S. L. Sheldon Co. v. Mayers

PiNNEY, J. The statute (sec. 2317, R. S.) provides that “ no contract for the sale of personal property, by the terms of which the title is to remain in the vendor and the pos [630] session thereof in the vendee until the purchase price is paid or other conditions of sale are complied with, shall be valid as against any other person than the parties thereto and those having notice thereof, unless such contract shall be in writing, subscribed by the parties, and the same or a •copy thereof shall be filed in the office of the clerk of the town, city, or village where the vendee resides,” etc. Under the contracts of conditional sale set forth in the answer, as between the plaintiff and Zehnter no title to the property in question passed to Zehnter,— W. W. Kimball Co. v. Mellon, 80 Wis. 133, — and the title of an assignee for the benefit of .creditors at common law can be no greater nor better than that of his assignor, — Hawks v. Pritzlaff, 51 Wis. 160; Estabrook v. Messersmith, 18 Wis. 545. The contracts of conditional sale not having been signed by both of the parties, they are not within the protection of the section of the statute above cited, and were valid only as between the parties to them, and void as against all other persons not having notice thereof. . If the defendant has any right to hold the property in question it must be because the statute has conferred on him a right, as representing Zehnter’s creditors, to treat the condition annexed to the sale as void and the sale as .absolute. It certainly cannot be contended that these transactions, occurring and conducted according to the usual course of business, are fraudulent as against creditors or purchasers from Zehnter. • They are simply made void by 'the statute as against all others excepting the parties to them and persons having notice of them. The condition contained ,in these contracts and claim of title thereunder are therefore absolutely void as against the creditors of Zehnter. As to the creditors of Z.ehnter, the statute has the effect to avoid the conditions in the sales to Zehnter, and to make ;them absolute, so that they may seize and sell them on proper'p'rocess against Zehnter, and a purchaser at such sale [631] will take a title perfect as against the plaintiff, the conditional vendor. Williams v. Porter, 41 Wis. 422; Rawson Mfg. Co. v. Richards, 69 Wis. 643; Thomas v. Richards, 69 Wis. 671. No action, therefore, is either appropriate or necessary for the purpose of setting aside the contracts, for it would wholly fail to give the creditors of the conditional vendee the remedy to which they are entitled. It is provided by ch. 170, Laws of 1882, that “ in all cases of voluntary assignment for the benefit of creditors, made under the provisions of chapter 80 of the Revised Statutes, the assignee or assignees shall be considered as representing the rights and interests of the creditors of the debtor or debtors making the assignment, as against all transfers and conveyances of property which would be held to be fraudulent or void as to creditors.” Ey force of the statute the assignee succeeding him in the possession of the property in question as such is possessed of and holds and represents the rights of creditors as fully and completely as the sheriff could on taking them under execution against Zehnter. The title asserted by the plaintiff is not fraudulent, it is simply void because the law condemns it. This is in conformity with Batten v. Smith, 62 Wis. 98, and Backhaus v. Sleeper, 66 Wis. 72. The statute in question gives the as-signee the status and rights thus mentioned in two cases: (1) Where there has been a transfer or conveyance by the assignor that is fraudulent, in which case the assignee must sue in equity (Kloeckner v. Bergstrom, 67 Wis. 197; Charles Baumbach Co. v. Miller, 67 Wis. 449); (2) where the title relied on is simply void as to creditors; in which case they or their representative, the assignee, have a complete remedy at law. The appellant’s counsel cites the case of Wadleigh v. Buckingham, 80 Wis. 230, as maintaining the proposition that the rights of an assignee for the benefit of creditors as they exist under the statutes now in force are no greater in respect to a case of conditional sale than they were at [632] common law. Cole, O. J., in that case says: “ If the contract was a conditional sale and delivery, and was properly recorded, there being no fraud in the transaction, the plaintiff was entitled to the possession of the lumber. Certainly Vaughn & Co. could not give to an assignee for the benefit of creditors title to property which they did not own.” The question involved in this case was not in the case of Wadleigh v. Buckingham, but the remark of the learned chief justice was correct as applied to the facts of that case. The contract having been duly filed, of course the assignee took his rights subject to that instrument; but here it is quite different, for the contracts of conditional sale were not signed by both parties, and could not be filed with any effect. Por these reasons the answer of the defendant stated a good defense, and the plaintiff’s demurrer to it was rightly overruled. 2. Inasmuch as the invalidity of the plaintiff’s claim of title appears upon the face of the conditional contracts upon which it founds it, the contracts not having been signed by both parties, a court of equity will not, upon original complaint or counterclaim, interfere to set it aside or enjoin the assertion of it. Meloy v. Dougherty, 16 Wis. 269; Ferson v. Drew, 19 Wis. 225; Cornish v. Frees, 74 Wis. 495. The plaintiff’s demurrer to the counterclaim was therefore well taken, and should have been sustained. It follows, therefore, that the order appealed from must be affirmed so far as the demurrer to the answer is concerned, and reversed as to the counterclaim; and, inasmuch as there is but a single order in relation to both answer and counterclaim, and it is reversed in part and affirmed in part, no costs in this court will be allowed to either party. By the GourL— Ordered accordingly, and that the case be remanded for further proceedings according to law.