41 Minn. 116 | Minn. | 1889
On May 24,1884, the defendant Wells was indebted^ to various persons in a sum exceeding $79,000, and had also incurred a liability arising upon a large number of wheat “tickets” or receipts, issued by him as warehouseman, and calling for over 10,000 bushels of wheat, of the value of $7,603, at the then market price-Of these tickets enough to represent 1,000 bushels were owned by the other defendant, Palmer. Wells’s assets, including wheat in store in his elevator, valued at $3,942, and for which a part of the-aforesaid tickets had been issued, were of the estimated value of' $33,942. The elevator building, including the tract of ground upon which it stood, valued at $7,000, and the proceeds of a sale, for-$8,000, of some certificates of stock held by Wells, were the only-available assets, the balance of his property being heavily incumbered. On the day mentioned Wells turned over to Palmer the wheat in store, in trust for those who held his wheat tickets; also by proper-conveyance transferred to him his interest in two tracts- of mortgaged land, and the title in fee to the elevator and the land upon.
As will be seen by examination, the questions now brought to our attention were not presented upon the first appeal. Upon the second trial but one issue was submitted to a jury, namely: “When Wm. S. Wells transferred and conveyed the real estate, property, and money to JEL H. Palmer, in May, 1884, did Palmer have reasonable cause to believe that Wells was insolvent ?” This was answered in the affirmative; whereupon the court made and filed findings covering other facts, and as a conclusion of law directed that judgment be entered for defendant. The plaintiff appeals from the judgment thereafter rendered.
The insolvency act has been before this court many times since its enactment in 1881, but there is now demanded of us a construe
The grain and warehouse law now under consideration has many anomalous features, the result, perhaps, of necessity. But the evils it strives to correct, and the practices it endeavors to remedy, are quite apparent. It must be construed with its purposes in mind, and with a view to fairly promote its objects. Unless otherwise provided in plain terms, its several sections must be considered in connection with other statutes, — the result, as is this, of the needs and demands of rapidly growing business interests. It certainly was not written in opposition to any part of the insolvency law. To say that the remedy prescribed is exclusive, because it is novel, or because it denominates that transaction a bailment which has heretofore been declared a sale, is perhaps to cripple and obstruct, and not to promote and advance, the interests of the very class of men it was designed to aid and assist. Although pronouncing the delivery of grain for storage a bailment, the statute yields to the imperative demands of the warehouse business by recognizing that the grain deposited must be intermingled, that additions are of daily occurrence, and shipments almost as frequent. It places the grain
In anticipation of the foregoing conclusion, the respondent contends that, to bring any transaction within the prohibition of the statute, the person to whom the transfer is made must, at the time of the transfer, be a creditor in a strictly technical sense, having and holding an immediately provable claim, a pre-existing debt against the insolvent, according to the word “debt” as used in this connection, — its most limited and narrow construction, — or that he must be a person resting under a liability in behalf of the insolvent; and that Palmer, although the holder of wheat receipts issued by Wells, was not a creditor, nor Hid he, nor did any holder of a like receipt, have a pre-existing debt, within the intent and meaning of the law, which, in defiance of its terms or otherwise, could be preferred. To state the argument in another form, it is that until the holder of such receipts has ascertained by action the amount he is entitled to recover by reason of default upon the part of the bailor, and has reduced his claim to a judgment, he is not a creditor, and consequently has no
The court below evidently concluded that the relation of debtor and creditor did not exist between the warehouseman, Wells, and either of the holders of his receipts, and also that, as there was nothing in the case tending to indicate that, when making the transfer and conveyance, Wells knew that Palmer held any of his wheat receipts, the same could not have been made “with a view” to paying or securing the latter, and for that reason not forbidden. The object of the insolvency act is to secure an equal distribution of the property of an insolvent debtor among his creditors, as is apparent from its title, and such interpretation must be given it as will further its purpose. Simon v. Mann, 33 Minn. 412, (23 N. W. Rep. 856.) There certainly can be no distinction between a preferential conveyance to a creditor directly and a preferential conveyance to him and for him through a third person, for the effect is the same. It has already been declared by this court, in proceedings against an insolvent, that the manner in which the preference complained of by the petitioning creditors is accomplished is immaterial, if the fact itself be established upon the hearing. In re Stevens, 38 Minn. 432, (38 N. W. Rep. 111.) Nor can it make any difference if Wells did not know, at the time of the alleged wrongful transfer, that Palmer held some of his receipts; for the transaction was “with a view” to providing for others, — for all who held receipts, — and not for Palmer alone. Clearly, the plaintiff’s right to recover depends upon the actual relations which existed, under the circumstances of this case, between Wells, the insolvent warehouseman, and the persons for whose benefit the trans-' fer and conveyance were made. Were they creditors, within the spirit and meaning of the act of 1881? If so, the jury having de
In Wilder v. Peabody, 37 Minn. 248, (33 N. W. Rep. 852,) it was held that a claim for rent, not payable in advance under the lease, where the lessor had not enjoyed the use of the leased premises, was not an existing demand, provable under chapter 148, 'supra. The rent might not become due, for the lessee might be evicted or the premises become untenantable. The very existence of the demand depended upon a contingency. In such a case the landlord could in no sense of the word be decided a creditor, and the reason is obvious. In Mohr v. Minn. Elevator Co., 40 Minn. 343, (41 N. W. Rep. 1074,) this court had occasion to adopt and approve Bouvier’s defi-. nition of a creditor, in proceedings in insolvency. It is one, he says, “who has a right to require the fulfilment of an obligation or contract.” In this large sense it means more than a person to whom money may be owing. Burrill states that “ the word ‘debt.’ is of large import,” and that, properly speaking, it “includes all that is due to a man under any form of obligation or promise;” and Lord Coke, in commenting upon the signification of the word “debitum,” as used in the statute of Merton, c. 5, avers that “debitum signifieth not only debt for which an action of debt doth lie, but here in this ancient act of parliament it signifieth generally any duty to be yielded or paid.” 2 Inst. 89. The same meaning is ascribed in Frazer v. Tunis, 1 Bin. 254; Ram, Assets, (2d Ed.) 3; 2 Williams, Ex’rs, 915.
Palmer and others held Wells’s obligations or contracts to account for more than 10,000 bushels of wheat, valued at above $7,000. On the day he executed and delivered the instruments involved in this litigation, he had in store, with which to redeem receipts, only half the amount of wheat necessary for the purpose. He was hopelessly and irretrievably a bankrupt. He was preparing to depart from beyond the jurisdiction of the state, and next day removed to an adjoining territory. To illustrate the situation, should it be held that the holders of these receipts were not of the creditors mentioned in the law, let us suppose that the money and property (aside from the wheat)
Finally, it is suggested that, as Palmer acted as an agent or trustee simply in the disbursement of the money, which was all paid out before this suit was begun, he must be exonerated. If his liability ever accrued, it was at the time he received the deed and order. It cannot be made to depend upon a contingency, such as the character in which he may be acting, or the time within which he completes the preference by disbursement of the money.
The judgment appealed from is reversed, and the case remanded to the district. court, with orders that judgment be entered for the plaintiff in accordance with the views herein expressed.
Gilfillan, C. J., being absent because of illness, took no part in this case.