.,
Sections 6242 to 6295, C. L. '21, authorize statutory assignments for the benefit of creditors and regulate the procedure thereunder. Section 6242 provides: "Any person may make a general assignment for the benefit of his creditors by deed duly acknowledged, which when filed for record in the office of the clerk and recorder of the county where the assignor resides, or if a non-resident, where his principal place of business is in this state, shall vest in the assignee in trust for the use and benefit of such creditors, all the property of the assignor, *281 excepting only such as is by law not subject to levy and sale under execution; subject, however, to all valid and subsisting liens."
[1, 2] Statutes in derogation of the common law must be strictly construed. The statute is directory and not mandatory. No mention is made in said sections of common law assignments and nothing therein contained either specifically or by implication is susceptible to the construction that these sections were intended to be an exclusive substitute for common law assignments.
In 5 C. J., page 1173, the rule contended for by the plaintiffs in error appears as follows: "The validity of assignments, except as otherwise provided by statute, is to be determined on principles of the common law, and a general assignment has frequently been held to operate as a common-law assignment, although not valid as a statutory assignment."
The identical question here presented was determined in Nolte v. Winstanley,
Lucy v. Freeman,
In Utah Association v. McConnell,
See also Campbell v. Colo. C. I. Co.,
[3] Applying the law herein stated to the facts in the instant case, the assignment to Mark Harrison was a valid common law assignment and his sale of the property thereby acquired to the garnishees, Damaskus and Coclan, at a price representing the full value thereof passed the title thereto to said garnishees. The garnishees therefore held no property belonging to the Betsy Ross Cafe and Candy Company, a Colorado corporation, judgment debtor of defendant in error, the McCarty-Johnson Heating and Engineering Company.
The county court erred in entering judgment in favor of defendant in error and against Damaskus and Coclan, garnishees, for $190. Judgment should have been entered in their favor. Accordingly the judgment is *283 reversed and the cause remanded with directions to enter judgment for plaintiffs in error.
MR. CHIEF JUSTICE WHITFORD, MR. JUSTICE BURKE and MR. JUSTICE ALTER concur.