Adler-Goldman Commission Company v. Phillips

• Decision Date: 17 October 1896
• Parties: ADLER-GOLDMAN COMMISSION COMPANY v. PHILLIPS
• Court: Arkansas Supreme Court

37 S.W. 297

63 Ark. 40

ADLER-GOLDMAN COMMISSION COMPANY v. PHILLIPS

Supreme Court of Arkansas

October 17, 1896

Appeal from Independence Circuit Court JAMES W. BUTLER, Judge.

Judgment affirmed.

Rose Hemingway & Rose and Gustave Jones for appellant.

1. The interplea should have been transferred to the chancery docket with the rest of the case.

2. The deed was plainly intended as an assignment. 54 Ark. 430; id 6. The provision that on payment it is "to become void and all of said property to revest in the grantors," does not affect the question. Burrill, Assignments, p. 695, appendix sec. 2, (6 Ed.) As the law would imply a condition of that sort, its insertion does not change the quality of the instrument. 18 Ark. 123; Brown, Leg. Max. sec. 519; 59 Ark. 278. See also 58 Ark. 294; 3 Pars. Cont., sec. 272; 56 Ark. 314. A fund is here raised to be distributed to creditors. 56 Ark. 314; 23 N.E. 646; 131 Ill. 251; Burrill, Assignments, sec. 2, n. 2. The conveyance possesses every element of an assignment. (1) It is made by merchants of their entire stock in trade, notes and accounts. (2) It is made to pay debts, as far as the assets extend. (3) It is made to raise a fund to pay these debts. (4) It reserves no right of redemption. (5) The condition was broken as soon as made, and the grantee was entitled to immediate possession. See 52 Ark. 50; 53 id. 538; id. 101. The deed stipulates for a method of sale different from that prescribed in the statute regulating assignments, and is void. 59 Ark. 64; 37 id 150; 47 id. 367; 53 id. 88; 54 id. 429; id. 64; 18 id. 123, 125; 53 Mo.App. 107; Bump, Fr. Conv. 47.

3. Whether regarded as a mortgage or as an assignment, the conveyance to Phillips was plainly fraudulent and void on its face. The mortgagors were to remain in possession, to sell the goods in the regular order of business, collect debts, deposit proceeds in bank for mortgagees, deducting only necessary expenses of mortgagors, and "the living expenses of" mortgagors. 24 N.Y. 364; 82 Ala. 467. A mortgage of a stock of goods, with provision that the grantor shall remain in possession, carrying on the business in the usual way, is void, as against attaching creditors, unless the mortgagee takes possession before the attachment lien is fixed. 95 Mo. 132; 6 Am. St. Rep. 32 and note; 46 Ark. 127; 6 D. C. 273. By this last provision, the mortgagors reserved for themselves a support for life, or as long as the mortgagees should choose to keep other creditors at bay. That this clause rendered the mortgage void is plain. There never was but one case holding the reverse,--15 Johns. 571, reversing 2 Johns. Ch. 564, and this case has been repeatedly overruled. 2 Bigelow, Fraud. Cony. 272; 6 Hill, 438; 116 N.Y. 410; 89 N.Y. 270, 280; Bigelow, Fraud. Cony. p. 272, n. 6; 2 Comstock, 371; 6 Binn. 338; Wait, Fr. Cony. sec. 326; 55 N.W. 108; 11 So. 726; 12 S.E. 375; 107 N.C. 405; 89 Ala. 561; 19 P. 346; 17 Ala. 554; 69 Mo. 441; 43 Wis. 116; 91 Ala. 401; 6 Wall. 78; 31 Ill.App. 67; 37 Mo. 500; 15 id. 459; 25 Or. 15; 126 Ill. 525; Burrill, Assignments (6 Ed.), sec. 167; 47 Ark. 347; 15 Am. & E. Enc. Law, p. 775, n; 13 Wis. 629; 54 Ark. 418.

4. A new trial should have been granted on the ground of surprise. 23 Neb. 485; 38 Iowa 434; 5 How. (Miss.) 539; 9 Bush, 66; 80 Cal. 330; 81 id. 268; 59 Ark. 162; 17 F. 667; 32 Conn. 402, 22 Ind. 107; 31 Conn. 334; 53 Wis. 169; 74 Iowa 227; 62 Cal. 263; 5 Burrow, 2631.

Morris M. Cohn, for appellee.

1. The interplea of Phillips was properly tried before a jury. Having taken a change of venue, appellant could not afterward allege that the court had not jurisdiction. 156 U.S. 680; 156 id. 689-92; 157 id. 198, 201; 13 How. 307. The doctrine of estoppel is as applicable at law as in equity. 13 How. 307; 2 Whart. Ev. sec. 836; 25 Ark. 108, 112; 52 id. 458; 24 id. 584. While it has been held to be the duty of the court to transfer equitable issues to the chancery docket (39 Ark. 248; 49 id. 20; 52 id. 411, 415), it has been decided that a mere transfer to equity does not give a right to equitable relief. 31 Ark. 597; 47 id. 205. But the issue in this case was a purely legal one, and to deprive Phillips of a trial by jury, would be unconstitutional. 56 Ark. 391, 396; 49 id. 492, 498. At any rate, a trial by jury was permissible. It lay in the discretion of the chancellor. 48 Ark. 426; Sand. & H. Dig. sec. 374; 58 Ark. 446, 451. Matters of form, as getting on the wrong docket, are disregarded. 34 Ark. 93, 105. If erroneous, it is harmless. 46 Ark. 542; 43 id. 535; 27 id. 306; Sand. & H. Dig. sec. 5772.

