Lord v. Devendorf

54 Wis. 491 | Wis. | 1882

'Cassoday, J.

In our opinion the assignment is not void upon its face by reason of the following clause: “shall, with all convenient diligence, sell and dispose of the same at public or private sale, as he may deem most beneficial to the interests of the creditors of said party of the first part, and convert the same into money.”

In Hutchinson v. Lord, 1 Wis., 294, the particular words which'rendered the assignment void were: “In such manner, either at public or private sale, and upon such terms and for such prices, as to the said party of the second part shall seem advisable;” and those which further expressly exempted the assignee from all liability, “ while acting in good faith.” The court in that case put particular stress upon the words in italics.

In Keep v. Sanderson, 2 Wis., 42, the words which avoided the assignment were: “ To sell and dispose of the assigned property upon such terms and conditions as in their judgment may appear best and most to the interest of the parties concerned.”

In Norton v. Kearney, 10 Wis., 443, it was held that “an assignment in which the assignee is ‘ to dispose of the property to the best advantage, in his'discretion,’ is valid, and does not imply an authority to sell on credit.” Dixon, C. J., distinguishing that case from Hutchinson v. Lord and Keep v. Sanderson, supra, said: “We are of the opinion that the discretion here vested must be understood as a legal discretion; that is, a discretion to be exercised within the limits which the law fixes in such cases. There is ample room for the exercise of this discretion without transcending any rule of law.” The second case of Keep v. Sanderson, 12 Wis., 352, turned upon the same language as the first, and was decided the same way, and the opinion clearly distinguishes it from Norton v. Kearney. .The above cases are harmonized by Ryan, C. J., in his dissenting opinion in Bound v. Railroad Co., 45 Wis., 574, 575.

In the case before us there is nothing said about “ terms and conditions,” nor “prices,” but the assignee is required to sell and dispose of the property and convert the same into money with all convenient diligence, and such sale and disposition is to be “ at public or private sale,” as he may deem most beneficial. The thing thus left to his discretion is, whether, he will sell at public or private sale, and not whether he will sell for cash, or on credit or otherwise. The assignment does not purport to cover the property of the old firm of Devendorf & Penn, but only the property of Devendorf. It is true that the accounts and debts due ¿he old firm were, subsequently to the assignment, scheduled'in Exhibit D, but no such exhibit appears to be referred to in the assignment. Whether the assignee can take any interest in the assets of the old firm to the prejudice of the creditors of the old firm, is a question not here presented, as no such assets appear to have been attached. It would seem that “the -rule of equity is uniform and stringent, that the partnership property of a firm shall all be applied to the partnership debts, to the exclusion of the creditors of the individual members of the firm, and that the creditors of the latter are to be first' paid out of the sepa'rate effects of their debtor, before the partnership creditors can claim anything.” Jackson v. Cornell, 1 Sandf. Ch., 348. See also Kirby v. Schoonmaker, 3 Barb. Ch., 46; Nicholson v. Leavitt, 4 Sandf. S. C., 307; S. C. reversed, 2 Selden, 510; Wilson v. Robertson, 21 N. Y., 587; Forbes v. Scannell, 13 Cal., 242; Nye v. Van Husan, 6 Mich., 329.

The mere fact that there were firm assets and firm creditors did not, however’, prevent Devendorf from assigning his property and preferring his individual creditors to the firm creditors. In the absence of any statute to the contrary, there can he no question but that an Insolvent debtor may pay one creditor in money or property in preference to another. Spring v. Ins. Co., 8 Wheaton, 268. This right of the debtor to prefer results from the absolute ownership of property. Brashear v. West, 7 Pet., 608. This absolute ownership implies the absolute right of disposition. In the absence of the bankrupt law or any statute to the contrary, there can be no doubt but that an insolvent debtor, when assigning his property for the benefit of his creditors, may, in good faith, prefer one or more to others. Such being the law, it follows that an intent to defraud cannot be inferred from the mere fact of Devendorf making a general assignment for the benefit of his creditors, nor from the mere fact that in such assignment he preferred some of his creditors to others, nor from the mere fact that he turned’out property in payment of certain of his creditors after the levy of the attachment and before the execution of the assignment. Section 2731, R. S., authorizes a writ of attachment to issue, even though the plaintiff or person making the affidavit in his behalf only had “good reason to believe ” one of the things therein mentioned; but where it is traversed, and the same is tried by the court under sections' 2745-6, R. S., the affirmative of the issue is upon the plaintiff. In such a case, the finding of the circuit court against the plaintiff as to the existence of the fact itself will not be disturbed unless there is a clear preponderance of the evidence against it. Rice v. Jerenson, ante, p. 248; Davidson v. Hackett, 49 Wis., 186.

Such being the established rule of law, it only remains for us to consider whether there is such clear preponderance of evidence in this case. True, it appears from the evidence that Devendorf put off the plaintiff’s attorney from day to day for some weeks by mere promises, which it 'would seem he had little or no expectation, and probably no present capacity, of fulfilling; but that of itself does not establish fraud. So it appears that he had for some months prior to the assignment contemplated going to the Red river country, in Dakota, and there going into farming, and that he had for that purpose acquired several horses.and other property suited to the business. If at the time he fully comprehended and properly appreciated the amount of his indebtedness, and the real value of his property, it is difficult to perceive how he could expect to pacify his creditors sufficiently to make such a change without their interference. True,, the mere change of locality would not of itself establish an intent to defraud, although it might be a circumstance strongly tending to evince a purpose to hinder and delay creditors in the collection of their debts; and if it had been shovfn in addition that the purpose was to take advantage of more liberal exemption laws, and to convert property not exempt into property which was exempt, the inference of the intent to defraud his creditors would be irresistible. But such is not the evidence. Besides, the purpose of going to the Red river country was no secret; on the contrary, it had for several months been talked about by Devendorf in the store, and frequently in the presence of large numbers of the citizens of Platteville, and must have been generally known in the neighborhood. The more charitable view would be that Devendorf was inefficient as a business manager, and, having good credit, heedlessly, and without comprehending his true financial circumstances, allowed himself to drift into the condition in which he was subsequently found. Whatever may be the real motive, we are constrained to hold that there is not such a clear preponderance of the evidence of an intent on the part of Devendorf to defraud his creditors as would warrant this, court, under the rule already established, to reverse the order and set aside the finding of the court below.

By the Court.— The order of the circuit court is affirmed.