King v. Glass

34 N.W. 820, 73 Iowa 205

• Court: Supreme Court of Iowa
• Decided: October 26, 1887
• Status: Published

Opinions

Beck, J.

I. The deed of assignment under which the intervenor claims to hold the land is in conformity with the statutes of Illinois, the state of the residence of the defendants, the assignor, the assignee, and two of the plaintiffs. A court of that state, pursuant to the statutes thereof, has, and has exercised, jurisdiction in the matters of the assignment. The plaintiffs maintain that for various reasons the assignment, as to the lands in this state conveyed to the intervenor, is inoperative and void, and the attachments, therefore, hold the property as against the intervenor. Upon this contention the controlling questions in the case arise.

, , . l. appeal: soudat&n^f1' actions. II. A preliminary question, raised by plaintiffs, first demands consideration and disposition. It is insisted that, for the reason that the cases were not consolidated as one case, they cannot be presented here upon one record or one appeal; that, as there was only one bill of exceptions taken in the cases, they cannot be reviewed upon this appeal. It plainly appears that the questions of fact and law involved in the separate cases are the same, and that for this reason they were tried together in the court below. This was doubtless done for the reason that both time and expense would be saved in that manner of trial. We can conceive of no prejudice which may possibly result to plaintiffs by trying the causes together in this court upon one record. We have no doubt that the rights of all parties will be as carefully and successfully guarded in submitting the causes in that manner as would result from separate tiñáis upon separate records; and, in view of the great expense and possible delay which, by reason of separate records and trials, would be incurred by the parties, and the increased labor and loss of time which would be imposed thereby upon counsel and the court, we are clear in the opinion that the causes ought to be submitted upon the single record and appeal now before us. In these days of great increase in the expenses and time consumed in the trial of causes, which is felt to be a burden upon the people as well as the parties to the actions, the court should favor and enforce all lawful expedients for expediting litigation, and diminishing expenses connected, therewith.

2. assign-eat™ ored£n’ assignment? laws. III. It'is not disputed that the assignment as to the lands within this state is controlled by our law,— the lex loci rei sitce. This is true touching matters involving the sufficiency of the deed of assignment, and the enforcement of its conditions. If, therefore, the deed be invalid under our statutes, or its conditions be in conflict therewith, it does not affect the title of lands conveyed thereby situated in this state. We are therefore required to determine whether the deed of assignment and its conditions are in conflict with the statutes of this state. The statement and consideration of familiar principles of law will lead to correct conclusions upon questions arising upon this inquiry.

In the absence of statutes respecting his rights and powers, the owner of real estate may make any disposition of it by deed which does not conflict with the public good, as recognized and protected by what is called the public policy of the state, and is not in fraud of the rights of others. He may convey all of his property in payment of, or security for, his debts, or of any part of his debts; thus making preferences as to creditors. He may make a conveyance to a trustee for these purposes. But the statutes of this state restrict this right and this power, and declare that a general assignment of property for the benefit of creditors shall be without preferences, except so far as they are permitted by these statutes. In order to enforce such restriction upon the right and powers of the property owner, and protect his creditors, the statute provides that assignments for the benefit of creditors shall be under the control of the courts of the state, which have jurisdiction, by proper proceedings, to enforce the provisions of the law. These assignments are made by deeds which convey a trust estate, and clothe the grantee with the powers of a trustee, subject to the restriction of the statute. Of course, if these trust deeds are in conflict with the statutes pértaining thereto, they are void.

It cannot be doubted that a deed of assignment for the benefit of creditors may be made in a sister state by a non-resi_____dent of this state, and that, if its execution and acknowledgment accord with our statutes, it is valid. If the conditions of such deed are in harmony with our statutes, it is valid. It is not claimed that the execution, form and acknowledgment of the deed of assignment involved in this case fail to comply with our statutes. We are of the opinion that in its terms and conditions it is in substantial, not to say perfect, harmony with their provisions.

