Babcock v. Maxwell

74 P. 64, 29 Mont. 31, 1903 Mont. LEXIS 153
CourtMontana Supreme Court
DecidedOctober 26, 1903
DocketNo. 1,672
StatusPublished
Cited by7 cases

This text of 74 P. 64 (Babcock v. Maxwell) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Babcock v. Maxwell, 74 P. 64, 29 Mont. 31, 1903 Mont. LEXIS 153 (Mo. 1903).

Opinion

MB. COMMISSIONER CLAYBEBO

prepared the opinion for tlie court.

Action for the alleged conversion of bomber. To plaintiff’s complaint, defendant filed an amended answer, denying generally all the allegations thereof. Tie then alleged as new matter, “by way of counterclaim,” as is stated in the answer, that defendant claimed' the property as assignee for the benefit of creditors. of the original owner; that the plaintiff never made any demand upon defendant; that plaintiff stood by, with knowledge of defendant’s claim, and allowed and induced defendant to sell the property as assignee; that, if there ever was- any purchase by plaintiff, the same was. in fraud of creditors, and void. All these matters arc alleged as one counterclaim,, although the answer setting them forth is divided into paragraphs which are severally numbered. No replication was filed to this amended answer.

The suit was instituted by the filing of a complaint in May, 1896. At the date of filing the original answer the statute only required a reply to a counterclaim. The first answer filed set up many of the facts pleaded in the amended answer, not by way of counterclaim,, but by way of “equitable defense.” The allegations of additional matter in the amended answer are of identically the same purport. Judgment on the pleadings was entered in the court below in favor of defendant on his first an[33]*33swer, but on appeal the supreme court reversed sueli judgment, and held that defendant, not having- pleaded the. facts as a counterclaim, was bound by the designation he had given the allegations ini his answer (i. e. an “equitable defense”), and that a. replication- was not necessary. (Babcock v. Maxwell, 21 Mont. 507, 54 Pac. 943.) The legislature at the session of 1899 amended the section of the statute relative to replications, and required, a replication to all new matters- alleged in the answer. (Laws of 1899, p. 142.) Subsequent to- the passage of this amendatory act, and on May 23, 1899, defendant filed an amended answer, and pleaded this new matter as a counterclaim. The new matter pleaded in the. amended answer is not sufficient to. constitute a counterclaim, under the rules, laid down on the former appeal. (Babcock v. Maxwell, 21 Mont. 507, 54 Pac. 943.)

1. Did the facts alleged as a counterclaim constitute a defense to- the cause of action ? The assignment set forth in the amended answer, under which the defendant claims^ was one made for the benefit of creditors, pursuant to the provisions of Section 4510 et seqCivil Code. By this instrument defendant became the owner only' of such property and1 rights- as the assignor had at the time the assignment was made. If the assignor, prior to- the execution thereof, had parted with any property or rights, by a transaction binding upon himself, the defendant was equally'bound thereby. He became merely the agent of the assignor for the purpose of distributing the property which passed to. him'-'by the assignment among the creditors of the assignor.

Section 4521, Civil Code, provides, “An assignee for the benefit of creditors is not to be regarded as a purchaser for value, and has no- greater rights- than his: assignor has^ in respect to things in action, transferred by the assignment.” The Supreme Court of California, in the case of First Nat'l Bank v. Menke, 128 Cal. 103, 60 Pac. 675, in considering Section 3460, Civil Code of California, which is identical with our Section 4521, above quoted, says.: “This section seems to- adopt the common-[34]*34law rule, and under that rule the assignee could not assert any claim to the property which could not have been asserted by the assignor.” The assignee therefore “stands in the shoes” of the assignor, and cannot attack any previous transaction of the assignor, unless the assignor could have done so, and then only for the same causes.

Creditors’ rights to' maintain suits against the assignor to. set aside his previous transactions', on. the ground of fraud as against them, belong to them, and' not to the assignor, and he therefore cannot assign or transfer the same. An assignee does not become clothed, by virtue of an assignment, in the absence of a statute so. providing, with the'power or right to. question previous transfers of the assignor, on the ground of fraud as against creditors. The following authorities are conclusive on this proposition: Housel v. Cremer, 13 Neb. 298, 14 N. W. 398; Rumsey v. Town (C. C.), 20 Fed. 558; Estabrook v. Mes sersmith, 18 Wis. 551; Hawks v. Pritzlaff, 51 Wis. 160, 7 N. W. 303; Warner v. Jaffray, 96 N. T. 248, 48 Am. Rep. 616; Flower v. Cornish, 25 Minn. 473; Bouton v. Dement, 123 Ill. 142, 14 N. E. 62; Brown v. Deford, 83 Md. 297, 34 Atl. 788; Francisco v. Aguirre, 94 Cal. 180, 29 Pac. 495; First Nat’l Bank v. Menke, 128 Cal. 103, 60 Pac. 675.

It must be remembered that defendant only seeks, by the new matter alleged in the answer*, to interject the question as to whether the alleged transfer from Wilkinson to Babcock was fraudulent and void as to creditors. We have seen that he cannot raise any such question. Therefore the allegations amounted to nothing more in the case than mere waste paper, and the plaintiff might have admitted them all to be true, and yet be entitled to recover. Again, it appears that plaintiff alleged his title generally, and that defendant’s' answer contained a general denial. Under the-decisions of Gallick v. Bordeaux, 22 Mont. 470, 56 Pac. 961, and Kipp v. Silverman, 25 Mont. 296, 64 Pac. 884, the defendant could have given in evidence under such denial facts constituting any legal defense, and therefore the allegations of. the new matter in the answer, if by way of defense, would have been mere redundancy.

[35]*352. The defendant insists that, by Section 4491 of the Civil Code, any transfer by Wilkinson to Babcock, if “not accompanied by an immediate delivery, and followed by an actual and continued change óf possession of the things transferred,” is fraudulent and void as against Wilkinson’s creditors, and against any person, on whom his estate “devolved in trust for the benefit of others than himself.” His counsel insists that defendant is a person on whom the estate of Wilkinson “devolved in trust for the benefit of others than himself.” The Supreme Court of California has had the same question before it in the case of Francisco v. Aguirre, 94 Cal. 180, 29 Pac. 495, and First Nat’l Bank v. Menke; 128 Cal. 103, 60 Pac. 675, and, in our judgment, conclusively settled the matter adverse to defendant’s contentions. In Francisco v. Aguirre, supra, in construing the section of the California Civil Code which is identical with our Section 4491, the court says: “An estate is said to ‘devolve’ upon another when by operation of law, and without any voluntary act of the previous owner, it passes from one person to another; but it does not devolve from one person to another as the result of some positive act or agreement between them. The word is itself of intransitive signification, and does not include the i*esult of an act which is intended to produce a particular effect. It implies a result without the intervention of any voluntary actor.

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Bluebook (online)
74 P. 64, 29 Mont. 31, 1903 Mont. LEXIS 153, Counsel Stack Legal Research, https://law.counselstack.com/opinion/babcock-v-maxwell-mont-1903.