Court Opinion

ID: 6964791
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:51:54.290589+00
Date Added: 2024-06-11T16:08:34.167509
License: Public Domain

Mr. Chief Justice Magruder, dissenting: George Silverman, of Danville, Vermilion county, signed a written instrument, which recited that he was indebted to certain persons and was desirous of securing the payment of such. indebtedness and which purported to sell, assign and transfer a stock of goods and certain personal property in a store building in Danville, to Daniel Cohen, in trust, to sell the same, and out of the proceeds of sale, pay the indebtedness. Cohen assumed the trust and was proceeding to execute it as directed. The instrument, however, under which he acted, was not acknowledged or recorded, as required by. sections 1 and 3 of' the act in reference to voluntary assignments,' passed by the ; Legislature of this State and approved May 22, 1877, and he ; did not file an inventory and appraisement with the clerk of , the County Court, nor enter into bond before the clerk of such court, as required by section 3 of the act. Thereupon appel- ■ lants, as creditors of Silverman, applied to the County Court for the appointment of a new assignee under section 12 of said , act, and obtained an order removing Cohen, and appointing John Gf. Thompson as assignee in his place. The instrument in question may be conceded for the purposes of this case to be an assignment, but inasmuch as it ; was not acknowledged or recorded, either in the recorder’s office or the County Court, it was not such an instrument as i called for or justified the exercise of the power of appointment ■ conferred upon that court by section 12. A voluntary„assignment for the benefit of creditors, as spoken ■ of in the Act of 1877 has no other or different meaning than ¡it had before the passage of that act. Long before 1877 such' , an assignment had a well defined signification in this State and in all other States. According to the common accepta- : tion of the term it is a transfer without compulsion of law by a debtor of his property to an assignee in trust, to apply the same or the proceeds thereof, to the payment of his debts, and - to return the surplus, if any, to the debtor. As to the form and contents of it, it has always been understood in this State to be a written deed of conveyance, executed by the assignor as party of the first part, to the assignee, as party of the second part, reciting the grantor’s indebtedness and inability to pay, and conveying his property, real and personal, by apt • words of sale and transfer to the assignee in trust, to take possession of and sell the same, and to collect the outstanding debts, and out of the proceeds to pay the creditors. Sometimes it provided for preferences, and sometimes not. Schedules were generally attached to the deed, describing the property and naming the creditors. That such was the understanding as to its general form and character, will appear from an examination of the following cases decided by this court. • Cross v. Bryant, 2 Scam. 36; Conkling v. Carson, 11 Ill. 503; Kimball v. Mulhern, 15 id. 205; Mclntire v. Benson, 20 id. 500; Wilson v. Pearson, 20 id. 81; Bowen v. Parkhurst, 24 id. 257; Sackett v. Mansfield, 26 id. 27; Myers v. Kinzie, 26 id. 36 ; Finlay v. Dickerson, 29 id. 9; Pierce v. Brewster, 32 id. 268; Whipple v. Pope, 33 id. 334; Field v. Flanders, 40 id. 470; Gibson v. Rees, 50 id. 383. Such a deed of assignment as is above described, is referred to and held good in Cross v. Bryant, supra; and in Sackett v. Mansfield, supra, such an one is thus spoken of by this court: “This deed made an exhibit in the cause, fulfills in our judgment, all the requirements of a valid deed of assignment. * * * It is for the benefit of the assignor’s creditors,” etc. The first sentence o-f the first section of the Act of 1877, assumes that the meaning of a voluntary assignment for the benefit of creditors is already well understood and, therefore, no new definition of the term is attempted. A study of the language, in which the various provisions of the law are expressed, will demonstrate that its framers intended to designate just such a deed of assignment as is described in the foregoing decisions. The assignment contemplated by the act, must be in writing. This is so, because it is required to be acknowledged and recorded and it is so, whether the requirement to acknowledge and record be directory or mandatory, because the fact that it is spoken of as an instrument that may be acknowledged and recorded, shows that it must be in writing. The assignment, contemplated by the act, must be one single instrument of transfer. It is so treated and spoken of in almost every section. The debtor is required to annex to it an inventory of his property, and a list of his creditors, and although the absence of these does not make it fraudulent or void, yet an instrument, to which an inventory and list may be attached, cannot very well he constructed out of a number of acts done by the debtor or out of a number of notes, mortgages or other documents signed by him, and passed out of his hands into the possession of different parties. The assignee is required to give notice of the assignment, by mail, and by publication, to the creditors, and it would hardly be possible to write or print a notice of an assignment which does not come into existence until it is constructed out.of acts and circumstances by the determination of a judicial tribunal. The contents of the assignment mentioned in the act must be substantially