1--:chsposi-tion ol sur- ' plus. TV. It is insisted by .plaintiff’s counsel that the deed of assignment in question is void, being in conflict with our statutes, for these reasons: It contains the following conditions: “If, after the payment of all costs, t charges and expenses attending the execution of the trust hereby created, and the payment and discharge in full of all lawful debts due and owing by the said party of the first part, of every kind and description, that may have been proved against him, as provided in said act, any part or portion of. the proceeds of said sales and collections shall remain in the hands or control of the said party of the second part, or his successors in trust, he shall return same to said party of the first part.” The deed of assignment conveys all of the assignor’s property not exempt from execution, and is for the. payment of all his debts. But counsel- for plaintiffs insist that the clause above quoted limits payment of debts to those which “may .have been proved against him, as provided in said act,” meaning the statute of Illinois regulating assignments for the benefit of creditors. This statute forbids assignments with preference, and requires all the assets in the hands of the assignee to be devoted to the payment of the debts, under the approval and direction of the proper court. The creditors are required to file their claims, and issues are thereon formed, which are determined by trials in the court. After the expiration of three months, distribution of the funds of the estate is made to the creditors proving their claims, and we think that holders of claims proved at the time of distribution receive all the funds on hand. But distributions are made from time to time in the like manner, and all claims proved share in such distribution. These provisions, and others, pertaining to the acts and proceedings of the assignee in the distribution of the estate, and to the proof of claims, are substantially the same as those of our statute pertaining to the same subject.

_____ eñoeof’iaborl ers* wages. The Illinois statute prefers the wages of laborers and servants earned within three months next preceding the assignment, while our statute exempts earnings “for Personal services” within the same time. In this respect the Illinois statute is probably not so broad as our statute, and secures to the general creditors more nearly all the assets of the assignor than does ours. But a general creditor in Iowa cannot complain of this provision of the Illinois statute, for it is more to his advantage than the Iowa statute. A creditor for personal services might complain, but it does not appear that plaintiffs’ claims, or any one of them, are of that character. But surely it cannot be pretended that the preference of claims of laborers and servants is in conflict with our statute, which recognizes such preference, and possibly goes somewhat further. Our statute authorizes all preferences permitted in Illinois.

Counsel insist that, under the statute of Illinois, all the creditors may not receive payment, for some of them may not prove their claims. That is true; but this precise thing may result under the statutes of this state.

6.-. — : dNtloiio’fforOiR'u court: land in Iowa, It will be clearly seen that the trusts provided and created in the deed of assignment are completely in accord with our statute. If enforced, the requirements of its express provisions and its spirit will be per-x x formed. We must presume it will be enforced by the court of Illinois. The’case is this: A resident of Illinois, subject to the jurisdiction of its courts, is charged with trusts in a deed conveying land in this state. These trusts are in harmony with our statutes. Surely the court of Illinois, having jurisdiction of the trustee, may, by its order and decree, enforce the trusts, and the courts of this state will recognize the validity of such judicial action, and will not interfere to hinder or defeat it, by assuming jurisdiction of the land which is the subject of the trust, and diverting it to other purposes than those prescribed by the trust. (See Perry on Trusts, §§ 70, 71, and authorities cited.) Should doctrines be recognized which support the contrary view, immense property interests may thereby be sacrificed. It would be strange, indeed, if the courts of this state should hold as void deeds of trust and their enforcement in other states, all being strictly in harmony with our laws, for the reason that judgments and decrees for their enforcement must be, or were, made by the courts of a sister state. Sound reason, public policy, and the requirements of the law»of comity between the states, forbid it.

7. —: —7-: not proved, V. Counsel for plaintiffs insist, and cite many authorities to sustain their position, that, unless all the assets of the grantor under the assignment go to his creditors, and if any part goes to the assignor before the creditors are paid, the assignment is void. Doubtless, counsel’s position is correct.. But the difficulty is that it is not applicable to the facts of this case. Neither the deed of assignment nor statute of Illinois so provides. The facts that creditors receive nothing who fail to prove their claims, and that upon the final closing of the assignment any surplus remaining goes to the assignor, .provisions common to the statutes of Illinois and this state, are not in conflict with our position. The law presumes that the assignor is indebted only to creditors who prove their claims. If any one having a valid claim fails to prove it, he is barred of a remedy under the assignment proceedings.

