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Juliand v. Rathbone

Court of Appeals of the State of New York
Jun 1, 1868
39 N.Y. 369 (N.Y. 1868)

Opinion

June Term, 1868

S.S. Merritt, for the respondent.

Rexford Kingsley, for the appellant.



The respondent's counsel insists, that the judgment in the present case is not appealable to this court, and cites Van Bergen v. Bradley ( 36 N.Y. 316) in support of his position. The cases are not analogous. In the latter, the judgment was entered upon the verdict, without any order therefor by the General Term. In the present case, the judgment was rendered upon the order of the General Term. It was, therefore, appealable to this court, without any further proceedings in the Supreme Court. This case was regarded by the Supreme Court as involving the question, whether an observance of sections two and three of chapter 348, Laws of 1860, by the assignor and assignee, respectively, within the time therein prescribed for the performance of the acts required, was necessary to the validity of the title of the assignee to the assigned property. That court held these sections directory, and, consequently, that non-compliance with their provisions, within the time prescribed, did not impair the title of the assignee. In this, I cannot concur. The first section of the act provides, that the assignment shall be duly acknowledged by the assignor, and the certificate thereof duly indorsed, before delivery to the assignee. Section two of the act provides, that the assignor shall, at the date of the assignment, or within twenty days thereafter, make, and deliver to the judge of the county of his residence, a schedule, verified by him, as prescribed by the act, containing a full and true account of all his creditors, and their residences, as far as known; the sum owing to each creditor, and the nature of the debt, and how it arose; the consideration of the debt, and place where it arose; a statement of any security for any debt; an inventory of all his estate, and the incumbrances thereon, if any, and of the value of such, according to the best knowledge of the debtor. Section three provides, that the assignor shall, within thirty days after the date of the assignment (and before he shall have power or authority to sell, dispose of, or convert to the purposes of the trust, any of the assigned property), enter into a bond with sureties, as prescribed by the section. In construing these two latter sections, the Supreme Court, as appears from the opinions delivered, applied the rule adopted in the construction of statutes, prescribing the time for the performance of official acts by public officers, in the performance of which the public have an interest. In construing these latter statutes, it is well settled, that, where the act prescribes a time for the performance of the act, without any thing prohibiting the doing it after the time so fixed, the act shall be valid, if performed after the time prescribed. The reason for this construction is, that the public, or some portion thereof, have an interest in the performance of the act, and, to prevent injury from the laches of the officer, the rule has been adopted. That class of cases, holding, that, where the common law confers a right or gives a remedy, and a statute is enacted conferring a new right or giving a new remedy, it will be so construed as not to take away the common law right or remedy, unless it contains negative words showing that such was the legislative intent, was somewhat relied on; neither class is analogous to the present statute. The acts to be performed are by private persons, not public officers. The act creates no new right or remedy, but is designed to regulate an existing right merely. In construing such statutes, the common law rule, as laid down by the elementary writers, is, to consider, first, what mischief, if any, resulted from the exercise of the common law right; second, what is the remedy provided by the statute for such mischief; third, to give the statute such construction, if practicable, as will suppress the mischief; and make the remedy efficient. Applying the rule to the present statute, the mischief to be remedied is obvious, to prevent pretended assignments being made obstacles in the way of creditors. The first section provides, that it shall be acknowledged, and the proof thereof certified before delivery. This court has held (case not reported), that an assignment delivered without such acknowledgment and certificate is void. This does not necessarily determine the effect of non-compliance with the requirements of the two following sections, as the judgment may be upheld by the provision, that the acknowledgment, etc., shall be made before the delivery of the assignment. But, in the absence of this, I think the same construction should be given to the clause, which then would read, every conveyance made by a debtor in trust for his creditors shall be acknowledged. Experience has shown, that debtors frequently, with a view to defraud their creditors, and make compositions with them advantageous to themselves, made general assignments of all their property in trust for creditors, giving no information of the character, situation, or value of the property assigned, or the amount of the debts, residence of creditors, whether the debts were secured, and giving no information to a creditor, to enable him to ascertain any thing in relation to the value of the property assigned, or the amount and bona fides of the debts entitled to share in the proceeds of the property. To remedy this, the second section provides, that, within twenty days from the making of the assignment, the assignor