Commercial National Bank v. Mosser

Cooley, O. J. The principal question in this case is whether the assignees in a common-law assignment, under the facts which will be recited, took the title as trustees for the creditors, so as to preclude the property being seized on attachments. On November 19, 1883, the banking firm of Rice & Mess-more, doing business at Cadillac, in this State, finding themselves insolvent, executed to William E. Ambler and John C. Mosser, as trustees, a general assignment of all their property for the benefit of their creditors ratably. Ambler and Mosser joined with the assignors in executing the assignment, and it was placed upon record by them. Before further action was taken, certain creditors filed with the circuit judge a petition, under the Assignment Law of 1883, praying for the appointment of a receiver, and such [388] proceedings were liad upon the petition that Fred. S. Kieldson was appointed receiver, gave bond, took possession ,of the assets, and entered irpon the performance of duty under the appointment. He continued to act as receiver until this Court, in the case of Risser v. Hoyt 53 Mich. 185, held the Assignment Act of 1883 unconstitutional. When this decision was made, a number of creditors, and among them Ambler and Mosser, sued out attachments, and levied upon the property which had been assigned. This was done on an assumption that the trust which the assignment was intended to create had failed by reason of the non-action of Ambler and Mosser as assignees, and, the receivership proving to be invalid, the creditors were remitted to such remedies as would have existed if no assignment had been made. The complainants in this suit, who are creditors to a large amount, thereupon filed their bill, praying for the appointment of a receiver, and the execution by him of the trust which the bill claims was created by the assignment. They also prayed that the creditors who had attached should be enjoined from proceeding on their levies. • The defendants, who are the debtors and the attaching creditors, answered ; but, as there is no dispute in the leading facts, the pleadings and evidence need not be further referred to. ■ The circuit court in chancery made a decree whereby the assignment was declared to have created a valid trust, which the assignees had failed to execute, and Kieldson was thereupon appointed receiver for the purpose of executing the same. It was declared in the decree that “all of the right, title, authority, interest, property, and estate granted by said deeds in terms or intent to the assignees therein named, are hereby continued, vested, and confirmed in the said receiver, and he shall have and possess all power, right, authority and estate which the said assignees would have had under said assignment. He shall take the same, subject to the trust expressed in said deed, and shall discharge and perform all of the duties, trusts, and obligations which would otherwise have devolved upon the said assignee?, and execute and discharge said trust, and expend [389] and distribute the funds coming into his hands by virtue of the same, in all respects according to the terms and intent of said deed of assignment, and the laws of this State governing sucli assignments.” All levies on the assigned property, and all other proceedings taken by creditors with a view to obtaining preferences, were set aside. Mosser and three other defendants appealed. We think this case is within the ruling in Fuller v. Hasbrouck 46 Mich. 78. It was there held that the failure of the assignee to proceed within the time contemplated by the statute to give his bond and commence the execution of his duties, did not defeat the trust which had been accepted by him. In that case there were further acts of acceptance than appear in this; for he had taken possession of the property and given notice to creditors. But these were only significant facts indicating acceptance, and the acceptance is conclusively made out in this case by the assignees joining in the assignment, and putting it upon record after the execution was completed. They went no further because they supposed they were displaced by the appointment of a receiver. We adhere to what was said in Fuller v. Hasbrouck, and also in Coots v. Radford 47 Mich. 37, and Pickersgill v. Riker 50 Mich. 98. Those cases, we think, require an affirmance of this decree. The purpose of the Act of 1879 (How. Stat. ch. 303), which the bill seeks to enforce in this case, is to compel an equal distribution of insolvent estates among creditors in cases where a trust for their nominal benefit has been created. This is to be done through the assignee, if he proceeds to execute the trust as the statute provides; otherwise, a receiver appointed by the court of chancery. The assignees in this case have failed to act; the reasons are immaterial. The intent of the statute can now be accomplished only through a receiver, and any creditor had a right to have one appointed. The decree must be affirmed. The other Justices concurred.