the same as those of the ordinary deed of assignment referred to in the text books and judicial decisions. It is spoken of in sections 2 and 12 as an instrument in which an assignee is “named” and in section 1, as an instrument by the terms of which title to property becomes vested in the assignee. If it vests title to property not named in the attached inventory, but “comprehended within the general terms of the” assignment, it must certainly contain apt words by which a grantor therein named transfers to a grantee therein named the title to property described in specific terms in the assignment, or in the inventory attached to it. It is spoken of in' sections 3 and 12 as an instrument, by which a trust is “confided” and in which a trust is embraced, and in sections 1 and 3 as an instrument made for the benefit of creditors and authorizing the collection of debts and the sale of property. The act contemplates no such thing as a constructive assignment. The thing about the act, which is new, is the relation which it brings about between the assignment and the County Court. By section 18, of article 6, of the Constitution, County Courts are made courts of record and are given original jurisdiction in certain specified matters, of which the subject of voluntary assignments for the benefit of creditors is not one, “and such other jurisdiction as may be provided for by general law.” Under the latter clause of said section 18, as thus quoted, the Act of May 22, 1877, was passed by the Legislature. Therefore, County Courts derive their powér to deal with voluntary assignments from an act of the Legislature and not from the specific mention of that subject in the Constitution itself. Hence, the jurisdiction conferred upon them by the Act of 1877, is a special statutory jurisdiction, and must be exercised in the mode prescribed by the statute. The act in question makes a previously executed assignment the basis and foundation of the jurisdiction of the County Court. An assignment already made is a preliminary requisite to the exercise of any jurisdiction whatever by that court. The sole power of the court is to oversee and regulate the administration of a trust, which has been created independently of it, and without its aid. It acts upon an instrument which has been prepared for it 'in advance. The County Court is mentioned for the first time in section 3, after the mode of executing the assignment is provided for in section 1, and after the assignee is directed by section 2 to notify the creditors to present their claims to him. The person, who is required by section 3 to file an inventory and appraisement with the clerk of the County Court, is the assignee. An assignee is defined by Bouvier in his law dictionary to be “one to whom an assignment has been made.” The existence-of an assignee presupposes the existence of an assignment, to-which he owes his appointment. He is to file ail inventory, etc., of “said estate.” The words “said estate” refer back to-“the debtor’s estate” mentioned in section 1, to which the assignee had obtained title through an assignment made before the time for filing the inventory had arrived. The form of the assignee’s bond prescribed by section 3 speaks of a trust that had therptofore been confided to the assignee. 'Section 7 provides, that assignees shall be subject to the order and supervision of the County Court “in the execution of assignments, ” that is to say, in the performance of the duties imposed by the assignment. The assignment, specifying and defining the duties to be pérformed, must have been previously executed. The power to decide whether any creditor, whose claim is questioned may or may not share in the assigned funds, and to determine how and when such funds shall be distributed, is conferred upon the County Court by sections 5 and 6 merely for the purpose of enabling the assignee to carry out more fully and fairly the provisions of the assignment theretofore made. The object of the act is to secure a more public and honest distribution of assigned effects by placing the assignee under the control of a judicial tribunal, while he is engaged in administering a trust, originally confided to him, not by the court but by the assignor. Section 1 é confers full authority and jurisdiction upon County Courts “to execute and carry out the provisions of this act." Those provisions do nothing more than point out the mode in which the supervisory control here referred to is to be exercised. Such being the object of the act, and such being the character of the jurisdiction conferred by it, it nowhere provides that an assignment can be made under the direction of the County Court, and nowhere confers upon that court the power to determine whether a particular instrument is an assignment or not, or whether an instrument admitted to be an assignment has or has not been executed by the assignor. That the County Court should stop to hear evidence and determine such matters as these was never contemplated by the act. The delay, created by such a course of procedure, would be wholly inconsistent with the summary character of the jurisdiction intended to be conferred. It would hinder that expeditious conversion of the assets into money and that speedy distribution of the funds, which it is the design of the law to secure. It follows from the views herein expressed that, when the assignment is first brought under the supervisory control' of the County Court, it should be accompanied by proper evidence of its execution. The court can not afford to lay its iands upon