Huddleson v. Polk

Oldham, C.

This was an action instituted by Orpheus B. Polk, as assignee of numerous creditors of the firm of Muir-Cowan Company, a partnership, doing business in Lincoln, Nebraska, against the sheriff of Lancaster county and the sureties on his official bond, for the failure of the sheriff to file a deed of assignment, executed and delivered to him as sheriff of said county by the firm of Muir-Cowan Company, within the time required by law; the petition alleges that, by reason of such failure and neglect, property and effects of the insolvent firm, which had been delivered to such sheriff as assignee, were taken from his possession by attachment proceedings instituted by other creditors, and that the amount and value of the goods so taken ivere equal to, or in excess of, the claims assigned to plaintiff. The sureties on the sheriff’s bond answered, alleging numerous defenses, which will be considered in the opinion. Plaintiff replied with a general denial of the facts alleged in the answer; there was a trial to a jury; the court directed a verdict for plaintiff in the sum of $2,839, which was accordingly returned, and judgment was rendered upon the verdict, and the defendant sureties bring error to this court.

The first contention is that the sheriff, when acting as assignee under the provisions of chapter 6, Compiled Statutes, acted under color of, but not by virtue of, his office, and hence the sureties on his official ’bond are not liable for such misconduct. This contention, however, flies in the face of the plain language of section 7, chapter 6, Compiled Statutes (Annotated Statutes, 3506), which says:

“Immediately upon the execution and delivery of any such assignment, the sheriff shall take possession of all the assigned estate, and preserve, insure, and safely keep the same for administration according to law, and the sheriff and his sureties shall be liable, upon his official bond, for the faithful execution of the trust created by such assignment, for the preservation of such assigned estate, and for the accounting for and paying over of all moneys derived therefrom.”

The next question urged is that the deed of assignment is absolutely void, because made for the purpose of hindering and delaying creditors, and therefore conveyed no rights to the assignee, even had he recorded it as provided by law. The same objection to this deed was urged before this court in Miller v. Waite, 59 Neb. 319, and it was there held that the deed was not void upon its face, and that its execution and delivery conveyed the effects of the insolvent estate to the sheriff as assignee. On a rehearing of this case in Miller v. Waite, 60 Neb. 431, it was held that the provisions of the statute requiring the deed to be recorded within 24 hours were mandatory, and a failure to file such instrument within the time limited by statute avoids the assignment and renders it of no force and effect. It follows from these conclusions that, had the sheriff recorded the deed within the time prescribed by statute, he would have conserved the property and impounded it for the benefit of creditors who filed their claims for allowance as provided for by chapter 6, supra; consequently, his failure to file the deed amounted to a neglect of official duty, for which he and his bond are liable to the extent to which creditors, who complied with the provisions of the assignment' act, have been injured. It clearly appears from the record that each of the creditors, for whom plaintiff acted as assignee, had filed their claims with the county court, and that such claims had been duly allowed, and the proof in the record shows that there were sufficient assets of the bankrupt estate to have paid these claims, had the deed been recorded and possession of the property retained by the sheriff as assignee. It is urged, however, in extenuation of the action of the sheriff, that he failed to record the deeds for 10 days by request of the assignors and their attorney, and because no registry fee was paid him by the assignors, at the time the deed was delivered to him. We think there is little merit in this explanation. When the sheriff accepted the deed and took possession of the property as assignee, it was his duty to comply with the statute by having the deed recorded, and the provisions of the statute were ample to reimburse him for any recording fees expended from the assets of the bankrupt estate. When he accepted this trust he should have executed it faithfully for the benefit of creditors as well as for the benefit of the assignors.

