Dorr v. Schmidt

• Decision Date: 06 November 1896
• Citation: 21 So. 279,38 Fla. 354
• Parties: DORR v. SCHMIDT et al.
• Court: Florida Supreme Court

21 So. 279

38 Fla. 354

DORR v. SCHMIDT et al.

Florida Supreme Court

November 6, 1896

Error to circuit court, Escambia county; W. D. Barnes, Judge.

Garnishment by Schmidt & Zeigler against C. H. Dorr on a judgment against R. M. Avery. There was a judgment for plaintiffs, and the garnishee brings error. Reversed.

Syllabus by the Court

SYLLABUS

1. The validity of an assignment for the benefit of creditors may be tested in garnishment proceedings against the assignee.

2. The act of 1889 (chapter 3891) regulating assignments for the benefit of creditors did not violate any constitutional provision.

3. A clause excepting such property as is exempt by law from forced sale in a deed of assignment of all the assignor's property for the benefit of his creditors does not render the instrument void for want of sufficient identification and description of the property, as being an attempt to convey an uncertain and undefined part only of a larger quantity or mass of property; nor does such clause, per se, make the assignment fraudulent as to creditors.

4. A deed of assignment purported to convey all of the assignor's property, real, personal, and mixed, except such as was exempt by law from forced sale; and at the time of its execution the assignor delivered all his property being personal, to the assignee, and then declared his intention to claim his exemptions out of the property assigned. Subsequently the assignee, deeming it to be to the best interest of all concerned, sold all of the assigned property, and paid the assignor a sum of money equal to the value of property exempt to him by law. Held, that the deed of assignment itself not providing for the payment of the exemptions out of the proceeds of the assigned property, and no fraud or collusion as to the execution of the instrument being shown, the subsequent allowance of the exemptions out of the sale of the assigned property did not render the deed of assignment fraudulent as to creditors. Whether the assignor was entitled to the money, under the circumstances or that the assignee should account to the creditors for the same, is not decided, as the question is not involved in this case.

5. A provision, in a deed of assignment conveying property to an assignee, that he take and hold the property, other than such as is exempt by law from forced sale, and dispose of the same so as to realize therefrom the greatest amount of money possible, and to the best interest of all concerned, does not avoid the deed on the ground that it vests in the assignee discretionary power to sell the property on a credit.

6. The generality of the description of personal property in a voluntary deed of assignment for the benefit of creditors will be sufficient, when, by the aid of parol evidence, a definite application of the terms may be made.

7. By the terms of a voluntary deed of assignment, the assignor assigned, set over, granted, bargained, and sold to an assignee named, all the property, real, personal, and mixed of the assignor, except such as was exempt by law from forced sale; and, at the time of the execution and delivery of the deed, all of the assignor's property, being personal, was delivered into the possession of the assignee. Held, that the deed of assignment was not void on account of an insufficient description of the property assigned.

COUNSEL

John C. Avery and John Eagan, for plaintiff in error.

Blount & Blount, for defendants in error.

OPINION

MABRY C.J.

There is involved in this case the validity of an assignment for the benefit of creditors made under the original act of 1889 (chapter 3891, Laws Fla.). In December, 1891, Schmidt & Zeigler commenced suit against R. M. Avery, and had garnishment process served on C. H. Dorr, with the view of reaching money or property in his hands belonging to Avery. Judgment was entered in favor of Schmidt & Zeigler against Avery for $574.97, and the garnishee, Dorr, answered that he did not owe Avery anything, nor did he have possession of any money or other property of any kind belonging to him. The answer further alleged that on the 5th day of September, 1891, R. M. Avery made to him (Dorr) a general assignment in writing of all the former's property, real, personal, and mixed, except such as was exempt by law from forced sale, for the benefit of his creditors, under and in strict compliance with chapter 3891, Laws of 1889 of this state; that, on said date, garnishee, as assignee under said assignment, executed and filed bond as required by law, and the assignor filed the oath required, to the effect that he had assigned and turned over all his property of every kind not exempt from forced sale, and also, on the same day, delivered possession of his said property to said assignee, who took possession and control of the assigned property, and caused an inventory thereof to be made, together with a full statement of assignor's liabilities, and which inventory and statement were filed, as a part of the proceedings of the assignment, in the clerk's office of Escambia county, on the 11th day of September, 1891; that since the date of the assignment the garnishee, as assignee under said assignment, had sold said assigned property for money to the best advantage of all concerned, and he then held the same for the benefit of Avery's creditors, except the sum of $749.15, already paid to them upon their demands for pro rata amounts; and that about the sum of $1,028 was in his hands for the benefit of all creditors who had not received their pro rata amounts. Issue was joined upon this answer, and being tried by the court without a jury, by consent, judgment was rendered in favor of plaintiffs against the garnishee. The latter sued out the writ of error.

