58 Mich. 331 | Mich. | 1885
On and prior to January 26, 1884, Frank A. Nuggles and Frank Weston were and had been engaged as copartners, under the firm name of Nuggles & Weston, in the furniture and undertaking business, in the city of Charlotte, Michigan. On that day they executed a general assignment of all their property for the benefit of their creditors to William M. Munson, the plaintiff in this suit. An inventory was made, and on the 4th day of February a bond of the assignees, with two sureties, was filed with the clerk of Eaton county. The sureties appeared before the clerk and justified as to their responsibility, and the bond and sureties were satisfactory to the clerk, but he neglected to endorse his approval thereof upon the bond. The inventory showed the value of the assigned property to be $8324.67. The penalty of the bond was in the sum of $14,000. The assignee accepted the appointment, took possession of the assigned property, and proceeded to execute the trust, and make sales of the goods, until the 11th day of March. On that day the sheriff, at the suit of certain creditors of the assignors, levied upon the property and took it in his possession. The plaintiff demanded the property from the sheriff,
The statute relative to assignments for the benefit of creditors does not in express terms require that the approval of the clerk shall be endorsed upon the bond at the time it is filed; nor does it declare that the assignment shall be void if it is not endorsed with the clerk’s approval. The language of the proviso to How. Stat. § S739 is, “ that no such assignment shall be effectual to convey the title to the property to the assignee until such bond shall be executed, filed with, and approved by said clerk.” These three requisites were complied with in this case. The act of endorsing the approval upon the bond was merely ministerial, and could be done at any time; the approval of the bond involved an exercise of judgment and discretion, and was necessary to be exercised before the assignment would be effectual to pass the title to the assignee. So far, therefore,
The record shows a substantial compliance with this section by the assignors. It will be observed that this section makes no allusion to the penalty of the bond. Unless the bond filed by the assignee is conditioned for the faithful performance of the trust, and is filed- with and approved by the clerk, the assignment is not effectual to convey the title. When section 1 is complied with, the title passes to the assignee. The next section prescribes how it shall be acknowledged, what the inventory and list of creditors shall contain, by whom and how it shall be verified, to whom the bond shall be executed, its penalty and condition, the number of sureties, and the manner and amount in which they shall justify. A deviation from these requirements does not affect the validity of the assignment to transfer the title to the assignee, but it places it in the power of the circuit court in chancery,
It is claimed that the assignment is void because the footings of the assets, as shown by the inventory, far exceed the debts, as shown by the footings of the amount due to the creditors, and that only insolvent debtors can make a valid voluntary assignment. But we think this isa mistaken view of the law. A person may be insolvent, in the proper signification of .that term, although his assets may exceed his liabilities. A person maybe said to be insolvent when he is unable to pay his debts as they mature in the ordinary course of his business, and this seems to have been the condition of the assignors in this case. Moreover, a person, whether insolvent or not, may legally execute a conveyance of his property to'a trustee or assignee to pay his indebtedness, if he have any. Such conveyance would not be void upon its face, nor intrinsically so. Creditors could attack its validity upon the ground that it was made Avith intent to hinder, delaj- and defraud them, and unless they could establish such intent the assignment would be valid.
Counsel for defendant relies upon what Avassaid in the case of Fuller v. Hasbrouck 46 Mich. 78, as justifying the court
Attention is called to the fact that no creditor has sought the intervention of equity, and that they are assailing the validity of the assignment at law. But, as we hold that the objections urged do not affect the validity of the assignment, the point alluded to in Fuller v. Hasbrouck does not arise. Had no bond been filed, or had it not been filed until after the expiration of ten days, and not until after creditors had levied, and no proceedings had been taken in equity to enforce the trust, wo should have been called upon to decide the question whether the assignment could be assailed at law. But that is not the case here.
The judgment of the circuit court must be
Reversed and a new trial ordered.