Crow v. Beardsley

• Decision Date: 31 October 1878
• Citation: 68 Mo. 435
• Parties: CROW, Appellant, v. BEARDSLEY.
• Court: Missouri Supreme Court

68 Mo. 435

CROW, Appellant,

v.BEARDSLEY.

Supreme Court of Missouri.

October Term, 1878.

Appeal from Audrain Circuit Court.--HON. G. PORTER, Judge.

Petition filed May 5th, 1875, for goods sold and delivered by plaintiff to defendant, George Beardsley. On the same day an attachment was issued and levied upon a stock of general merchandise, the property of defendant, Beardsley. W. H. Kennan interpleaded, setting up a deed of trust executed by Beardsley to him in consideration of $1.00 paid, and the debt and trust thereinafter mentioned and in trust for the following purposes. * * The deed then sets out the debts of the beneficiaries, none of them being due, and provides that if the debts be paid at their maturity, the deed should be void, otherwise to remain in full force; and in case of default, provided for a public sale of the property by the trustee, after notice, and an application of the proceeds to the payment of the debts specified. The only peculiarity about the deed was that it put the goods in the possession of a third party until default in the payment of the debts. The deed was acknowledged and recorded on the day of its execution and before the attachment. The plaintiff's claim was not mentioned in the deed. On the trial, on motion of respondent, the court instructed the jury as follows: 1. The court instructs the jury that the deed made by Beardsley to Kennan, read in evidence, was a deed of trust to secure the payment of the debts therein mentioned, and is valid and good against plaintiff herein, unless the jury should believe from the evidence that said deed was made with the fraudulent intent, on the part of Beardsley, to hinder, delay and defraud his creditors, and that the creditors secured by said deed either had knowledge of or participated in such fraud. 2. The court instructs the jury that although they may find from the evidence that Beardsley owed other debts than those mentioned in the deed to Kennan, still the jury must find for plaintiff, unless they further find that the deed to Kennan was made by Beardsley for the purpose and with the intent to defraud such other creditors, and that the parties secured by the deed to Kennan knew of such fraudulent intent. Verdict and judgment for interpleader. Plaintiff appeals.

H. Clay Ewing with Thomas H. Musick and John M. Gordon for appellant, cited Burgert v. Borchart, 59 Mo. 80; Read v. Pelletier, 28 Mo. 173; Bigelow v. Stringer, 40 Mo. 195; Potter v. McDowell, 31 Mo. 62; Manny v. Logan, 27 Mo. 528; State v. Benoist, 37 Mo. 500; Ensworth v. King, 50 Mo. 477; Henderson v. Henderson, 55 Mo. 534.

Macfarlane & Trimble with W. H. Kennan for respondent.

1. VOLUNTARY ASSIGNMENTS.

HENRY, J.

Both appellant's and respondent's counsel seem to labor under the impression that the first section of the act in relation to voluntary assignments. W. S. 150, avoids all assignments which give a preference among creditors. We are not inclined to place that construction upon the section. It provides that, “every voluntary assignment, etc., made by a debtor to any person, in trust for his creditors, shall be for the benefit of all the creditors of the assignor, in proportion to their respective claims.” In other words, whether one or more of the creditors be named it shall nevertheless inure to the benefit of all. By the 39th section of the act of 1855, “every provision in any assignment, hereafter made in this State, providing for the payment of one debt or liability in preference to another, shall be void; and all debts and liabilities, within the provisions of the assignment, shall be paid pro rata from the assets thereof.” This provision is no longer in force. That section permitted the debtor to prefer creditors by an assignment, but forbade a preference of one or more over others named therein. It did not avoid an assignment giving such preference, but only that provision making the preference. Shapleigh v. Baird, 26 Mo. 326. Section one of the act now in force has a wider scope, and was designed to prevent any preference of creditors whatever by assignment. Nothing in the section indicates that an assignment preferring a portion of the creditors should be void; but the most reasonable construction of the section is, that the assignment should stand and inure to the benefit of all, as well those not named as those named in the assignment. If the counsel are correct in their view, that the deed executed by Beardsley is an assignment, they had no occasion to resort to an attachment, because they would have had equal rights under the deed with those named therein, and could by proper proceedings have compelled the trustee to discharge his duties under the assignment law.

2. “ASSIGNMENT”: deed of trust.

But is the deed executed by Beardsley an assignment? “An assignment is more than a security for the payment of debts; it is an absolute appropriation of property to their payment.” Burrell on Assignments, vol. 1, p. 12. The same author distinguishes between assignments and deeds of trust in the nature of mortgages. He says, page 15: “In most of the States assignments in trust are frequently employed for a double purpose--ultimately as modes of provisions for the payment of debts, but intermediately as instruments of security against default of payment by the debtor. Hence they are in many cases drawn with a condition that if the grantor pay the debt provided for within a specified time, the trustee shall reconvey to him the property, or that the deed shall thereupon be void, or e converso that if the debtor do not pay the debt by a day named, the trustee shall sell the property and apply the proceeds in payment.” The distinction is, that an assignment, “is a conveyance to a trustee for the purpose of raising funds to pay a debt, while a deed of trust in the nature of a mortgage, is a conveyance in trust for the purpose of securing a debt...