2. No error was committed in trying the intervention before the attachment issue. Phillips had nothing to do with the attachment issue. He could not be heard on that issue. 47 Ark. 31; 71 F. 151; 33 Ala. 526; 47 id. 125; 17 S.C. 116, 120. No motion for continuance was filed. Sand, & H. Dig. secs. No merit was shown in the motion for a 5799, 5799. new trial, on the ground of surprise. 24 Ark. 264; sec. 26 id. 496; 29 id. 225; 33 id. 91; 24 id. 659; 41 id. 229. The ground of countinuance, or for setting aside a judgment, must be meritorious. 59 Ark. 162; 33 Cent. Law J., 28; 34 P. 352; 52 Kas. 743; 18 S.E. 953; 34 P. 294: 9 Utah 338; 35 Ill. App, 361.

3. The deed was not void on its face, and, if not, was not void for anything proved in the case.

(a) It is not an assignment, but a deed of trust. 57 Ark. 222; 58 id. 293; 53 id. 101; 54 id. 229; 56 id. 314; 59 id. 270. The old doctrine of 52 id. 30 and 54 id. 6, is suspended by these later and better decisions. See also Elphistone, Int. Deeds, Rule 9, pp. 40-46; 2 White & Tud. L. C. in Eq. part 1, p. 89; 32 S.W. 493; 33 Ark. 119, 237; ib. 762. Such a trust would be enforced, even in the absence of a trustee, by a chancery court. 4 Ark. 302; 53 id. 124, 130. On the question of intention, the verdict is conclusive. 54 Ark. 229.

(b) The deed is not fraudulent because it provides that until default the debtors "may proceed to sell * * * goods in the regular order of business for cash, and to collect outstanding debts, and shall pay * * * the amount of sales, * * * etc., after deducting only the necessary expenses," etc. Until default the trustee was not entitled to possession, and the deed was duly recorded. Jones, Ch. Mortg., sec 381 (2 Ed.); 139 U.S. 266, 271; 3 Cr. 73, 89; 15 N.Y. 9, 120; Bump, Fr. Conv. (2 Ed.) 40; 1 Jones, Mortg. Real Prop. (2 Ed.) secs. 771-2; 41 Ark. 193; 152 U.S. 527; 123 id. 436; 152 id. 534; 58 Ark. 297; 46 id. 129; 46 id. 131; 55 id. 77; 18 id. 123; 23 Ind. 285; 22 Kas. 128; 25 P. 888; 69 Tex. 161; 19 S.W. 705; 29 P. 698; 26 id. 706; 23 N.W. 386; 19 id. 657; 17 N.E. 159; 29 P. 985; 60 F. 346.

4. The instructions given fully cover the case, and it was not improper to refuse other instructions. 46 Ark. 141; 52 id. 180; 37 id. 108; 35 id. 585.

Yancey & Fulkerson, J. W. Phillips, and M. M. Stuckey, also for appellee.

1. The court properly refused to transfer to equity. 58 Ark. 445; 38 id. 329; 15 id. 128; 11 id. 180; Sand. & H. Dig. sec. 5707.

2. The court properly refused to declare the deed an assignment. It was a deed of trust. 32 Ark. 255; 60 id. 433; 23 id. 264; 4 Am. St. 461; 28 id. 528; 19 id. 907; 106 U.S. 654; 42 id. 521; 5 S.W. 636; 58 Ark. 295; 54 id. 229; ib. 428.

3. The court properly refused to declare the instrument void on its face. 123 U.S. 436-442; 55 Ark. 77; 58 id. 296.

4. The court properly refused a new trial on the ground of surprise. 16 Am. & E. Enc. Law, 516; 18 Ark. 574; 20 id. 62; 41 id. 231; 26 id. 503; 17 Nev. 417; 76 Ga. 21; 3 Sm. & M. (Miss.), 439.

OPINION

BATTLE, J.

Adler- Goldman Commission Company commenced an action against Charles Bloom, Bun Bloom, and Morris Bloom, partners doing business under the name and style of Bloom Bros. and C. Bloom & Co., on two notes and an open account, and sued out an order of attachment, and caused the same to be levied on certain property.

Joseph W. Phillips filed his complaint in the case, and claimed the property under the following instrument:

"This indenture, made and entered into by and between Charles Bloom, Ben Bloom and Morris Bloom, partners as C. Bloom & Co., parties of the first part, Joseph W. Phillips, party of the second part, trustee. and the Lawrence County Bank, R. Lambeth, Kaminer, Prinz & Co., Isaac Less, Dave Bloom, Schwab Clothing Company, H. Arndt, and the Little Rock Mill and Elevator Company, parties of the third part, witnesseth:

That whereas, the parties of the first part are now indebted to the parties of the third part as follows: The Lawrence County Bank in the sum of three hundred and seventy-one dollars and seventeen cents ($ 371.17), as evidenced by their promissory note of this date, payable in thirty days with 10 per cent. interest from date until paid, with I. Less surety; to R. Lambeth in the sum of five hundred dollars ($ 500), as evidenced by their promissory note of January, 1893, and clue and payable on the 1st day of July, 1893, with 10 per cent. interest from date until paid, with I. Less as surety; to Kaminer, Prinz & Co. in the sum of ten hundred and forty eight dollars and seventy five Cents ($ 1,048.75), which is to become due and payable in equal installments of three hundred and forty nine dollars and fifty eight cents ($ 349.58), as is evidenced by their three promissory notes of this date, the first one of which is to be due and payable 60 days after date, the second one is to be due and payable 90 days after date, and the third and last one to become due and payable 120 days after date, each of which is to bear interest at the rate of 8 per cent. per annum from maturity until paid; to I. Less in the sum of three hundred dollars ($ 300), as is evidenced by their promissory note to become due and payable 120 days...