It is also urged by defendants that the plaintiff in this cause of action is not the real party in interest, and that therefore the action should abate. The evidence, about Avhich there is no dispute, shows that all the claims represented by plaintiff were unconditionally assigned to him by the various creditors which he represented; that the consideration of the assignment was the prosecution of the claims for one-half the amount which should be recovered as well as a release of attorney’s fees already earned by him in the prosecution of other suits for these creditors groAving out of the same failure. This assignment having been an unconditional conveyance of all title to, and right of action upon, each of the claims, was sufficient to authorize the maintenance of this suit in plaintiff’s name alone, Avithout joining any of his beneficiaries. Meeker v. Waldron, 62 Neb. 689; Allen v. Brown, 44 N. Y. 228.

It is suggested that even if plaintiff were permitted to recover he should only have been alloAved to recover a pro rata share of the entire indebtedness of the defunct firm; that the claims of adverse creditors, Avho proceeded by attachments and executions against and consumed the assets of the bankrupt estate, should be taken into consideration in fixing the amount of plaintiff’s recovery. It will be remembered that the amount of the claims filed with the county court in compliance Avith chapter 6, supra, was shown by the testimony to have been less than the value of the property for which a recovery was sought. Now, had the sheriff done his duty in recording the deed within the time fixed by statute these were all the creditors who would have been entitled to participate in the proceeds of the assigned property, and, consequently, they Avere the only ones injured by his negligent act. This principle is Avell set forth in Burrill on Assignments (6th ed.), sec. 441:

“Those whose claims assume a hostile attitude to the assignment can not claim any interest under it or insist on standing as parties to it. Thus, where a creditor had attached assigned property claiming that the assignment was invalid, he was not alloAved to enforce payment of his distributive share.”

It is finally contended by counsel for defendants that there was evidence in the record tending to show a recording of the instrument with the county clerk of Lancaster county which should have been submitted to the jury, and that in the face of this testimony it was error to direct a verdict for plaintiff. We have examined the record carefully to see if there is merit in this contention. In the first place, each of the ansAvers of defendants admitted that the deed was not filed for 10 days, and alleged, as an excuse, a request of the assignors to the sheriff, and the failure of the assignors to advance the fees necessary for the recording of the deed. This defense we have already considered. In the next place, the sheriff himself testified and said that he did not record the deed for 10 days because the assignors requested him not to do so, and because no fees were advanced for paying the expense of the recording. The deputy sheriff who had the matter in hand for his principal, and was in charge of the assigned estate, testified, in the first instance, that on the morning after the receipt of the - deed he went to the register of deed’s office to record the same; that the register demanded a fee of $1.25; that he communicated with counsel for the assignors and was told that they would not advance the fees at that time as they did not want the deed recorded yet. Upon being recalled the deputy sheriff testified that, after leaving the office of the register of deeds, he took the deed of assignment to the county clerk’s office; that some of the employees of the office were there when he entered; that he laid the deed down with 25 or 50 cents and told them to record it, and then communicated this to the attorney of the assignors who told him that they did not want the deed recorded then; that he took the deed away, and it was not offered for record for 10 days, when it was finally recorded with the register of deeds. We do not think there was anything in this testimony to submit to the jury on the question of a compliance with the statute in the matter of recording the instrument. While it is plain that the deputy sheriff went to the office of the county clerk with the intention of recording the instrument, it is equally plain that, by the advice of the attorney of the assignors, he abandoned this commendable purpose, and withdrew the deed before it was recorded in either the office of the register of deeds or of the county clerk. The deed conveyed both real and personal estate, and should have been recorded in both offices, and was recorded in neither until 10 days after its delivery to the sheriff.

‘We therefore conclude that the judgment of the district court is right and should be affirmed, which we accordingly recommend.

Assignment: Failure to Record Deed: Damages. Where, in an action on the official bond of a sheriff to recover damages for his neglect to file a deed of assignment under the provisions of section 7, chapter 6, Compiled Statutes, 1899, the defendants' object to the introduction of the only evidence offered which would tend to mitigate the damages and reduce the amount of the plaintiff’s recovery, thus causing its exclusion, they are not in a position to complain of the judgment as excessive. Hastings and Ames, CO., concur.

By the Court:

For the reasons given in the above opinion, the judgment of the district court is

Affirmed.