Beus v. Shaughnessy

BoremaN, J., delivered the opinion of the court: Louis P. Beus, being in failing circumstances, made an assignment to appellant, Paul Beus, of his property, for the benefit of his creditors, dividing them into three classes, and making preferences accordingly in the deed. He directed that the “ times, places and terms of selling the property shall be agreed on by the trustee and the majority in interest of the first and second class creditors,” and that if they do not agree then two-thirds of all of the creditors shall direct such “ times, places and terms.” The respondent held some of the property thus assigned, and the appellant brought this suit for its recovery. The second amended complaint was filed, to which respondent demurred, on the ground that this complaint did not state facts sufficient to constitute a cause of action, the respondent holding that the deed of trust under which the appellant claimed the property was void against creditors, as it authorized sales of the property upon credit. The demurrer being sustained, and the cause dismissed in the District Court, the appellant has brought the case to this court. There seems to be but one question for us to consider, and that turns entirely upon the constraction to be placed upon the words “ terms of selling.” Do these words in the deed of trust embrace the power to sell upon credit? The courts now generally hold that deeds of assignment giving authority to the assignee to sell upon credit are fraudulent, and void as to creditors not assenting thereto, and especially is this the case [500] where deeds make preferences between creditors. In New York this general rule seems to be folly recognized. The case of Kellogg v. Slauson, 11 N. Y. 302, at first reading would seem to be a departure from this rule, but upon a more careful consideration it will be found not to be such. The assignees in that case were authorized to sell the property “ on such terms as in their judgment might be best for the parties concerned, and convert the same into money.” In Brigham v. Tillinghast, 13 N. Y. 215, the case of Kellogg v. Slauson is referred to, and the court says that the last words, “ convert the same into money,” limited the disposition of the property to sales for cash, and that such was the purport of the ruling in Kellogg v. Slauson. This same rule is reiterated in Rapalee v. Stewart, 27 N. Y. 311. The assignment held, in the case of Sumner v. Hicks, to be valid, contained language similar to that found in Kellogg v. Slauson, and, indeed, the closing words of the objectionable provision were precisely the same, viz.: “ and convert the same into money.” 2 Black. (U. S.) 532. The inference from these cases is that if these last words had been left off, the assignments would have been held void, as authorizing sales upon credit. In the case at bar no such words appear, and the disposal of the property is not, therefore, confined to sales for cash. The word “ term ” signifies, amongst other things, “ a limit,” “a boundary.” If we say the power of sale is granted without “ limit,” without “ boundary,” it can be exercised to an unlimited extent and without bounds. In the case at bar there is no restriction whatever upon the power of sale granted to the trustees and a fixed proportion of the creditors. They were authorized to sell upon such “ terms ” as they might deem proper, and this power has no limits, no bounds. This broad grant certainly would necessarily embrace the power to sell upon credit. In Wisconsin, in the ease of Hutchinson v. Lord, 1 Wis. 286, where the assignment empowered the assignee to sell in [501] such manner and “ upon such terms and for such prices as to him shall seem advisable,” it was held that this language gave power to sell upon credit, which would necessarily operate to hinder and delay creditors, and rendered the assignment fraudulent and void. In the case of Keep v. Sanderson, 2 Wis. 42, although the objectionable words were exactly those found in Kellogg v. Slauson, yet the court held that they conferred an authority to sell upon credit, and thus avoided the whole assignment. Under our statute, the creditors of the assignor in this case could have subjected his property to the payment of his debts without that delay and hindrance which are contemplated by allowing sales upon credit, and an assignment which prevents what the statute authorizes in this respect, will not be upheld' further than is necessary ¡under the weight of authority. “The law presumes every man to intend the legal consequences which most naturally flow from his own voluntary acts,” and if his assignment would produce hindrance or delay to creditors in the collection of their debts, then the law raises the presumption that the assignee so intended. Burrill on Assign. 460-465. The assignment in question, authorizing sales upon credit, would hinder and delay creditors, and was, therefore, in contravention of the statute of frauds, and consequently fraudulent and void as to creditors. The judgment of the court below is afflrmed with costs. HtraTER, C. J., and EmeRsoN, J., concurred.