The written assignment introduced in evidence reads as follows, viz.: 'Know all men by these presents, that I, R. M. Avery, do hereby assign and set over, grant, bargain, and sell unto C. H. Dorr, for the uses and purposes hereinafter expressed, all of my property, real, personal, and mixed, except such as is exempt by law from forced sale, to have and to hold the above-described property unto the said C. H. Dorr and his successors and assigns forever. The property so assigned is of the estimated value of seven thousand ($7,000) dollars. This conveyance is made to the said C. H. Dorr in trust to take and hold the said property other than such as is exempt by law from levy and forced sale, and dispose thereof so as to realize the greatest amount of money thereout possible, and to the best interest of all concerned, and pay to my creditors the amounts I owe them, in equal proportion, according to their several demands, and to do and perform all other acts and things as may be requisite and necessary in the lawful discharge of his duties as assignee under the provisions of 'An act regulating assignments for the benefit of creditors,' approved May 31st, 1889. In witness whereof,' etc. The written assignment, the oath of the assignor, and the bond of the assignee were filed for record on the 5th of September, 1891, the date of the execution of the assignment. No question is raised as to the sufficiency of the affidavit and bond, and they need not be recited.

On the 11th of September following the date of the assignment, the assignee made out, and filed with the clerk of the circuit court, an inventory of the property delivered to him under the assignment, and a statement of the claims due to and from the assignor. From the garnishee, who was the only witness examined in the case, it appears that the property assigned was all personal, consisting principally of a stock of groceries and book accounts; that garnishee, as assignee named in the assignment, took possession of the property assigned to him on the date of the assignment, the same having been pointed out to him by the assignor. Possession of all the property then pointed out was taken, and witness says he thinks it was all Avery had, as he could learn of no other property belonging to him. The stock and book accounts were sold for cash at private sale by the assignee at 50 per cent. of cost value; and out of the proceeds the assignor, R. M. Avery, was paid $1,000, as his exemptions, he being the head of a family residing in this state, and claiming it. In testifying as to this payment, the garnishee says: 'I think it was better for all concerned to have paid his exemptions in this way, than to have had him select it out of the stock; for, if he had selected $1,000 worth out of the grocery stock, the balance could not have been disposed of to as good advantage. It was my understanding, at the time I took possession of the property under the assignment, that R. M. Avery intended to claim his exemptions, to the extent of $1,000, out of the stock property.'

Some of the questions presented in this case have been passed upon in former decisions of this court, and reference will first be made to them. For plaintiff in error it is contended that a proceeding by garnishment is not the proper way to test the validity of an assignment for the benefit of creditors; but we have held that it is, and that if, upon the trial of the issue in such a proceeding, the assignment is found to be fraudulent, ineffectual, or void, the garnishing creditor should recover against the assignee garnished the amount found in his hands under the void assignment at the time of the service of the garnishment process, to the extent of the creditor's claim. Williams v. Crocker, 36 Fla. 61, 18 So. 52. Of course, if the assignment be valid, and the assignee's title undisputed, he holds by title paramount to that of the assignor, and the purpose fo the assignment cannot be defeated by garnishment proceedings instituted by a creditor of the assignor.

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