an instrument alleged to be an assignment, if it be doubtful whether it was made by the debtor or not, or if the fact of its execution must be established by testimony and after a litigated contest. Inasmuch as the making of the assignment must precede the exercise of jurisdiction, proof that the assignment has been made must be present when the jurisdiction attaches, and as soon as it attaches. The certificate of acknowledgment is the best and highest evidence of the execution of the assignment, and is attached to and goes along with it, so that its execution is apparent at once upon the inspection of it. For this reason the requirement contained in the last sentence of the first section of the act must be construed to be mandatory and not directory. That requirement is as follows: ■“Every assignment shall be duly acknowledged and recorded in the county where the person or persons making the same reside, or where the business in respect of which the same is made, has been carried on; and in case said assignment shall embrace lands, or any interest therein, then the same shall also be recorded in the county or counties in which said lands may be situated. ” The word “shall” is not held to be directory where an advantage is lost, a right destroyed, or a benefit sacrificed, either to the public or to any individual, by giving it that construction. Wheeler v. City of Chicago, 24 Ill. 105. The advantage to be derived by the creditors from an expeditious administration of the trust created by an assignment will be less apt to be lost, if the assignment is brought into the County Court, with a certificate of acknowledgment to show -that the debtor made it, and a certificate of record to afford •prima facie evidence of its delivery to the assignee. Himes v. Keighblingher, 14 Ill. 469. The absence of negative words in the requirement above quoted is not conclusive that the statute was not designed to be mandatory. Cooley on Const. Lim. marginal page 75. Affirmative language may be so strong as to imply a negative. Potter’s Dwarris on Stat. p. 68; 1 Kent’s Com. marg. p. 467, note B; Dis. Town of City of Dubuque v. City of Dubuque, 7 Iowa, 262. The use of the word “every” in the requirement that “every assignment shall be duly acknowledged,” is broad ■enough to imply a negative of any other mode of proof, so far, at least, as the assignment is to be used as the basis of the jurisdiction of the County Court. A similar requirement in a New York statute has been held to be mandatory. Hardeman v. Bowen, 39 N. Y. 196; Britton v. Lorenz, 45 id. 51; Fairchild v. Gwynne, 16 Abbott’s Pr. Rep. 23. If an affirmative statute, which is introduetive of a new law, direct a thing to be done in a certain manner, that thing shall not, even although there are no negative words, be done in any other manner. Potter’s Dwar. on Stat. p. 72; Hardeman v. Bowen, supra. That the Act of 1877 introduced an entirely new law as to the mode of carrying out the provisions of voluntary assignments, and as to the character of the jurisdiction to be exercised by County Courts, there can be no question. But the particular requirement now under consideration introduced a new rule in regard to the acknowledgment and recording of assignments. Its language is, that, in case the assignment embraces lands, it shall also be recorded in the ■county where the land is situated. By implication, therefore, an assignment which does not embrace lands but personal property only, as in the case at bar, must be acknowledged and recorded. For the first time in the history .of the legislation of this State, a transfer of personal property not designed to be a mortgage or to have the effect of a mortgage, was required by .the act of 1877 to be acknowledged and recorded. Mortgages of personal property had theretofore been required to be acknowledged in a specified manner under the chattel mortgage act, but such had not been the requirement in regard to any other kind of instrument transferring personal property except a chattel mortgage, or trust deed in the nature of a chattel mortgage, etc. Bey. Stat. Chap. 95, Sec. 1. A voluntary assignment for the benefit of creditors, which embraces nothing but personal property, is neither a chattel mortgage nor a-trust deed in the nature thereof, (Crow v. Beardsley, 68 Mo. 438,) and yet it must be acknowledged and recorded. Such-acknowledgment may be taken anywhere, the limitation in section 1 as to the residence or place of business of the assignor having application to the recording only, and not to the-acknowledgment of the instrument. Zimmerman v. Willard, 114 Ill. 364. Nor does section 1 require the acknowledgment of an assignment embracing only personal property to be any different from one which embraces both real and personal estate, or real estate only, either as to the form of the acknowledgment or the character of the officer before whom it is taken. The features here noticed were new, and first appeared in the Act of 1877. But the great object of all rules of interpretation is to discover the true intention of the law. In arriving at this intention the whole and every part of the statute must be taken and compared together. Sedgwick on Cons, of Stat., etc., page 325 ; Bis. Town of City of Dubuque v. City of Dubuque, supra. What was the intention of the act as to the effect to be given to the recording of the assignment ? Section 1 requires the assignment to be recorded in the county where the maker of it resides, or where the business in respect of which it is made has been carried on, and also in the county