6 Iowa 61 | Iowa | 1858
— It was not necessary for the garnishees to have the judgment by default against them set aside, in order to enable them to answer; for by mere failure to appear in answer to the garnishee summons, they were not liable to pay the amount of the plaintiff’s judgment against Bowman, until they had had opportunity to show cause against the issuing of an execution. Code, section 1870. The judgment having been opened, however, and the garnishees permitted to answer, showing the amount of money and property in their hands, and the manner in which it was held, the proceedings against Shaw, one of the defendants, should have been dismissed. He was not one of the assignees under the deed. He was acting under the orders of his co-defendant, Sanders; and if there was any of the property of Bowman in his hands, it was subject to Saunders’ order and control. All this is shown by the answers of Shaw and Saunders. The deed of trust is made part of the answer of Saunders, and he explicitly declares that he claims to hold the money and property in his hands, by virtue of the deed, and for the benefit of all the creditors of Bowman. The facts contained in this answer, the same not being controverted, are
The deed, it is urged by the plaintiffs, is void as to the creditors of Bowman, as not being in compliance with the statute, and for the reason that the design and effect of the same is to hinder and delay them in the collection of their debts. We think there can be no question but that the deed is made upon a sufficient consideration. The debts due from Bowman to his creditors were a valuable consideration, in the highest sense of the term. Burrill on Assignments, 219. It was not necessary that there should be a consideration passing from Saunders to Bowman. Saunders was the mere trastee of the creditors,'? whose debts were designed to be secured by the deed. Where possession accompanies the conveyance of personal property, it is not necessary that the deed should be acknowledged and recorded. In this case, the possession of the goods, both in law and in fact, was in Saunders ; and it is not, under such circumstances, a valid objection to the deed, that it was not duly acknowledged and recorded.
The deed of assignment is not drawn with that regard to forms, nor with that accuracy of expression, at all times desirable in such instruments. A strict observance of the proper legal terms, and the apt use of words, generally, while it always tends to prevent confusion and misunder
It is insisted upon by the plaintiff, that the conveyance is invalid, for the reason that, being a general assignment of property, for the benefit of creditors, it does not provide for the payment of their claimsjprc rata, but for their payment “ as fast as they become due;” which, it is claimed, is in derogation of -that-provision of the Code, which requires that the assignment shall be made for the benefit of all creditors of the grantor, in proportion to the amount of their respective .claims. Code, sec. 977. It is true, that it is not expressly stipulated or directed in the deed, that the claims of the several creditors are to be paid jpro rata; but even if it is conceded that the grantor designed that they should be paid as their debts became due, it is by no means a necessary inference from the language used, that he intended they should be paid in full, in the order of their falling due. Such an inference might be a legiti
It is further insisted by plaintiffs, that the effect of the deed is to hinder and' delay creditors, in the collection of their debts, and that the same is therefore fraudulent and void, for the reason that the grantor has not stipulated that the goods shall be sold by the assignee for cash only; but that by authorizing him “ to take such steps for the sale and disposal of them as he may deem proper,” it permits him to sell them on credit. In New York, it has been determined, that ,a clause in a deed of assignment expressly empowering the assignee to sell on credit, avoids the whole assignment, its tendency and effect being to hinder and delay creditors. Barney v. Griffin, 2 Comstock, 365; Burrill on Assignments, 197, 198. The contrary doctrine has, however, been held in Alabama. Abercrombie v. Bradford, 16 Alabama, 560; Ashurst v. Martin, 9 Porter, 566. In this case, no express power or direction has been given to the assignee, to sell on credit; and no intent to hinder and delay creditors, can justly be inferred from the authority given to the assignee “ to take such steps as he may deem proper for the sale and disposition of the goods.”
As to the objection that the grantor has not, by the deed, conveyed all his property, for the benefit of his creditors, we can only say that it does not appear that the grantor has any property not embraced by the conveyance.
It is a sufficient reply to the objection, that the assignee is offering to sell the goods on credit, and to exchange them for country produce, that no neglect of duty by the assignee, and no misapplication of the trust fund, will render the conveyance void. It is at any time within the power of the creditors, to require the assignee to report to the district court, the condition of the trust estate, the names of the creditors, and the amount of the debts, as far as ascertained. So, the assignee may be required to give bond for the faithful performance of the trust; and if he has been negligent of the performance of his duty, or wasteful of the trust property, he may be removed from his position, and another assignee appointed in his stead.
There is no pretence that the plaintiff’s claim is not as fully provided for by the assignment as that of any other creditor. It will be paid like others at the proper time, by the assignee, and if the property conveyed is not sufficient to pay the debts in full, they must expect to share with the other creditors pro rata. It is only a question whether they shall be thus paid, or whether the deed of trust shall be declared invalid, and they permitted to claim payment in full. It certainly recommends itself to our sense of fairness and equality, that the insolvent’s property be divided ratably among all his creditors. There may be
Judgment reversed.