Brown v. Wilkes

• Decision Date: 15 May 1922
• Docket Number: 361
• Citation: 241 S.W. 383,153 Ark. 545
• Parties: BROWN v. WILKES
• Court: Arkansas Supreme Court

241 S.W. 383

153 Ark. 545

BROWN v. WILKES

No. 361

Supreme Court of Arkansas

May 15, 1922

Appeal from Woodruff Circuit Court; J. M. Jackson, Judge; affirmed.

Affirmed. Motion denied.

Hughes & Hughes, for appellants.

The evidence was not sufficient to support the judgment.

If the instrument in question was a mortgage, the personal property was not subject to execution. 94 Ark. 296.

The instrument in question was an assignment for the benefit of creditors. 52 Ark. 43.

The court erred in adjudging that appellees were entitled to satisfaction out of the trust property in priority to other creditors. C. & M. Dig., § 489. The policy of the statute is to assure equality to all creditors. 83 Ark. 182; 133 Ark. 554.

Bogle & Sharp, for appellees.

The evidence was sufficient to sustain the judgment of the court.

In any action for the recovery of specific personal property, the jury must assess its value, and also the damages for the taking and detention of same. C. & M. Dig., sec. 8654; 104 Ark. 375.

In the absence of a demand for a separate valuation before the verdict or of objection to the verdict, the presumption is that the right is waived. 53 Ark. 411; 26 Kan. 320; 49 Ala 134.

Objections to deviations from the strict line of procedure which do not vitiate the judgment must be made in apt time. 51 Ark. 126; 51 Ark. 130; 1 Thompson's Trials, sec. 113.

The judgment of a court of competent jurisdiction is presumed to be right, unless the record of the court will make it appear affirmatively that it is erroneous. 124 Ark. 388; 44 Ark 744; 94 Ark. 115.

Replevin cannot be maintained against an officer who has the custody and possession of property under a valid execution. 4 Ark 525; 8 Ark. 563; 11 Ark. 658; 94 Ark. 384.

Replevin cannot be successfully maintained where the title rests on a void instrument. 10 Ark. 53; 19 Ark. 659; 26 Ark. 33; 69 Ark. 11.

Mathis & Trice, for appellees.

A mortgage is the conveyance of an estate or a pledge of property as security for the payment of money or the performance of some act, and conditioned to become void upon such payment or performance. An assignment is an absolute conveyance of title for the purpose of raising funds to pay the debts of the grantor. 2 Ruling Case Law, p. 662.

Where an instrument clearly indicates on its face that it is executed, not to secure bona fide creditors, but to enable the debtor to carry on his business under cover of another's name, the instrument is void. 152 U.S. 527. No general rule can be established by which conveyances can certainly be adjudged to be fraudulent or not. 22 Ark. 184; 53 N.Y.S. 513; 58 N.E. 773; 49 N.Y.S. 111.

OPINION

MCCULLOCH, C. J.

Certain creditors of J. A. Burt recovered separate judgments against him in the circuit court of Woodruff County and caused executions to be issued on the judgments and delivered to appellee, as sheriff of the county, who levied the writs on a lot of chattels as the property of Burt.

Appellants, R. G. Brown and R. T. H. Chambers, instituted the present action against the sheriff to recover possession of the property seized under execution, and they assert title to the property under a deed executed to them by Burt.

The property described in the deed executed by Burt to appellants is mentioned as road construction equipment, and consists of sixty-eight horses and mules, a lot of wagons, tractors, scrapers, shovels, crane, truck, graders, steam-rollers, and other equipment and tools used in road construction work. The names of Burt's creditors are mentioned in the deed, and the amount of the indebtedness, aggregating about $ 70,000, and there is a general provision in the deed that if there are found to be other creditors who have been omitted they shall be treated as beneficiaries under the deed.

Appellants are mentioned in the deed as trustees, and the instrument is designated by name as a mortgage. The deed contains the following clauses:

"Now, therefore, said mortgagor does hereby bargain, sell, convey, assign, transfer and deliver unto the trustees, their successors and assigns, his entire interest in all the described property, including all the road equipment aforesaid; all his right to collect retained percentage from any and all of said road improvement districts, and to all sums of money that may be due him upon his contracts with any and all of said road districts now or upon completion of the work, excepting, however, such part of the retained percentage in Road Improvement District No. 7, White County, as may be necessary to protect R. T. H. Chambers as indorser on notes of the mortgagor for $ 15,000, which retained percentage has already been assigned to him for that purpose.

"In trust, however, to collect the said debts due to the mortgagor, or to become due, to cause all of said contracts to be completed and performed as far as the same remains yet to be performed by the mortgagor, to incur whatever expense is necessary in employing agents for that purpose, or otherwise, to collect the proceeds thereof, to sublet said contracts, or any of them, or any part thereof, to sell and dispose (after the completion of the work) of all of said road equipment and material, and, after paying the expense of completing said contracts, to pay the remainder to the creditors of the mortgagor above-named pro rata."

"The said trustees are fully authorized and empowered by the mortgagor to execute any contract, or contracts, assignments, releases, vouchers, and any and all other papers, contracts, or vouchers, necessary to be executed in connection with the carrying out of said contract. They are authorized to receive and receipt for all moneys due the mortgagor under any and all of said contracts, or under any contract the mortgagor has heretofore made in respect of said operation, or any of them, and to receipt for the same, and their receipt shall be a full acquittance in the same manner as if signed by the mortgagor. And said trustee shall have the power also to compromise claims and to release, stipulate, or otherwise dispose of any controversies connected with said contracts, or any of them, or any part thereof, to purchase and contract for supplies, and to act as fully in the matter as the mortgagor might do if personally present.

"All sums of money due to the mortgagor in Arkansas under said contracts, or otherwise, shall be paid to said trustees. As soon as said trustees shall have collected a sufficient amount to pay ten (10%) per cent. or more of the debts hereby secured, a distribution shall be made by them of the moneys then on hand, and at every period thereafter when such accumulations amount to as much as 10% additional, a like distribution shall be made until all of said debts shall have been paid in full, or the properties hereby conveyed are fully liquidated.

"As fast as any contract shall have been completed or fully sublet to other parties, the said trustees shall sell and dispose at public or private sale any such part of the equipment and material belonging to the mortgagors as shall have been employed in that particular operation, and which has not been included in the subletting contract."

There is a clause near the end of the deed which provides, in substance, that at the expiration of fourteen months the trustees shall proceed to terminate the trust and sell all of the remainder of the property not otherwise disposed of, and that if, after paying all of the debts, there be a surplus, it shall be returned to "the mortgagor, his executors, administrators or assigns."

The trial of the cause resulted in a verdict in favor of appellee.

The bill of exceptions recites that the testimony adduced at the trial was confined to the record evidence of the judgments against Burt, the writs issued thereunder, and evidence of the value of the property seized by the sheriff, and the aforesaid deed under which appellants claim title.

The only question presented for our decision is, whether or not the evidence is sufficient to sustain the verdict.

Appellants were the plaintiffs below, and the burden was upon them to establish their right to recover possession of the property, and they rely solely upon the instrument executed to them by Burt, which is set forth in the bill of exceptions. The question of sufficiency of the evidence calls for an interpretation of the instrument.

While the language of the instrument characterizes it as a mortgage, it is, in fact, not that kind of an instrument, for it does not contain a defeasance clause, which is one of the essentials of a mortgage. The instrument is, in effect, a conveyance to trustees for the payment of a debt to creditors. It is an absolute appropriation...