Court Opinion

ID: 7967337
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:51:49.102537+00
Date Added: 2024-06-11T16:34:40.835191
License: Public Domain

Gilfillan, C. J.
The nature of the instrument under which the garnishee defendant claims title to the property is, as the plaintiff claims it to be, a common-law assignment for the benefit of creditors. Although it is not very clear that the assignor had at its date any creditors who did not assent to by signing it, we may assume that he had, and that, as to them, the assignment is fraudulent, and consequently void. There is no evidence of any intent to defraud any who might become creditors after its execution; that it was made with any reference to or in contemplation of future debts of the assignor; and there is nothing in its character, nor in the acts of the parties under it, to make it operate as a fraud upon such creditors. The plaintiff is a subsequent creditor, so that the question is presented, can a subsequent creditor avoid a conveyance by his debtor, not intended to nor operating to defr'aud him, on the ground that it was executed with intent to defraud existing credit-' *493ors ? This court has always held he cannot. Bruggerman v. Hoerr, 7 Minn. 337, (Gil. 264;) Stone v. Myers, 9 Minn. 303, (Gil. 287;) Sanders v. Chandler, 26 Minn. 273, (3 N. W. Rep. 351;) Hartman v. Weiland, 36 Minn. 223, (30 N. W. Rep. 815;) Bloom v. Moy, 43 Minn. 397, (45 N W. Rep. 715.) One expression in Walsh v. Byrnes, 39 Minn. 527, (40 N. W. Rep. 831,) may point to a different conclusion, but the entire opinion is to the effect that to enable a subsequent creditor to avoid a transfer as fraudulent it must appear that its purpose was, or that its effect will be, to defraud him. An intent to defraud existing creditors may, in connection with other circumstances, be evidence on the question of intent to defraud subsequent or prospective creditors. Bank v. Pray, 44 Minn. 168, (46 N. W. Rep. 304.) There is no little confusion in the authorities on the point, there being many dicta to the effect, and some decisions directly holding, that a subsequent creditor may avoid a conveyance fraudulent as to existing creditors, and other decisions — the majority of the more modern decisions — holding the contrary. Few hold unqualifiedly that a conveyance is void as to subsequent creditors merely because made with intent to defraud creditors who were, such at the time of its execution. In most of the decisions of the former class referred to, the effect as to subsequent creditors is made to depend on the circumstances under which the conveyance with intent to defraud existing creditors was made. In this state, where the question of the fraudulent intent is one of fact, and not of law, the circumstances referred to in those cases would not make the conveyance void per se, but would be evidence of a fraudulent intent as to subsequent creditors. The evidence might be of such a character — as where the fraudulent intent appears by the instrument making the conveyance — as to be conclusive, and compel a finding of its existence. It seems reasonable that a creditor assailing a conveyance.by his debtor should stand on its intent or effect as to himself, and that A. ought not to be permitted to avoid it merely because it was intended to or will prejudice B. A conveyance may be made with intent to defraud existing, but without such intent as to subsequent, creditors, or it may be with intent to defraud only subsequent creditors, or it may be to *494defraud both classes. The purpose of the rule of the common law and of the statute which reasserts that rule is to defeat the intends ed fraud, which it does by making the conveyance void as to the persons intended to be defrauded, and who will be defrauded unless it be avoided. The statute, (13 Eliz. eh. 5,) which all subsequent statutes follow in substance, if not in terms, avoided the conveyance “only as against those persons, their heirs,” etc., “whose actions,” etc., “ are defrauded.” There is no warrant in it for holding that one class of creditors may avoid a conveyance merely on the ground that it was intended to, and, if sustained, will, defraud another class.
Judgment affirmed.
Mitchell and Collins, JJ., took no part in the decision.
(Opinion published 51 N. W. Rep. 475.)