Colorado § 6-10-102 - General assignment.

§ 6-10-102. General assignment.

Any person may make a general assignment for the benefit of the person's creditors by deed duly acknowledged. When filed for record in the office of the clerk and recorder of the county where the assignor resides or, if the assignor is a nonresident, where the assignor's principal place of business is in this state, such deed vests in the assignee in trust for the use and benefit of such creditors all the property of the assignor, excepting only such property as is by law not subject to levy and sale under execution, subject, however, to all valid and subsisting liens.

Source: L. 1897: p. 94, § 2. R.S. 08: § 175. C.L. § 6242. CSA: C. 12, § 2. CRS 53: § 11-1-2. C.R.S. 1963: § 11-1-2. L. 2026: Entire section amended, (HB 26-1426), ch. 334, p. 2007, § 41, effective August 12.

ANNOTATION

I. General Consideration.

II. Requisites and Form.

III. Title of Assignee.

I. GENERAL CONSIDERATION.

Annotator's note. Cases material to § 6-10-102 decided prior to its earliest source, L. 1897, p. 94, § 2, have been included in the annotations to § 6-10-102.

A general assignment is an act of bankruptcy. A general assignment, filed and recorded in pursuance of the statutes of Colorado, falls far within the established rule that the general assignment declared by the bankruptcy act to constitute an act of bankruptcy embraces any conveyance at common law or pursuant to statute by which the assignor intends to make and does make an absolute appropriation of his property not exempt from levy to pay all his debts, although there may be some defect in the conveyance or some failure to comply with some law or statute in the proceeding he takes to effectuate his intention which does not prevent the actual appropriation of his property for the benefit of his creditors. Moore v. Yampa Mercantile Co., 287 F. 629 (8th Cir. 1923).

There is neither in terms nor by implication any duty cast upon an insolvent to dispose of his property by a general assignment. May v. Tenney, 148 U.S. 60 (1893).

II. REQUISITES AND FORM.

An assignment not made in accordance with this section is only a common-law assignment. McMinn v. Harrison, 93 Colo. 5, 23 P.2d 944 (1933).

An instrument that does not purport to be a transfer of all the grantor's property, but only of certain described items, together with incidentals used in connection with such, is, on its face no general assignment. May v. Tenney, 148 U.S. 60 (1893).

When the deed in general terms purports to convey all the property and afterwards enumerates and designates the property assigned, such special designation controls the general words, makes the assignment special instead of general, and renders the deed inoperative and void. Palmer v. McCarthy, 2 Colo. App. 422, 31 P. 241 (1892).

Where there are in the deed of conveyance no words evidencing either the desire or intention to convey all the property of the assignor, the only conclusion that can be legally deduced from the language used is that the assignment is to be special of the property enumerated. Palmer v. McCarthy, 2 Colo. App. 422, 31 P. 241 (1892).

Moreover, the fact that a debtor transfers all of his property to secure the payment of particular debts does not constitute an assignment for the benefit of creditors generally. Poundstone v. Holt, 5 Colo. App. 66, 37 P. 35 (1894).

Deed may refer to inventory for particular description of property. Where, according to the express language of the instrument, reference to the inventory is for a more full and particular description and not by way of limitation, then, it is the manifest and clear intention of the parties to convey all the property which they owned which is not exempt from execution, and this has always been held sufficient. Graham Paper Co. v. Sanderson, 8 Colo. App. 427, 47 P. 904 (1896).

III. TITLE OF ASSIGNEE.

Section applies whether assignor is solvent or insolvent. This provision regulating the administration of trusts created by voluntary assignments for the benefit of creditors applies whether the assignor is solvent or insolvent. In re Carlson's for Music, Inc. v. Gould, 176 Colo. 172, 489 P.2d 1038 (1971).

Such an assignment implies a trust and contemplates the intervention of a trustee. May v. Tenney, 148 U.S. 60 (1893).

The intent of this section appears to be to make the assignee not the mere representative of the assignor but the trustee of the assignor and the creditors for the purpose of marshaling the assets of the assignor for pro rata distribution among the creditors, returning the surplus, if any, to the assignor. Clark v. Bright, 30 Colo. 199, 69 P. 506 (1902).

Hence, the assignee becomes vested with right and title to the estate of the assignors for the purpose of paying the debts of the assignors in full, if sufficient therefor; if not, then ratably, except only as to the preference created by the said legislative enactment. And the assignee becomes charged with the duty of collecting the personal assets, wherever they might be found, and of distributing the proceeds of the entire estate among the creditors according to the provisions of this enactment. Ray v. Hiller, 11 Colo. 445, 18 P. 622 (1888).

Furthermore, it is by the language of the deed that the title of the assignee must be determined, without reference either to the inventory or the list of creditors. Falk v. Liebes, 6 Colo. App. 473, 42 P. 46 (1895).

If all requisites are not met assignee takes no title. If a deed of assignment fails in the essential particular specified by this section the want cannot be supplied by judicial decision; the deed would not invest the assignee with any title, and creditors could proceed against the debtor in the same manner and with the same effect as if no assignment had been attempted. Kellogg v. Thropp, 4 Colo. App. 470, 36 P. 447 (1894).

Property vests in assignee only when instrument is filed. The plain and necessary inference from the provision of this section that the instrument "when filed, etc. shall vest" is that when not filed it shall not vest. Kinney v. Yoelin Bros. Mercantile Co., 76 Colo. 136, 230 P. 127 (1924).

This means a filing for record in the proper county. Spangler v. Sanborn, 7 Colo. App. 102, 43 P. 905 (1895).

Nevertheless, this section does not make the record of the deed of assignment constructive notice to creditors, and the fact that notice is specifically provided for elsewhere, (as in § 6-10-108), is evidence that it was not intended to be such. Kinney v. Yoelin Bros. Mercantile Co., 76 Colo. 136, 230 P. 127 (1924).

Thus, title does not pass if instrument is not recorded. A power of attorney given by a debtor to an assignee for the benefit of creditors does not pass title as against creditors where it is not recorded in accordance with this section. Kinney v. Yoelin Bros. Mercantile Co., 76 Colo. 136, 230 P. 127 (1924).

However, a deed of assignment does not destroy valid antecedent liens upon the assignor's property, nor the right of the holder to enforce them. Nat'l Bank of Commerce v. Graham, 16 Colo. App. 498, 66 P. 684 (1901).

Since the assignee takes the property subject to all subsisting valid liens. Nat'l Bank of Commerce v. Graham, 16 Colo. App. 498, 66 P. 684 (1901).

Where a corporation makes a general assignment for the benefit of its creditors and a receiver, later appointed, files a motion in the assignment proceedings asking the dismissal of the assignment proceedings and an order to compel the assignee to turn over to the receiver the property of the corporation, the title of the assignee to the property cannot be determined in such a proceeding. Flint v. Powell, 10 Colo. App. 66, 50 P. 45 (1897).