shall make a schedule, verified by his oath, giving all the requisite information. This information will enable the creditors to defeat fraudulent assignments. The intention of the legislature was, I think, to require this schedule to be made as a necessary part of a valid assignment, and as a prerequisite of vesting an absolute title to the property in the assignee. In view of the fact, that time for the preparation of this statement might be required, twenty days was given for this purpose, after the delivery of the assignment, and in the mean time an inchoate title vested in the assignee, good against creditors, provided it was thereafter perfected by a compliance with sections two and three of the act; but, in case of failure so to comply, the assignment must be adjudged void. This construction will render these sections efficient in suppressing fraud, while that adopted by the Supreme Court renders them almost nugatory and useless. The class of cases relied upon in the Supreme Court, for holding these sections directory, and therefore nearly, if not quite, useless, we have endeavored to show rest upon a principle peculiar to themselves, having no analogy to the present case; and, while their authority is fully recognized, they do not justify, much less require, a construction that will defeat the manifest intention of the legislature so to regulate the exercise of the rights of debtors in making assignments of their property in trust for creditors, as to defeat fraud, and insure the application of the entire property to the payment of honest debts. Assignments were frequently made to assignees destitute of pecuniary responsibility. To remedy this, section three provides for giving security for the performance of the trust by the assignee, within thirty days after the making of the assignment, and that, until this is done, the assignee shall have no power or authority to sell the property, or convert the same to the purposes of the trust. This shows that the assignee does not acquire title to the property absolutely, until he gives the security. An absolute title includes the power to sell and dispose of it. This he clearly has not until the security required is given. But it may be said, that his title may be perfected, by giving the bond after the thirty days; It this be so, he may delay for any length of time. Remove the statutory limit of thirty days, and there is no limit whatever to the time during which the property may be tied up beyond the reach of creditors. Their only relief is an application to the court, to administer the trust, and hence this section, instead of securing creditors against irresponsible trustees, would only, by creating facilities for delay, afford additional means to debtors to defraud their creditors. I think the true construction of the statute makes a strict observance of sections two and three essential to the validity of the assignment, and that a non-compliance renders the assignment void as to creditors, whenever their rights to the property attach. It is said, that this will place it in the power of the assignee to defeat the assignment, by failing to give the bond. This is true, but he may in the first instance refuse to accept the assignment, and in that event it would never have any effect. Assignors must see, in selecting assignees, that they will not only accept, but that they can and will give the bond required; and assignors must take care to complete the assignment, by giving the necessary schedule. It follows, that the judgment cannot be sustained upon the validity of the assignment. It remains to consider, whether the judgment was right, conceding that the assignment had become inoperative. No question was made upon the trial, but that the plaintiff was a bona fide purchaser of the goods in question, before levy. He received a bill of sale from both assignor and assignee at the time of the purchase, and took immediate possession of the goods. If the title was in either at the time of the purchase, the plaintiff acquired it. True, he paid the purchase-money to the assignee, but this was with the assent of the assignor, and was equally effectual as if paid to the latter. If the Supreme Court was right in holding sections two and three directory, the title was in the assignee, and the second bill of sale, given by assignee after he gave the bond, gave a good title to the plaintiff, and this would be the effect although the assignment was fraudulent. ( Sheldon v. Stryker, 42 Barb. 284.) If I am right in my conclusion, that the assignment had become inoperative by a failure to comply with sections two and three of the act, the title was in the assignor, and the bill of sale from him to the plaintiff conferred a good title to him. In either event, the motion for a nonsuit was properly denied. The judge was right in refusing to submit to the jury, the question whether the assignment was fraudulent. That was immaterial. It was not claimed that the plaintiff had notice of any fraud. The defendant made no request to have any other question of fact submitted to the jury, except the one above mentioned. The judge did not err in directing a verdict for the plaintiff, for the value of the property.

The judgment appealed from must be affirmed.

Judgment affirmed.


Summaries of

Juliand v. Rathbone

Court of Appeals of the State of New York
Jun 1, 1868
39 N.Y. 369 (N.Y. 1868)
Case details for

Juliand v. Rathbone

Case Details

Full title:GEORGE JULIAND, Respondent, v . PETER B. RATHBONE et al., Appellants

Court:Court of Appeals of the State of New York

Date published: Jun 1, 1868

Citations

39 N.Y. 369 (N.Y. 1868)

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