Court Opinion

ID: 7967574
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:02.027961+00
Date Added: 2024-06-11T16:34:41.235195
License: Public Domain

Vanderburgh, J.
The defendant, as surviving partner of the firm of Zimmerman & Co., made an assignment for the benefit of creditors, and thereafter it was stipulated between the - attorneys of plaintiff, who was an attaching creditor of Zimmerman & Co., and the attorneys for the assignor and assignee, that the assignee should “sell and dispose of certain personal property belonging to the trust estate, and to pay with the proceeds of sale, and money now on hand, all debts and liabilities of said partnership, as far as the same will pay, pro rata, and to perform any and all other duties of said assignee, without any orders of said court, except that the final account will have to be approved by said court: provided, that all creditors represented by the attorney of plaintiff do not hereby in any manner waive any right which they or any of them may have to refuse their pro rata share offered to be paid by said assignee, or any other right which they now do or may hereafter have in the premises, under the law: and further provided, that all persons interested in said assignment shall have the privilege and right to investigate the affairs of said assignment, and if dissatisfied, to apply for relief in the manner provided by law.”
Afterwards the plaintiff attached the assigned property in the hands of the assignee through the process of garnishment, and he insists that the assignment is void because it does not provide for a distribution of the assigned property among all the creditors of the insolvent, individual as well as partnership, but among the partnership creditors only, of which plaintiff is one. It is very clear, we think, that the terms of this stipulation preclude the plaintiff from assailing the assignment. Conceding, without determining the ques*4tion, that the assignment is voidable at the election of creditors, it is competent for them to waive their objections, and consent to allow the assignee to execute the trust. As a general rule, those creditors who thus assent to and affirm an assignment, with knowledge of the facts, cannot be permitted to assail its validity. Chaffee v. Fourth Nat. Bank, 71 Me. 526; Rapalee v. Stewart, 27 N. Y. 310.
Here it is claimed that the invalidity appears on the face of the assignment, but the plaintiff clearly recognizes and assents to it, and expressly authorizes the assignee to proceed under it. The stipulation is not nullified by the reservation of his right to reject his dividend, “or of any other legal right which he might have in law.” He must be presumed to have known his legal rights, and this reservation is qualified by what precedes, in so far, at least, as to preclude him from attaching the property or disputing the assignment while the property remained in the hands of the assignee, and he continued in the execution of the trust, which would be an act of bad faith, in view of the terms of the stipulation, both towards the assignee and other assenting creditors.
It is sufficient to rest our decision upon this ground, without considering other questions in the case.
Order affirmed.
(Opinion reported 52 N. W. Rep. 974.)