Second National Bank v. Schranck

Collins, J. In all of the cases heretofore considered by this court, in which the point might have been raised, it has been assumed that a deed of assignment, regular upon its face, purporting to have been made by virtue of the provisions of chapter 148, Laws 1881, but actually unwarranted by the existence of the facts which alone would justify such an assignment, could be attacked and assailed collaterally; for instance, by proceedings in garnishment against the person who has [40] qualified as assignee, as was attempted in this case. The correctness of this practice has never been questioned, and, as a consequence, it has not been decided, although it was held in Lord v. Meachem, 32 Minn. 66, (19 N. W. Rep. 346,) the assignment being, in fact, valid, that the assignee could not be garnished, for several reasons, the insuperable one being that the assigned property was in custodia legis. But we are clearly of the opinion, in view of the character of the proceedings in insolvency, that in cases where the deed itself is regular, and, upon its face, complete, no distinction can be made, and that this method of adjudicating upon the validity of the assignment, by collateral attack, is irregular, and should no longer prevail. When the assignment is perfected, and to some extent, at least, prior thereto, its entire subject-matter — all that is involved, including the assigned estate — passes under the jurisdiction of the district court, ipso facto. Immediately, and without any further act, the assigned property is in the custody of the law. Supervisory authority and control are conferred upon the court, and the insolvent himself yields to its jurisdiction when he files the deed of assignment; and this extends from that time clear through all of the steps which may prove essential, including the final decree. The proceeding, from beginning to end, requires the exercise of judicial power, and is judicial in its nature. Clark v. Stanton, 24 Minn. 232; Kingman v. Barton, Id. 295; In re Mann, 32 Minn. 60, (19 N. W. Rep. 347.) As the assignment here was apparently valid and well founded in fact, and the proceedings are judicial in their character, it cannot be attacked and assailed collaterally, in another judicial proceeding. In placing our decision upon this ground, we do not wish to be understood as intimating that the court below was in error in its reasons for granting a new trial. The case is remanded, with direction to entei judgment for defendant.