37 Minn. 243 | Minn. | 1887
In December, 1884, the firm of Walker, Judd & Veazie, being insolvent, made what purported and was ini ended to be an assignment for the benefit of creditors, under the provisions of chapter 148, Laws 1881, known as the “Insolvent Law.” The as-signee entered upon the execution of his duties, took possession of the assigned property, converted it into money, and disbursed it all, except some $15,000, in payment of dividends to those creditors who had proved their claims, and filed releases, in accordance with the provisions of the statute. Most of the creditors, including the petitioners in the present proceedings, proved their claims, filed releases with the clerk of the court, and accepted dividends under the assignment. Among the creditors who declined to do so were the respondents, May and the St. Paul National Bank. In a suit brought by May against the insolvent firm, and in which he had attached, as their property, the funds in the hands of the assignee, this court decided in May, 1886, that this assignment was not valid, either under the statute or at common law, as respects a creditor who had not accepted its provisions; that it was not an assignment under the insolvent law of 1881, because it did not include the individual property of the members of the copartnership, and hence did not have the effect to place the property purporting to have been assigned in custodia legis, the jurisdictional foundation of an assignment under the statute being wanting. May v. Walker, 35 Minn. 194, (28 N. W. Rep. 252.) On May 27, 1886, the St. Paul National Bank brought suit on their claim, and attached, as the property of the debtors, the real estate
Under this state of facts, the petitioners, whose claims, less the 40 per cent, dividend received from the assignee, amounted to over $200, ■on the 25th day of June, 1886, filed a petition for the appointment of a receiver of the property of the debtors, pursuant to the provisions of the second section of the insolvent law. To this the debtors, Walker, Judd & Veazie, made no objection; but upon the objections •of the attaching creditors, May and the St. Paul National Bank, the •court below denied the application, on the ground that the petitioners “were not creditors of said Walker, Judd & Veazie,” from which decision the petitioners appealed to this court.
The principal ground urged by the respondents in support of the •order appealed from is the one upon which the court below seems to have based his decision, viz.: That the petitioners are not creditors ■of Walker, Judd & Veazie, because they had executed and filed with the clerk of the court the releases already referred to. They do not ■claim that they had ceased to be such creditors because Walker, Judd ■& Veazie had been discharged from their debts under the statute. In fact, no such discharge has ever been granted; and, if it had, it would, according to the contention of respondents, have been void, the court never having got jurisdiction under the statute. But what they claim is, in substance, that Walker, Judd & Veazie having made the assignment for the benefit of all their creditors “who shall file releases of their debts and claims, * * * as by law provided,” and the petitioners having accepted the provisions of the assignment, and filed their releases, therefore the assignment is now a binding •composition agreement between them and the debtors, which fully releases the latter. In other words, the contention is that although the assignment proves not to be what the debtors intended and proposed to make, and what the creditors assumed and intended to accept, — an assignment under the insolvent law, — the court shall give it effect as an arrangement of an entirely different nature, to wit, a •composition agreement.
This cannot be done. If parties fail to carry out and make effectual what they intended, the court cannot make an agreement
The respondents further invoke against the petitioners the doctrine of estoppel. Their contention, as we understand them, is substantially as follows: That having come in under this assignment, and accepted dividends under it, the petitioners are now estopped to deny its validity; that, as to them, it is conclusively a valid assignment of the debtors’ property, and hence they are estopped from asserting that the property attached was the property of Walker, Judd & Vea-zie, or that the latter had omitted to do any act which they might lawfully do to prevent a preference, so as to bring the case within the provisions of the second section of the insolvent act for the appointment of a receiver. In support of this position are cited numerous authorities to the familiar proposition that if creditors come in under an invalid or fraudulent assignment, and accept benefits under it, they will be estopped from afterwards attacking it as invalid. It does not seem to us that this proposition, correct as it undoubtedly is, has any application to the present case. The petitioners are not attacking, and have not attacked the assignment. That was declared
Inasmuch as the debtor Walker has withdrawn his answer, there is now no occasion to consider whether or not his motion for a change of venue should have been granted.
Order reversed.
Mitchell, J. The appeal in this case was from the order of the court below denying the motion of the petitioners for the appointment of a receiver of the property of Walker, Judd & Veazie. We held that, upon the facts, the petitioners, as creditors of the firm, were entitled to the appointment of such receiver, and therefore that the court below erred in denying their motion. The question as to the effect of the appointment and qualification of such receiver upon the garnishee proceedings previously instituted by the respondent May, against the property of the insolvent debtors, was not involved in this appeal, and was therefore neither decided nor considered.
The motion of May for a reargument is therefore denied.
Berry, J., because of illness, took no part in this case.