Fairchild v. Gwynne

Mullen, J. Before the passage of the act of 13th April,. 1860, entitled “ an act to secure to creditors a just division of the estates of debtors who convey to assignees for the benefit of creditors,” an assignment by a debtor of his property to an assignee in trust for creditors, might, under certain circumstances, have been made without writing, or, if in writing, need not have been acknowledged before any officer before delivery to the assignee, in order to be valid and effectual, to accomplish the purpose intended. These acts are for the first time required by the act above referred to, and the only question of law presented by the appeal is, whether this statute is to be construed as avoiding an assignment not made in conformity to its provisions, or whether it is directory merely, leaving it discretionary with the parties to conform to the statute or to disregard it at their pleasure. Voluntary assignments by insolvent debtors for the benefit of creditors, in and by which certain creditors, or classes of creditors, have been preferred over other creditors or classes, have not been favored instruments in the courts, nor have business men looked upon them without suspicion. The secrecy with [31] which they might be made—the facility they afforded to fraud— the unjust preferences they secured, required that they should be watched with the greatest vigilance, and scrutinized with the greatest care. It was in the power of the debtor and his assignee to put forward one of these instruments at such time as should most effectually give effect to their own purposes—to ante or post date it—to consider it as delivered or not delivered—to alter the schedules—to increase or lessen the number of preferred creditors—to prefer a friend or non-prefer an enemy—to increase or lessen the amount of property to be passed under the assignment—these and other fraudulent and dishonest acts might have been done without any opportunity being afforded to the creditors to prevent or punish them. It was to prevent these abuses that the act of the 13th April, 1860, was passed. That act requires the assignment to be in writing, and to be acknowledged before an officer authorized to take the acknowledgment. It is quite clear that if this statute is to be construed as directory, that it is a mere nullity—no abuse is corrected—no one is protected—it amounts to nothing—accomplishes nothing. It is hardly respectful to the Legislature to hold that it would pass through the forms of legislation an act which it knew was to be obligatory only at the will of the citizen—to be obeyed or disobeyed, as each person should deem most conducive to his own interest. There was an evil to be remedied, and it could only be remedied by a law requiring the persons to be affected by it to conform to its provisions, or their acts would be void. That the Legislature intended to make this statute mandatory I have no doubt, and I am equally clear that it is our duty so to construe it. I do not think that an investigation of the rules by which to determine whether a statute is mandatory or directory, will aid us in arriving at a construction of the statute in question. The question here is one of legislative intent, to be derived from the circumstances under which the act was passed. We know there was an evil to be remedied—that this statute was intended to have remedied it, in a degree—effect cannot be given to such intent by considering the statute directory, but can be only by holding it to be mandatory. [32] I know of no case in which it has been held that a statute enacted to remedy an abuse was directory. There are cases in which it is held that when a duty is imposed on a public officer, in which the public have an interest, •and a time is limited within which it is to be performed, or a manner prescribed in which it is to be done—that the act may be done after the time limited in the statute, or in a manner different from that prescribed—the statute in such case being directory. The reason of the rule in such cases being, that the act being for the benefit of the public, conformity to the precise time and manner indicated in the statute is not exacted, because the Legislature is to be presumed to intend that the act should be done, and the time and manner of doing it are of no materiality. There is no distinction in principle between this act and that of the act relating to the execution of wills; substantial conformity to its provisions is required, or the will is void. Tet there are in the statute no mandatory words, no provision that the will is void if not executed in conformity to it. It is substantially like the act under consideration. It is said that the act relating to wills is held to be mandatory, because at common law a person had no power to make a last will, and as that right is given by statute, the provisions of the statute, as to the manner of execution, must be complied with. This is equivalent to saying that when the Legislature grants a new right, gives a new remedy, or imposes a new duty, the provisions of the statute are peremptory. The proposition is not correct in regard to each of the classes of cases enumerated, and, indeed, the only rule which can be laid down is, that the question is one of intention, and when the intention is ascertained it must have effect. The cases in relation to the construction of statutes, lay down rules by which courts may be guided in ascertaining the intentions of the Legislature. But when that case is obvious, no cases, nor principles to be drawn from cases, can justify a court in refusing to give it effect. I am of opinion that the judgment of the special term should be reversed, on the sole ground that the assignment, not having [33] been executed and acknowledged in compliance with the statute, is utterly void. Sutherland, P. J., concurrred. Clerke, J., dissented.