Milwaukee Trust Co. v. Lancashire Insurance

PiNNEY, J.

In the view which we feel compelled to take of this case, it will be necessary to consider but one of the several defenses insisted on by the several insurance com*199panies wbo have answered and actively defended this action. We tbink that the fifteen policies severally issued by the companies referred to were avoided by the operation and effect of the voluntary assignment, executed and delivered by the insured, the Enger-Kress Company, to the assignee, Winterhalter, and accepted by him, about two weeks before the fire that caused the loss, and which embraced all the property insured by said policies, and was without the stipulated consent of those companies, and that there can be no recovery on either of them. The assignment delivered to, and so accepted by, the assignee, and filed, with the accompanying papers, in the office of the clerk of the circuit court, June 23, 1894, became a valid and operative instrument of conveyance and transfer of the legal title to the property covered by the policies, as between the Enger-Kress Company, the insured, and the assignee, and therefore effected a change in the interest, title, and possession of the property insured, without the consent of the insurers; and when the fire occurred, July 7, 1894, these policies had thus been avoided, and were of no force or effect. It is clear, also, that the assignee had before then taken actual possession, and, as such, had been for some days engaged in the performance of his duties as such assignee. It is a proposition well established by the great weight of authority that an assignment, though void as against creditors, is valid as between the immediate parties, and the assignor is estopped by his own deed. Burrill, Assignments, § 323. The assignor, having no title thereafter to the property assigned, could not convey or assert any. None but creditors could question the title thus acquired by the assignee. Haines v. Campbell, 8 Wis. 187; Estabrook v. Messersmith, 18 Wis. 545; Geisse v. Beall, 3 Wis. 367; Lincoln v. Cross, 11 Wis. 91; Fargo v. Ladd, 6 Wis. 106; Wilson v. Marion, 147 N. Y. 589, 593; Knower v. Central Nat. Bank, 124 N. Y. 559. The fact that the assignor did not make and file in the office *200of tbe clerk of the circuit court a correct and verified inventory of his estate, and a list of his creditors, certified by the assignee, as provided by sec. 1697, S. & B. Ann. Stats., can. make no difference as to the validity of the assignment, for a failure to comply with this section would not avoid the' assignment. Cribben v. Ellis, 69 Wis. 337; Appeal of Howland (N. H.), 35 Atl. Rep. 943. If, as contended by the plaintiffs, the bond of the assignee was fatally defective,, this would render the assignment void only as to creditors^, but would not prevent it from being operative between the parties, so as to vest the title in the assignee. The cases of Wadleigh v. Merkle, 57 Wis. 517; Fuhrman v. Jones, 68 Wis. 497; and Grever v. Culver, 84 Wis. 295, go no further than to hold that, until a proper bond has been given, approved,, and filed, the assignee would acquire no rights to the property assigned, as against the attaching creditors of the assignor.

The statute (R. S. sec. 1694) declares the effect of a failure to give a bond, with sufficient sureties, to be that the assignment “ shall be void as against the creditors of the person making the same,” leaving it, by necessary implication, operative as between the parties. The instrument contains, apt and proper words to pass the entire legal title to the property described in it, and covered by the policies, and provides that the assignee shall take possession of the property hereby assigned, or intended so to be, and shall with all convenient diligence proceed to sell and dispose of the-same, as is provided by law, and convert the same into money,” and collect all debts, dues, etc.; and it directs the application that is to be made of the proceeds, namely, to the payment of the costs and expenses of executing the trust, and the payment of the creditors of the assignor. We think that the assignment was valid and operative, so far, at. least, that the assignor could not reclaim or recover back the property assigned, from the assignee. Whether the as*201signment is void, as against creditors, for fraud in fact, or-is declared void, as against creditors, by the statute, by reason of not having been executed as required by the statute,, can make no difference. In either case the execution, delivery, and acceptance of such an assignment, and possession under it, was a breach of the condition insisted on, and, if not properly consented to, effected a change in the interest,, title, and possession of the property assigned, and avoided the policies in question. Birdsey v. City F. Ins. Co. 26 Conn. 165; Treadway v. Hamilton Mut. Ins. Co. 29 Conn. 68; Dadmun Mfg. Co. v. Worcester Mut. F. Ins. Co. 11 Met.. 429, 434; Baldwin v. Phœnix Ins. Co. 60 N. H. 166; Brown v. Cotton & W. M. M. Ins. Co. 156 Mass. 587; Langdon v. Minn. F. M. F. Ins. Asso. 22 Minn. 193; Orrell v. Hampden F. Ins. Co. 13 Gray, 433. It may well be conceded that an alienation which is absolutely void would not operate to-avoid the policies. Such were several of the cases cited and relied on by the plaintiffs’ counsel. «

The assignment, under the circumstances stated, was not. revocable by the action or consent of the assignor and as-signee. In Burrill, Assignments, § 330, it is laid down that. where the assent of creditors, or their union as parties-to the assignment, is not necessary to its validity, the prevailing doctrine is that an assignment in trust for creditors, executed and delivered by the assignor and accepted by the assignee, creates at once the relation of trustee and cestui gue trust between the assignee and the creditors, and cannot be revoked by the assignor, or the joint act of the-assignoü-and assignee.” 27 Am. & Eng. Ency. of Law, 319, 320, and cases cited in note; Appeal of Howland (N. H.), 35 Atl. Rep. 948. In Mackellar v. Pillsbury, 48 Minn. 396, under a statute similar to our own, it was held that an assignment for the benefit of creditors, when executed by the-assignor and accepted by the assignee, creates a valid trust,, which cannot be changed or revoked by the assignor, or by *202the joint act of both assignor and assignee, or by the court on their application. Nothing whatever occurred looking to a revocation or repudiation of the assignment until July 21, 1894, when the receiver was appointed in the sequestration proceeding, and after several creditors had filed their claims with the assignee. And, had it then been revoked, it is not easy to see what would have been gained to the insured or to the plaintiffs, as the policies had already been avoided by the assignment, and the loss had occurred whereby the property insured had been entirely destroyed; so that there was no property remaining, covered by the policies, when the receiver was appointed, to be delivered over to him, and there wa^ no cause of action for its loss or destruction which he could enforce. Our conclusion is that the judgment appealed from is correct, and should be affirmed.

By the Court. — The judgment of the superior court is affirmed.