Excelsior Manufacturing Co. v. Owens

• Decision Date: 10 March 1894
• Citation: 25 S.W. 868,58 Ark. 556
• Parties: EXCELSIOR MANUFACTURING Co. v. OWENS
• Court: Arkansas Supreme Court

25 S.W. 868

58 Ark. 556

EXCELSIOR MANUFACTURING Co. v. OWENS

Supreme Court of Arkansas

March 10, 1894

Appeal from Sebastian Circuit Court, Greenwood District, EDGAR E BRYANT, Judge.

STATEMENT BY THE COURT.

Appellant sued W. H. Owens on notes due and not due, aggregating $ 1,385.96, and attached a stock of hardware as his property. Appellee Kendall filed an interplea, claiming this property under an assignment from Owens. Upon this issue was joined. The cause was submitted to a jury upon evidence substantially as follows:

Appellee introduced the assignment; proved its execution, the taking inventory, making bond, possession; and rested. Appellants proved the insolvency of appellee that, when he began business, January, 1890, he borrowed one thousand dollars from his sister-in-law, and gave her a note due January 1891. He had paid only the interest for one year, was to pay interest and keep principal as long as he desired. She was preferred in the assignment. Appellee was correspondent for Dun's agency; in June, 1891, made statement of his financial condition, in which he largely overestimated assets, and underestimated liabilities. About three weeks before assigning, he received from appellant a car-load of stoves, which were not paid for, were nearly all on hand at the time of the assignment, and were included in it. About this time he represented to an attorney, having claims against him for collection, that his liabilities were some two thousand five hundred dollars less than they really were. All his property was transferred by the assignment, except such as was named therein as exempt. Reports made to Dun's agency were used by wholesale merchants as a basis of credit. One of the attaching creditors, whose suit on attachment was by agreement to abide the decision on this interplea, had sold him goods on the rating which Dun's agency gave him, which was between two and four thousand dollars. Some time after the assignment, one of the preferred creditors received the note given his sister-in-law in a letter from Owens. The verdict was for appellee; motion to set it aside overruled; judgment rendered, and this appeal perfected, asking its reversal for the following alleged errors:

First. In allowing the assignment to be read in evidence without acknowledgment or registration, when it purported to convey real estate.

Second. In instructing the jury that the assignment was valid on its face.

Third. In instructions, two, three, four, five, six, seven, ten each, as modified.

Fourth. In refusing instructions one, two, three, four, each, asked by plaintiff.

Fifth. In allowing interpleader the opening and closing argument to the jury.

Sixth. In verbally explaining the written instructions after argument of the case.

Judgment affirmed.

Sandels and Hill for appellant. F. P. Winchester of counsel.

1. Plaintiff was entitled to open and conclude the argument. Mansf. Dig. sec. 5131, 2871; 20 S.W. 1083; 41 N.W. 254; 43 Id. 108; Bump. Fr. Conv. p. 365: 29 Ark. 151.

2. It was error to admit the assignment to be introduced in evidence. It was not attested by witnesses nor acknowledged. Mansf. Dig. sec. 657; Devlin on Deeds, secs. 66, 465.

3. The assignment is not good on its face. 54 Ark. 471; 53 id. 88; Mansf. Dig. sec. 305.

4. The court erred in orally explaining its instructions. Const art. 7, sec. 23; Mansf. Dig. sec. 5131, subd. 5; 51 Ark. 185; 47 Id. 407; 18 S.W. 121; Thomps. Trials, sec. 2377.

5. There is error in instructions 11 and 12, and in refusing 1 and 3 on the question of the Eliza Turpin preference. 8 Ark. 109; 11 id. 249; 2 Herm. Estop. p. 873; Ib. p. 893; Bump, Fr. Conv. p. 182; 63 Hun, (N. Y.) 267. It was a fraud on the rights of creditors to prefor Miss Turpin. Bump, Fr. Conv. pp. 383-4.

6. The refusal to give instruction 4 asked by appellants was palpable error. 47 Ark. 394; Thompson, Trials, sec. 2317. