Juliand v. Rathbone

Balcom, P. J. The assignment by Nichols to Lewis Juliand was executed, acknowledged, delivered and recorded as required by chapter 348 of the laws of 1860. (Laws of 1860, p. 594.) The defendants’ counsel insists that the assignment became inoperative and fraudulent as against the creditors of the assignor, because the assignor did not within twenty days — 99 — after the date of the assignment, make and deliver to the county judge of Chenango county, in which county the assignor resided, an inventory or schedule, as required by section two of the act of 1860; and because the assignee did not within thirty days after the date of the assignment, and before he first sold the goods in question to the plaintiff, give a bond according, to section three of such act. The well known fact that assignments have very frequently been made for the benefit of the assignors instead of their creditors, and to cheat and defraud the latter, satisfies me the authors of the act of 1860 intended that no assignment should be valid, unless the assignor and assignee complied with all the provisions of that act.. But I am constrained to say that, by the well settled rules of construing statutes, that act does not make an assignment inoperative, or fraudulent, or void, if the assignor fails to make the inventory or schedule within the time required by section two of such act; or if the assignee fails to give a bond within the time prescribed by section three of such act; because the failure to do those things within the prescribed time is not declared in such act, or by any other legislative act, to have that effect; and assignments were good by the common law, without any inventory, schedule or bond. (See Evans v. Chapin, 12 Abbott, 161; MS. opinion of Justice Clerke, in Fairchild, receiver, v. Gwynne, assignee, &c. and others, N. Y. Transcript, Feb. 15, 1862.) ■ When the assignment was executed, acknowledged, delivered and recorded, and the assignee took possession of the goods, the title to them became vested in him if the assignment was not fraudulent; and he did not lose such title by failing to comply, or by the failure of the assignor to comply with the directory provisions of the act of 1860. Those provisions which require an inventory or schedule to be made within a'certain time by the assignor, and a bond to be given within a certain time by the assignee, are merely directory, for the reasons already given \ and I will add that similar — 100 — provisions in the legislative acts of Missouri and Pennsylvania have been held to he directory by the courts of those states. (See Hardcastle et al. v. Fisher et al., 24 Missouri Rep., 70; Dallam v. Fitler, 6 Watts & Serg. 323.) The assignor, as well as the assignee, executed a bill of sale of the goods in dispute, to the plaintiff, on the 20th • day of July, 1860 ; and the assignee executed another hill of sale of the same goods to the plaintiff after the inventory or schedule was made and filed and the proper bond was given, approved and filed, and before the defendants levied upon the goods. Nine hundred dollars of the consideration for the goods was paid in money by the plaintiff at the time he purchased them of the assignee; and the evidence shows the plaintiff was a purchaser in good faith, so as to enable him to hold the goods, as against the execution, before any levy was made by the defendants. (See 11 Paige, 21; 5 Denio, 619.) I am of the opinion the assignment is valid on its face. (See 34 Bart, 422; 33 id. 425; Ogden v. Peters, 21 N. Y. Rep. 23; Griffin v. Marquardt, Id. 121.) I think there was no question of fact for the jury, except to determine the value of the goods; and that no error was committed on the trial to the prejudice of the defendants. For these reasons I am of the opinion the defendant’s motion for a new trial should be denied, with costs. Mason J. The first question to he considered in this case is whether the omission of the assignee to file the bond required by the third section of the act of April 13th, 1860, and the omission of the assignor to make and deliver the inventory required by the second section, renders the assignment void. (Laws 1860, chap. 348, §§ 2, 3.) I do not think it does. If the assignment was valid when made, and vested' the title in the assignee, no omission of duty by the assignee in the execution of the trust, can reach hack and render the assignment invalid. Neither can the omission to make out — 101 — and deliver the inventory, required by the second section of the said act, render the assignment invalid. The making ot the inventory required by this statute may be after the execution and delivery of the assignment; and the making of it is a duty imposed on the assignor, over whom the assignee has no control. In the case of Evans v. Chapin, (12 Abbott’s Pr. R. 161,) it was held that the omission to make and deliver the inventory did not affect the validity of the assignment, and that the statute, in that particular, was merely directory. (How. Pr. R. 289. 2 Paige, 311) This statute must be held to be merely directory, both upon principle and authority. (4 Seld. 13, 328. 34 Barb. 620, 627. 6 Wend. 486. 16 John. 135. 