where the land lies, if .it embraces land. The place-where it is to be recorded, under this section, is unquestionably the recorder’s office of the county. But section' 3 requires it to be also recorded in the County Court. The assignee is therein directed to “file with the clerk of the County Court where such assignment shall be recorded” a true and full inventory, etc. In Hanckett v. Waterbury, 115 Ill. 220, section 3 is interpreted as providing for the filing and recording of the assignment in the County Court. The County Court, where it is recorded, must be the County Court of the county named in section 1, that is, of the county where it is recorded in the recorder’s office. This appears from the language used in section 5, where it is provided that the notice to the creditor, whose claim is excepted to, shall be served and be returnable “at the next term of the County Court in said county.” The words “said county” cannot be construed to refer to any other county than that in which the assignment is recorded in the recorder’s office as specified in section 1. It. certainly.could never have been the design of the act that the assignment should be recorded in the recorder’s office of the county of the maker’s residence, and also in the County Court of another and different county where his business had been carried on. It follows that the assignment must first be recorded in the recorder’s office before it is filed in the County Court. The County Court, where it is to be filed, cannot be determined or designated until it is first recorded in the recorder’s office. It must be recorded in the County Court of the county where it has been placed on record in the recorder’s office. Inasmuch as the assignment may be recorded in the recorder’s office either of the county where the debtor resides, or of the county where he has carried on his business, then, if it is allowable to first record it in the County Court of one of these counties, it might afterward be recorded in the recorder’s office of the other county. I conclude, therefore, that the recording of the assignment in the recorder’s office is a prerequisite to its record in the County Court. The assignor and assignee are not the only, parties interested in the assignment. All the creditors of the former are interested in it. One of the objects of recording it in the recorder’s office, is to give the creditors notice not only that an assignment has been made, but notice also of the terms and provisions of the instrument. One of the evils designed to be remedied by the act was the secrecy of assignments. The object of filing the assignment in the County Court is to bring it and the assignee named in it under the jurisdiction and control of the court. The act nowhére provides for bringing the assignee before the court by the issuance and service of process upon him. As was said in Hanchett v. Waterbury, supra, ‘“upon the making, filing and recording of the assignment, with the lists and schedules annexed, the County Court, wherein such assignment is filed and recorded * * * at once acquired jurisdiction,” etc. It is very evident that the provisions for the recording of the assignment, as contained in sections 1 and 3, must be mandatory, as the recording in the recorder’s office is necessary to designate the court which is to take jurisdiction, and the recording in the court is necessary to confer jurisdiction upon the court so designated. A part of section 12, under which this proceeding was instituted, is as follows: “In case any assignee shall fail or neglect, for the period of twenty days after the making of any assignment, to file an inventory and valuation and give bonds as required by this act, it shall be the duty of the county judge of the county where such assignment may be recorded, on the application of any person interested" as creditor or otherwise, to appoint some one, or more discreet and qualified person or persons, to execute the trust embraced in such assignment,” etc. In order that the court may know that the twenty days have passed, it must know when the assignment was made. Here again the necessity of holding the requirement as to the acknowledgment and recording of the instrument to be mandatory, is apparent. It may not be possible to show by oral testimony when the assignment was made, but such date can easily and at once be determined, if the assignment, with its accompanying certificate of acknowledgment has been recorded as directed in sections 1 and 3. It will be noted that in section 12, the recording of the assignment is referred to for the third time. The new assignee is to be appointed by the “county judge of the county where such assignment may be recorded.” If no assignment has been recorded, the power of appointment does not exist. It can not be said that the person here referred to is the county judge of the county where it is allowable or permissible to record the assignment. The word “may” is here used in the same sense in which it is used in the last line of section 1, where it is said that the assignment “shall also be recorded in the county * * * in which said land may be situated.” It there refers-to the possibility that there may be land in more than one county. So in section 12, the assignment may be recorded either in the county "where the debtor resides or in that where he has carried on business. The judge of that one of these counties, in which it may happen to be recorded, shall make the appointment. But it is necessary that there should have been a previous recording of the assignment in both