Van Vleet v. Slauson

By the Court, Johnson, J.

The deed conveying the real estate, and the bill of sale of the personal property, executed by O’Neill to the plaintiff, and the article of agreement between them, all bearing- the same date and relating to the same subject matter, must be read and construed together as though the whole was contained in one instrument. Bead and construed in this manner they oonstitpje pothing more por less than au *324assignment of property in trust for the benefit of creditors. The conveyance, in form, seems to be an absolute conveyance of the title, as upon a.bargain and sale, and so does the bill of sale of the personal property; and the agreement on the part of the plaintiff is in the form of a covenant to take the property and pay certain debts of the grantor, and vendor, first, and other debts in proportion to the amount of funds realized from a sale of the property, and remaining after paying certain preferred debts. But the form of the several instruments does not necessarily determine their true legal character. It appears from the plaintiff’s testimony, that nothing was in fact paid, by him for the property, notwithstanding the acknowledgment of the receipt of the purchase price in the papers. The plaintiff was a member of a partnership firm, which firm was a creditor of the assignor to the amount.of nearly $3000, and this debt, as appears from the article of agreement, is to be amongst the first paid from the proceeds of the sales. After certain debts are paid, the agreement provides for the payment of a certain other class of debts, if the funds remaining are sufficient for their full payment, and if not, then pro rata, and out of the residue to pay all other debts of the assignor in full if the fund shall be sufficient for that purpose, and if not, then pro rata. The real and personal property, thus conveyed and transferred, is all to be sold and the proceeds applied in payment of the debts of the grantor, and vendor, and the balance, if any; after the payment- of all his debts, to be returned or paid over to him. It is thus seen that the transaction has every element of a trust for the benefit of creditors, and in law must be regarded simply as an assignment of that character, notwithstanding the form of words used in the several instruments.

It appears, however, that no inventory or account of the creditors of the debtor, or of the amount owing to each, or in gross, had ever been made, and no bond had ever been given "by the plaintiff, as required by the second and third sections of the act of 1860, on the subject of assignments for *325the benefit of creditors. (Sess. Laws of 1860, ch. 348.) On this ground, as it would seem, from the case, the plaintiff was nonsuited upon the trial. This, of course, must have been upon the ground that by reason of the non-compliance with" these provisions of the act, the transfer was wholly ineffectual and conferred no right or title upon the plaintiff. This is the principal question in the case. The papers constituting the assignment were made the 20th of January, 1860. j. On the 11th of February, twenty-two days thereafter, the goods in question, for which this action was brought, were seized by the defendant as sheriff, by virtue of an attachment in favor of a creditor of O’FTeill, the assignor. The act in question provides that the inventory or schedule shall be made out and delivered to the county judge, within twenty days after the making of the assignment, and the assignee is required to execute and deliver his bond within thirty days after the date of the assignment.

The precise point to be determined is, whether these provisions of the statute are mandatory, or directory merely, in their character. This precise question was decided in this court, in the sixth district, in the case of Juliand v. Rathbone, (39 Barb. 97,) all four of the judges concurring, Balcom and Mason, Justices, each delivering elaborate opinions. It was there held that these provisions were directory merely, and that an assignment, in other respects good, was valid, 'and vested a perfect title in the assignee, although not followed by the schedule, or the bond, provided for by sections two and three of the act. It is our practice to hold these decisions of our own court in other districts binding upon us until they are reversed, either by this court or by the Court of Appeals, unless they are so clearly erroneous that we should reverse had they been.made in our own district.

I am disposed to place our decision, in this case, upon the authority of the decision in the case above cited, although I am not quite certain that I should have so held were it an *326original question. It is quite true, as the learned judges in that case remark, that the title must vest somewhere, and when it has once vested, it could not be forfeited by a mere neglect to comply with some direction of a statute. It should be observed, however, that section three seems to make the giving of the bond by the assignee, a pre-requisite to his power or authority under the assignment, to sell, dispose of, or convert the property to the purposes of the trust, which is not entirely consistent with a mere directory provision. The power of disposition is certainly essential to a complete title to property. But regarding the decision in that case as authority, the nonsuit was erroneous, as the plaintiff was the legal owner of the property by virtue of these several instruments constituting him an assignee and trustee for the benefit of creditors. The same view of these provisions of the statute, substantially, was taken by Marvin, J. at special term in Evans v. Chapin, (20 How. Pr. R. 289.) In Fairchild v. Gwynne, (14 Abbott’s Pr. 121,) the assignment was not acknowledged before its delivery, nor afterwards; nor had it been recorded. The court at special term held that the assignment was not void by reason of this omission? but that the provision of the first section of the act of 1860, requiring the assignment to be acknowledged and the certificate of acknowledgment indorsed upon the assignment before delivery, was merely directory. But the court at general term, in the first district, reversed the decision of the special term, on the sole ground that the assignment not having been acknowledged, and having no certificate of acknowledgment indorsed upon it, was not executed in such a manner as to authorize its delivery to the assignee, and it not having been properly executed, the assignee could acquire no rights under it. (16 Abbott’s Pr. 23.) But that question is not made in this case. For aught that appears, the deed, and the bill of sale of the personal property, were both duly acknowledged, and had the certificate indorsed. The *327question here is, upon the neglect to make the schedule and to give the bond, which seems to be settled against the defendant. There must therefore be a new trial, with costs to abide the event.

[Monroe General Term, March 5, 1866.

Welles, E. Darwin Smith and Johnson, Justices.]