19 Wend. 143. 14 Barb. 298 to 294. 12 Wend. 481. 6 Hill, 42. 2 id. 329; 23 Barb. 313. 26 id. 586. 17 N. Y. Rep. 445. 18 id. 220. 10 Wend. 663. 3 Hill, 43. 3 Mass. R. 230. 11 Wend. 604; 7 Hill, 9.) These things were done, but not within the time directed by the statute. The statute makes it the duty of the assignor to make out and deliver the inventory to the county judge within thirty days, and also makes it the duty of the assignee to execute the bond required by the third section within thirty days; but there is no negative in the statute declaring it shall not be done after that time; and the statute is entirely silent as to the effect of the omission to do either. It seems to me very clear, therefore, within the principle of the cases above referred to, that this statute must be regarded as directory as to the time, at least, in which these acts must be done. The title vested in the assignee at the time of the assignment, and by virtue of it the assignee is authorized to take possession of the property at once, without any reference to his having executed his bond. It is true the third section of the act requires that the bond shall be executed before he shall have power or authority to sell or convert the assigned property to the purposes of the trust. The omission of the assignee to give the bond may be — 102 — treated as a refusal to serve, perhaps, and justify an application to appoint a receiver. (Burrill on Assignments, 573, 3d ed.) or may furnish good cause for so doing. (5 Seld. 176. 2 Barb. S. C. R. 446. 5 Paige,, 46. 8 id. 294. 2 Story’s Bq. 1289. Burrill on Assignments, 507, 568, 2d ed.) The construction of this statute contended for by the defendant cannot upon any known principle prevail. It cannot be that the assignee takes only the conditional title, subject to be deprived of it if the invéntory is not delivered in twenty days, or the bond executed in thirty. The property is not thus held in suspense. This statute contains no such provision and has no such effect; and previous to the statute the law was well settled that on delivery of the assignment the title passed, and the rights of the creditors under it became vested and fixed, and could not afterwards be impaired by any act or omission of duty by the assignee. (4 John. Ch. 135. 1 Duer, 58. 20 N. Y. Rep. 15. 5 Seld. 142, 152. Burrill on Assignments, 304, 306, 308, 309.) If valid in its creation no subsequent illegal acts of the assignor or assignee could in any manner invalidate it. (6 Barb. 91, 94. 33 id. 127, 135. 24 id. 105. 32 id. 126. Burrill on Assign. 442, 3d ed.) This assignment is not void by reason of any thing appearing on the face of the assignment. It is a fundamental rule in the construction of written instruments susceptible of two meanings, one of which would render the instrument lawful, and the other unlawful, that the courts shall give it that construction which will render it lawful and uphold the instrument. (15 Barb: 61. 10 How. Pr. R. 175, 178. 19 Barb. 176. 22 id. 550, 561. 1 Kernan, 305. 17 Barb. 392. Burrill on Assign. 374.) Applying this rule of construction to the portions of this assignment which are made the subject of criticism on this appeal, the defendant’s objection to this assignment cannot prevail. If, howevér, this assignment is to be regarded as fraudulent, as to the creditors of. the — 103 — assignor, I do not see how it could prejudice the plaintiff's case, as he must, upon the evidence in the case, he regarded as a bona fide purchaser from the assignee, before these defendants had made their levy upon the property; and in such a case an innocent purchaser, for a valuable consideration, acquires a good title, even from a fraudulent assignee. (9 Paige, 132. 18 John. 515. 3 Duet, 183. 17 N. Y. Rep. 9, 21. 6 Abbott, 357, 374. 1 Barb. Ch. 220, 240, 241. 21 Barb. 469. Burrill on Assign. 509, 510, 2d ed. 1 Story’s Eq. Jur. § 381. 4 Kent’s Com. 464, note. 2 R. S. 137, § 5.) [Broome General Term, July 8, 1862. Balcom, Campbell, Parker and Mason, Justices.] It is not necessary to inquire as to the validity of the bill of sale executed before the assignee had executed his bond ; for he executed to the plaintiff a second bill of sale after he had executed his bond, and before the levy. There was no question for the jury in the case. There was no evidence of fraud in this assignment, and nothing from which such a verdict could be justified. And in such a case the court may direct a verdict when a contrary finding would be set aside as against evidence. (6 Bosw. 148. 14 Barb. 303. 4 Sold. 73 to 79.) The plaintiff was shown to be a bona fide purchaser; and as the defendant did not raise any question as to the good faith of the plaintiff's purchase, this question must be regarded as concluded on the trial, and consequently the question whether this assignment was fraudulent or not became wholly immaterial, and it could not affect the plaintiff's title as a bona fide purchaser. It follows that the defendants were trespassers in taking this property, and the judge at the circuit was right in directing a verdict for the plaintiff. A new trial must be denied. Campbell and Parker, Justices, concurred. Motion for new trial denied.