Clark Shoe Co. v. Edwards

• Citation: 21 S.W. 477,57 Ark. 331
• Parties: CLARK SHOE CO. v. EDWARDS
• Decision Date: 25 February 1893
• Court: Supreme Court of Arkansas

21 S.W. 477

57 Ark. 331

CLARK SHOE CO. v. EDWARDS

Supreme Court of Arkansas

February 25, 1893

Appeal from Ouachita Circuit Court, CHARLES W. SMITH, Judge.

Judgment affirmed.

T. W Hardy and Sanders & Watkins for appellant.

Where a failing debtor makes an assignment purporting to convey all his property for the benefit of creditors, but intentionally withholds a valuable part, the assignment is fraudulent and void. 46 Ark. 405; 54 id. 128; 53 id. 86. The court erred in modifying the instructions by striking out the word "valuable" and inserting "material."

Thornton & Smead for appellees.

The unintentional omission of assets by accident or oversight does not invalidate an assignment. 85 N.Y. 469. In 46 Ark 405, the withholding was intentional. The fraud must be in the assignment itself, and not in some act before or after the assignment. Wait, Fr. Conv. sec. 320; 18 Ark. 124; 54 id 128. But Edwards was entitled to $ 500 exemptions, and only claimed $ 41. He was entitled to the additional items, and even if he intentionally withheld them, his creditors cannot complain as they were not subject to his debts.

2. This court in 54 Ark. 128 approved an instruction in which the word "material" was used in the same sense that it is used in the instructions in this case.

Harvey & Hill for appellees.

53 Ark. 87 simply holds that the withholding must be intentional, as was also held in 46 id. 410. In 54 Ark. 128 the court held that the intentional withholding of an immaterial portion of the property does not vitiate the assignment. No acts subsequent to the assignment vitiate it. 88 Penn. St. 167; Burrill on Assignments, sec. 361; 68 Wis. 442; 54 Ark. 126.

OPINION

BATTLE, J.

During the year 1890 M. L. Edwards and T. J. Edwards did a mercantile business in Stephens, in this State, under the firm name and style of M. L. Edwards & Co. On the 15th of October, 1890, T. J. sold his interest in the property of the firm to M. L. Edwards, and M. L. assumed and agreed to pay the indebtedness of the partnership, and continued the business until the second of January, 1891, when he discovered that he was unable to pay his debts. On that day or the next he conveyed by deed to D. Newton, in trust for the payment of his creditors, assets which he represented therein to be all his property, except his homestead and personal property of the value of $ 41. On the 14th of the same month the Clark Shoe Company brought an action, in the Ouachita circuit court, against M. L. and T. J. Edwards to recover $ 340 owing to it by the firm of M. L. Edwards & Co., and sued out an order of attachment against them on the ground that they "had sold and conveyed or otherwise disposed of their property, with the fraudulent intent to cheat, hinder and delay their creditors." The property assigned was attached, and Newton, in a complaint filed in the action, claimed it, and, in a trial before a jury, recovered a verdict therefor. Judgment was rendered accordingly, and plaintiff appealed.

In the trial the plaintiff asked the court to instruct the jury as follows: "The jury are instructed that the assignee, D. Newton, may be perfectly innocent, and yet the assignment void. And if you believe from the evidence that M. L. Edwards intentionally withheld any valuable part of his assets from the assignment, then you will find the assignment void, and you will find for plaintiff." But the court modified this instruction by striking out the word "valuable" and substituting therefor the word "material," and gave it as modified; and at the same time at the instance of Newton instructed the jury that, "in determining the question as to what constituted a material part," they could "compare the amount omitted with the amount included in the assignment." The evidence on which these instructions were asked showed that...