Farwell v. Crandall

120 Ill. 70
CourtIllinois Supreme Court
DecidedJanuary 25, 1887
StatusPublished
Cited by7 cases

This text of 120 Ill. 70 (Farwell v. Crandall) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farwell v. Crandall, 120 Ill. 70 (Ill. 1887).

Opinions

Mr. Justice Mulkey

delivered the opinion of the Court:

A. H. Norton made a voluntary assignment to J. Hughes Fisher, for the benefit of creditors. Fisher having refused to act, the county court of Cook county, by an order duly-entered of record, on the 22d day of January, 1886, appointed L. E. Crandall assignee, in the place of Fisher. Upon such appointment, Crandall, on the samé day, gave bond, took possession of the effects and estate of Norton, and entered upon the duties and trust imposed by the assignment. On the 3d day of February, 1886, John Y. Farwell & Co. recovered a judgment in the Superior Court of Cook county, against Norton, for $4361.34, upon which an execution was issued, and returned by the sheriff of the county, nulla bona. The plaintiffs in the judgment thereupon caused a summons to be sued out of said Superior Court against the assignee, commanding him to appear therein, and answer, as garnishee of Norton. Upon being served, the assignee presented to the county court a petition, setting forth the foregoing facts, and averring that the only property held or controlled by him, in which the said Norton was in anywise interested, was held by virtue of the assignment in question, and prayed that the plaintiffs in the garnishee proceeding might be restrained from further prosecuting the same. The plaintiffs in the judgment answered the petition, admitting the facts therein stated, but charged, by way of defence, that the assignment was made to hinder, delay and defraud creditors. The county court, ■upon this presentation of the matter, made and entered of record the following order:

“It is hereby ordered by the court, that said plaintiffs, John Y. Farwell et al., in the garnishment cause above named, their agents and attorneys, and each and every one of them, be and they are hereby restrained and enjoined from further prosecuting said garnishment cause against said L. E. Crandall, assignee, as aforesaid, and against any of the funds in his possession, as aforesaid, the court, however, not passing herein upon the validity of said assignment. It is further ordered by the court, that said plaintiffs in said garnishment cause above named, shall be protected in this court, and allowed to set up herein, on proper proceedings, their claims against said assignment that are or can be set up, in any way, in said garnishment proceedings, and that all rights, if any, accruing to them by reason of commencing said garnishment suit, be and the same are hereby preserved to them, to be prosecuted and recovered in this court by proper proceedings or petition. ”

On the appeal of defendants in the petition, this order has been approved and affirmed, respectively, by the circuit court of Cook county, and the Appellate Court for the First District, and by their further appeal the case is brought to this court.

The appellants concede that the right and jurisdiction of the county court, under a valid assignment, to enforce the trust and distribute the fund lawfully in the hands of the assignee, is, under our statute, exclusive; but they insist that the validity of the assignment itself, though regular on its face, may be attacked in another tribunal, on the ground of fraud. To permit suits to be prosecuted in other courts for such a purpose, would necessarily interrupt and greatly embarrass the collection, and distribution of the insolvent’s estate among his creditors, and in many cases would practically defeat the objects of our Voluntary Assignment act, one of which is, doubtless, to enable the insolvent debtor to make a just and equitable division of his estate among all his creditors, in such a way as to repel, as far as possible, any suspicion of its entire fairness. The most effectual way of accomplishing this object, is, doubtless, the one which was adopted, viz., to require his .effects to be administered by some disinterested person, under the constant guidance and direction of an enlightened and impartial tribunal, open at all times, and to all persons alike, having or claiming to have any interest in or claim upon the insolvent’s estate, and desiring to be heard upon' the same. Under the scheme adopted, the individual interest of each creditor or claimant will naturally lead him to keep a watch overfall, the others, and to see that no claim is allowed against the insolvent’s estate that is fictitious or unjust. By reason.of all the claims and parties in interest being in and before the game court, this may easily be done, and with comparatively but little expense. The statute, it will be remembered, expressly authorizes the creditors to contest the claims of one another,, whenever, in their judgment, they think proper to do so. Now,, it is quite clear, the objects of .the act in these respects could not be attained if any and everybody having a claim, real or pretended, against the insolvent’s estate, were permitted to assert them in other courts, by replevying or attaching the assets in the assignee’s hands. If this could be done, a dozen suits, in as many different courts, might all be going on at one time. In such case, could he give them all his personal attention ? If not, how would he know which to attend to and which to neglect, if all should equally demand his presence ? And if, as in the present case, the creditors were not before these courts, as they probably would not be, who would protect them ?

We might go on, almost without limit, suggesting embarrassments and difficulties that would result from permitting other courts to interfere .after the jurisdiction of the county court has once attached; but we forbear, with the additional remark that the most serious objection to the view in question is, that it is clear the legislature intended that the estates of insolvent debtors, when assigned for the benefit of creditors, should be administered by the county courts, and not other-tribunals. As already remarked, this is conceded as a general proposition, but it is claimed the rule does not apply where the assignment is fraudulent. The trouble with this theory is, that it involves an interference with the administration of the insolvent’s effects by the county court, before that fact has been judicially ascertained. It is an error to suppose that the jurisdiction of the county court depends upon the validity of the deed of assignment. For the purposes of jurisdiction, it is sufficient that there has been an assignment, in fact, for the benefit of creditors. This is conclusively shown by the well recognized doctrine that a fraudulent assignment is voidable at the election of the creditors, only; hence, if the latter do not object, the court may nevertheless go on and administer the assets. This, of course, the court could not do if its jurisdiction depended upon the absence of fraud in making the assignment. In such case, any creditor not desiring to submit to the fraudulent instrument is not bound to do so, and he has the right, at least as to himself, to have it set aside; but he is not, for reasons already stated, permitted to go into some other tribunal to have this done. The county court having already full power and jurisdiction over the entire subject of the assignment, and the assets being in custodia legis, that is the proper forum in which to raise and settle the question. If the decision of that court, when made, is not satisfactory, the right of appeal lies as in other cases. There can be no possible hardship in this.

The view here taken was first indicated in the ease of Freydendall v. Baldwin, 103 Ill. 330. In Hanchett v. Waterbury, 115 Ill.

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Bluebook (online)
120 Ill. 70, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farwell-v-crandall-ill-1887.