Other discrepancies between the Illinois and Iowa statutes than those above referred to are pointed out by plaintiffs’ counsel, They pertain to the proceedings for the enforcement of the trust, and do not affect the rights of the parties concerned.

g____. Simanco*of°n" proceedings. The Illinois statute provides that, upon the assent of the assignor and a majority of the creditors, the proceeding under the assignment may be discontinued. No such provision is found in the Iowa statutes. No ac^on }ias been had under this provision, and, until had, the assignment is valid, and the trust will be enforced substantially in accord, as we have seen, with the laws of this state. Surely the courts of Iowa will not hold the trust void for the reason that .it may be discontinued by the courts of Illinois. The deed of assignment is valid, and conveys a valid title under our laws. Our courts will not hold the conveyances void for the reason that it may be set aside by proceedings in Illinois, as to persons and property within the jurisdiction of that state. All that need be said upon this point is that the trust still exists, and must be enforced, and such enforcement will not be in conflict with the statutes of Iowa. It may be that, should the Illinois courts attempt to discontinue the trust, the courts of this state could interfere as to property here; and it may also be true that, in case the trust is attempted to be enforced in conflict with the statutes of Iowa in any respect, our courts would interpose. But upon these points we express no opinion, further than to say that such a view would be more in accord with inter state comity than the one urged by counsel, namely, that the deed of trust ought to be held void.

__na ira4e°rritoriai cflect. VI. Counsel for plaintiffs insist that the deed of assignment can have no force and effect out of the state of Illinois, upon the ground that, as it is a proceeding authorized by the laws of Illinois, it can have no extra-territorial effect. As we have pointed out, the right and power of the grantor to execute the deed of trust existed independent of statutes. The statutes of Illinois, as.well as of Iowa, do not take away this right and power; they simply regulate its exercise, and impose restrictions thereon. The assignment was wholly voluntary, but subject to the restrictions of the Illinois statute. The assignee was chosen by the grantor. The statute made him subject to its regulations, He stands in a different position than do executors, administrators and assignees in bankruptcy or insolvent proceedings. These are appointed by the law, in proceedings in invitum, and are officers of the court appointing them. The assignment is voluntary, done in the exercise of inherent powers and rights of the assignor. The assignee acquires a trust estate in the property conveyed, not by virtue of an appointment as an officer of the court, but through the conveyance to him by the grantor. Other distinctions between the functions, rights, and powers of a trustee under a deed of assignment and the officers above named, readily suggest themselves. They may acquire title to lands in another state. The trust confided to them may be enforced by the proper court having jurisdiction of their persons. It will be observed that land is conveyed by the assignee, not by virtue of an order of a court, but by virtue of the inherent power of the holder of the title. The disposition of the fund arising therefrom is approved by the court, but the sale is not authorized by it. We observe that many cases cited by plaintiffs’ counsel, which involve proceedings by executors, administrators, assignees in bankruptcy, and assignees of insolvents, do not present rules applicable to this case.

10 _. for. mint?misiowaTaucf: oi equity.

íñ? raeditorsl' priority.

VII. The deed of assignment conveys all of the property of the assignor, and recites that it is “ fully and particularly enumerated and described in an inventory ” attached to the deed. One tract of land of 25 acres was misdescribed in the inventory. The grantor owned no other land than this tract, and the others which were correctly described, in Lee county. There can be no doubt that the misdescription was a mistake, and the recitation in the deed of assignment, and other facts, clearly show the purpose to convey this land. Equity will correct it, unless others would be defeated of rights thereby. A subsequent purchaser without notice would but plaintiffs are attaching creditors and can-n°t hold the land. Their lien did not attach to it, for the reason that the equitable title was vested in the assignee, who was the purchaser. An attaching creditor, even without notice, cannot hold land against a purchaser whose paper title is defective, and is not sufficient to give notice of his claim. We are of the opinion that the mistake in the description of the twenty-five-acre tract of land ought to be corrected as prayed for in the intervenor’s petition.

In our opinion, the court below erred in dismissing the petition of the intervenor. A decree should have been entered grantinghim the relief he prays for. The cause will be remanded for a decree in harmony with this opinion. Reversed.