3 Minn. 377 | Minn. | 1859
By the Oou/rt
The only question which we deem it necessary to examine in this case is, whether the Plaintiff in Error has confirmed the deed of trust executed by Charles W. Pairo on the 14th of September, 1857, to Samuel C. Edes, Defendant in Error, so as to preclude him from now asserting that the same was void as to creditors. The complaint alleges that Alfred Y. Scott was a creditor of the said Pairo & Nourse at the time of the execution of the deed of trust or assignment for the benefit of creditors. That on the 24th day of October, 1857, Pairo & Nourse, having reference to the indenture above mentioned and to the Plaintiff (Edes) as trustee under and by virtue of the same, addressed to the Defendant (Scott) a circular and proposition in the words and figures following, viz;
“We beg leave to call your attention to the annexed proposal, which was submitted to our creditors at their last meeting, and generally approved; but inasmuch as many of them were not present, and may not be fully informed upon the subject, we deem it proper and advisable to bring it to their notice in the present form. The extent of the authority proposed to be given, is simply to permit the trustee, with the consent and approval of some one selected by the creditors themselves, to liquidate the claims of those, and of those only who prefer so to do, by giving them lands and other securities,
' “Very respectfully,
“Pairo & Noubse.
“Washington, October 21, 1851.”
The following it the proposition referred to, viz:
“ Whereas, it has been suggested and desired by several creditors of Pairo & Nourse, that in many instances settlements may be made by a direct application of their assets, and that such an arrangement, if carried out, would greatly facilitate the liquidation of the concern; and whereas, the trustee does not consider himself sufficiently authorized to make such arrangements except at his own risk, and feels desirous that he should have some general expression of the wishes of the creditors in order to justify him in so doing— now therefore, we, the undersigned, hereby agree and consent, so far as we are concerned, that the trustee shall bo permitted and authorized to liquidate the claims of those who shall be willing to accept of such settlement, by transferring to them lands, bonds and other securities, on such terms as, in his judgment, shall be j ust and reasonable, with due regard to the claims of the creditors generally, and especially of those who prefer to await the final liquidation of the trust; provided, that in all transactions made in pursuance of the authority hereby given, no settlement shall be valid or binding except with the written consent of John II. Wheeler, or some other person selected, who shall represent the creditors for that purpose.
“ Washington, October 21,1851,”
“Washington, January 24, 1858.
“Received of S. C. Edes, assignee of Pairo & Nourse, one hundred thirty-one 3T-100 dollars, being the first dividend of ten per cent, on my claim against them, as per bank book, $1,313 TO. Alfred Y. Scott.”
“Washington, January 8, 1859.
“Received of S. C. Edes, assignee of Pairo & Nourse, one hundred and five 9-100 dollars, being the second dividend of eight per cent, on my claim against them, as per my account on their books.
“Alfred Y. Scott,
“By W. P. Williams.”
This last amount was paid on the draft of Scott upon Edes, and receipted by Williams as above written. The Plaintiff in Error commenced a suit against Pairo &, Nourse to recover his debt against them, and on the 14th of May, 1859, levied an attachment on two of the lots conveyed to Edes by the deed of trust from Pairo & Nourse of September 14, 185T. The Defendant in Error then commenced his action in the Court below, to cancel the said attachment of record, and remove the lien or cloud upon his title thereby occasioned.
The answer admits the execution of the papers above cited, by Scott, and the receipt of the two dividends therein specified, but avers that at the time the said proposition and receipts were signed, and the dividends received by him, he was ignorant of the contents of the trust deed to Edes of date of September 14th aforesaid, and had never read or seen the same, and did not know that it contained any provisions rendering it invalid as to creditors. To this answer the Plaintiff demurred, and the demurrer was sustained, and the Defendant brings writ of error to this Court.
The deed of trust above referred to, of September 14,185T, contained a provision authorising the assignee to sell on credit, apd was declared void as to creditors, by this Court, in Green-
That creditors, by their own acts, may confirm deeds or instruments, void as to them, will not be disputed. In the language of the Counsel for the Plaintiff in Error, “ we admit that where a creditor receives a benefit under an assignment, or becomes a party to it voluntarily, with a full knowledge of its provisions or circumstances rendering it fraudulent as to creditors, he is thereby estopped from afterwards impeaching it. ” And we presume that no one would contend, that the acts of the Plaintiff in Error, as set forth in the complaint, in confirmation of the trust deed, or deeds of Pairo .& Nourse, if done with knowledge of their contents, would not conclude him from objecting to their validity. He contends however, that since he was ignorant of the fact, that the first trust deed of Pairo & Nourse contained a clause rendering it void, notwithstanding his confirmatory acts, he is not estopped from treating it as void as to creditors.
