Bennett v. Denny

Berry, J.

The holding of this court (In re Mann, 32 Minn. 60 ,) that an assignment under our insolvent law is not invalidated by the fraudulent intent of the assignor, has recently been followed and sanctioned in Simon v. Mann, ante, p. 412, and we see no occasion to re-examine it. In the case at bar fraud is charged upon the as-signee as well as the assignor, and in that particular the defendant claims that it differs from In re Mann. But we agree with the trial court that the difference is unimportant, and that the principle of In re Mann is applicable to fraud of the assignee also. The considerations presented in the opinion in that case, except such as relate to the criminal or penal liability of the assignor, are entirely applicable to fraud of the assignee; and in addition to what is there said it is to be observed that, by section 9 of the insolvent law, the court in which *533 the assignment may be said to be pending, is authorized “for any proper cause” to remove an assignee and appoint another in his stead, and is required to order a removal upon the vote of two-thirds in number and amount of the creditors. This provision appears to be based upon the idea that the assignment may be made to an incompetent, dishonest, or otherwise unfit assignee, and that, nevertheless, the assignment shall stand, and the property be distributed among the creditors under it. It is also said that this case is distinguished from In re Mann by the fact that here the attachment upon which the assignment was based was collusive and fraudulent. Whether there is any way in which fraud in such an attachment can be taken advantage of to upset an assignment, we need not now inquire. Certainly the attachment gives the district court jurisdiction of the assignment, and that jurisdiction cannot be attacked collaterally, as is attempted to be done in this instance.

It remains to consider the effect of the action of the federal circuit court. It seems that, prior to the making of the assignment in question, the defendant, as United States marshal, by virtue of process of the circuit court, had attached the assigned property. The plaintiff (the assignee) made application to the circuit court to be permitted to intervene in the action in which the attachment issued, and to become a party defendant therein, and for the dissolution of the attachment. Upon a hearing, leave to intervene and become a defendant was granted, but the motion to dissolve the attachment was denied. It is contended by defendant, if we understand him, that the order refusing to dissolve the attachment was a species ol judgment in favor of his right to hold the goods attached under the writ of attachment,, and that the plaintiff, having become a party to the proceedings in the circuit court, cannot proceed against the marshal for the conversion of the assigned property while the attachment is undissolved. This contention overestimates the force and effect of the order refusing to dissolve an attachment. It was merely “the decision of a motion or summary application,” which “is not to be regarded in the light of res adjudicata, or as so far conclusive upon the parties as to prevent their drawing the same matter in question again in the more regular form of an action. ” Kanne v. Minn. & St. *534 L. Ry. Co., ante, p. 419. It was a decision, not upon a right of property, but upon the question whether, upon the facts before the court, an attachment should be dissolved. By becoming a party defendant to the suit in the circuit court, the plaintiff probably put himself in a position to contest the existence of the cause of action which was the subject of that suit. But that subject was not whether the attachment was valid and proper or not, or where the right of property in the attached goods was. These questions he was at entire liberty to raise and litigate in any other proper tribunal. So far as we are able to discern, these views are in entire harmony with Buck v. Colbath, 8 WalL 834, relied upon by defendant.

Order affirmed.