the recorder’s office and the County Court. Otherwise, the court would have no jurisdiction over the assignee and no power to remove him and appoint his successor. Section 12 gives the power to appoint a new assignee in case the old one fails or neglects “to file an inventory and valuation and give bonds as required by this act,” that is by section 3 of the act. Section 3 requires the assignee to file an inventory and valuation “with the clerk of the County Court where such assignment shall be recorded.”" This language presupposes that the assignment has been recorded in the County Court before the inventory and valuation are filed there. The latter are filed in a court where the assignment has already been recorded for the purpose, among other things, of fixing the amount of the bond to be given. I am, therefore, of the opinion that the power of appointment conferred by section 12 does not exist except in a case where the County Court has obtained jurisdiction by the recording of the assignment in that court. If this be not the correct construction then either the Assignment Act is unconstitutional or section 12 is to be treated as nugatory for the want of machinery to carry it into effect. It is claimed by counsel for appellants, that the county judge may appoint a new assignee under section 12, even though the assignment has not been acknowledged or recorded, either in the recorder’s office or the County Court. If this be so, what follows ? Under the construction thus contended for, every assignee in every assignment made in the State is peremptorily compelled to go into the County .Court and submit himself to the supervision of that court by filing an inventory and appraisement and entering into bonds, or in default of doing so, is .subjected to the penalty of being removed by the county judge from his office and supplanted therein by a new assignee. This is vesting County Courts with exclusive jurisdiction over the administration of trusts and the removal of trustees, so far as voluntary assignments for the benefit of creditors are concerned. The administration of trusts and the removal of trustees are well established grounds of equitable jurisdiction. By section 12 of article 6 of the Constitution, “The Circuit Courts shall have original jurisdiction of all eases in law and equity.” The Legislature has no power to deprive them of this jurisdiction. ■ Myers v. People, 67 Ill. 503; Darling v. McDonald, 101 id., 370; Howell v. Moores, 127 id. 67. It can only confer upon County Courts concurrent and not exclusive jurisdiction in these matters. Therefore, if the construction sought to be put upon the act by the appellants should be held to be correct, it would impose upon this court the necessity either of declaring the whole act unconstitutional or of holding section 12 to be void, so as to eliminate it and leave the balance of the act to stand. The assignee named in the assignment by the debtor has an interest which he cannot be deprived of without being heard. He has become vested with the title to the property. Before the County Court can remove him and appoint some one in his place, as provided in section 12, he must in some way be brought before the court. If he has filed no assignment therein nor in any way submitted to its jurisdiction before the appointment of a new assignee is applied for, how is the County Court to bring him in and get jurisdiction over him? The act provides no process and furnishes no machinery for that purpose. The citation mentioned in section 7 is to be issubd against an assignee already under the control of the court. It is true that section 14 confers upon the County Court “full authority and jurisdiction * * * to execute and carry out the provisions of this act.” But under this general clause, the court would have, no power to devise and invent for itself a mode of procedure by which it could stretch-out its arms and bring before it the assignee and creditors, all of whom are interested in the appointment of a new trustee, and are necessary parties to an application for that purpose. It is the province of the Legislature to prescribe the mode of procedure to be adopted by courts in bringing parties before them. Chapter 22 of the Revised Statutes, which provides for the exercise of chancery jurisdiction by Circuit Courts, specifies what sort of a summons must issue and how it must be served and returned and how non-residents may be brought in by publication, etc. Chapter 37 of the Revised Statutes, wherein County Courts are vested with jurisdiction in certain common law cases, uses these words: “The process, practice and pleadings in said court in common law cases, shall be the same as in the Circuit Court in similar cases,” etc. The Assignment Act contains no such provisions as these nor any provisions of any kind, as to the mode of exercising the power of appointment conferred by section 12. In Burns v. Henderson, 20 Ill. 284, it was said by Mr. Chief Justice Caton: “Wherever it is possible we must so construe the statutes as to make them harmonize with the Constitution.” The construction here given to Section 12, namely that it contemplates the appointment of an assignee in the place of one who has already been brought under the jurisdiction of the County Court by the recording of the assignment therein, makes that section, as well as the balance of the act, harmonize with the Constitution. . * * * I think that the judgment of the Appellate Court, which held the appointment of a new assignee in the place of Cohen to be erroneous, should be affirmed. 6