We are well satisfied that the position of the Counsel for the Plaintiff cannot have the broad application claimed for it. Mere ignorance of the existence of a certain fact, will not of itself justify, or relieve from the consequences of a course of action based upon the assumption of the non-existence of such fact. It is true, that from the unguarded language of some of the authorities, it might be inferred, that where the question of the knowledge of a particular fact, affected the rights of a party, Courts will inquire simply as to the naked fact of the existence of such knowledge, in the party to be affected by it. A moment’s reflection, however, will suffice to show that such a rule cannot obtain, as it would produce the most pernicious
What are the facts in the case at bar as presented by the pleadings % Pairo & Nourse having made an assignment for the benefit of creditors on the 14th of September, 1857, on the 24th of October of the same year, addressed to the Plaintiff in Error, as one of their creditors, a written proposition, requesting his assent, with that of other creditors, to a certain disposition of the assigned property, by the Trustee. Then, at least, if not before, the Plaintiff in Error was notified of the assignment that had been made, and that the creditors of Pairo & Nourse, or some of them, had already been consulted in reference to the action of the assignee under it. And in order that all might be fully unformed u/pon the subject, the matter was brought directly home to the notice of each, by the proposition submitted. And this proposition contained a distinct agreemeent and consent on the part of the creditors signing the same, that the trustee should proceed under the assignment, to dispose of certain property conveyed by the trust deed, in the manner suggested by Pairo & Nourse. Now, there was of course no obligation on the part of the Plaintiff in Error to sign the proposition submitted to him. It was his own voluntary act, and no coercive measures were taken, or motives offered, to induce him to consent to the proposition. And if he chooses to assent to the proposal, without informing or seeking to inform himself of the contents of the deed of trust, that is his own matter. But if so, he must be held to the consequences of his own act. And if those consequences be
The Plaintiff in Error claims that his action in signing the ■ proposition referred to, and in accepting the dividends under the assignment, was based upon the supposition that the assignment from Pairo & Nonrse to Edes was a valid assignment, that he was justifiable in entertaining such belief, and the instrument having been declared void, no assent to the transaction can be implied, or have any binding force from his action in the premises. In other words, that the Plaintiff in Error had the right to suppose that the conveyance from Pairo & Nonrse to Edes was by an instrument of such a nature as the Courts would sustain, whenever and wherever attacked by creditors, and if the contrary should be held, then he should be absolved from the natural consequences of his own acts, so far as they regarded the assignment. Such is not the language of the Counsel, but seems a proposition justly deducible from his argument. It is not, however, consonant with sound reason or
On the argument, some stress was laid on the fraudulent character of the assignment in question, and of measures adopted by the Defendant, of which the Plaintiff had no knowledge, and had no reason to intend, at the time of the doing of the acts which are claimed as a ratification of the conveyance from Pairo & Nourse to Edes. We would not be understood as saying that had actual fraud been practiced to induce the Plaintiff in Error to sign the proposition and accept the dividends, that he would be bound by those acts. Not only was no fraud used to cause the Plaintiff to adopt the course he pursued, but the acts of Pairo & Nourse, so far as presented by the record, seem to have been done in good faith, and with reference to the best interests of the creditors. Nor was the assignment itself declared void as to creditors, for fraud in fact, hut in law. And without entering into any examination of the precise meaning of the terms, which has been the subject of much discussion, we consider the distinction sufficiently obvious for our present purpose. Probably the Plaintiff in Error never dreamed that the assignment was void on account of the provision authorising the trustee to sell on credit, until this Court so declared it. The objection comes too late to entitle it to much weight.
The case of Bernheimer vs. Marshall & Co., 2 Min. R. 78,
That the acceptance of dividends under an assignment, is an assent to, and confirmation of such assignment by the creditor has been uniformly held. Merrill vs. Englesby, 28 Vt. 150; Geise vs. Beal, 3 Wis. 367; Adlum vs. Yard, 1 Rawle 163; 11 Gill & Johnson, 314; Lanaham vs. Lathrop, 7 Md. Rep. 268; 7 Paige 615. Indeed, the counsel for the Plaintiff in Error, concedes the proposition as a general rule, but claims . that it does not apply to the case atbar, inasmuch as the*Plaintiff was ignorant of the contents of the trust deed at the time he accepted the dividends. As the Court hold this objection not well taken, the rule consequently applies to the Plaintiff in Error, and he is estopped from denying the validity of the assignment, and cannot be permitted to attach the assigned property for the purpose of satisfying the balance of his claim.
But there is another principle, or rather, another reason
The counsel for the Plaintiff in Error urges, that “ the dividends reduced the Plaintiff’s claim that much, and it was what he was entitled to, and could have seized and held notwithstanding the assignment.” But he was not entitled to them wider the assignment, if the position of the counsel is now correct, that that instrument is void, and it was under the assignment that he received them. And although he might perhaps have seized them, as remarked, notwithstanding the assignment, yet he chose to waive that right and receive them under the assignment, and must now be bound by the legal consequences of that act, until he purges himself from all complicity or connection with the fraudulent conveyance by an offer to return whatever he has received under it. It is admitted that the acts of the Plaintiff in signing the proposition, and receiving the dividends, would have been a confirmation of the assignment, had the Plaintiff known the contents of the trust deed. But he did know the contents before he commenced this suit, and with that knowledge he here and now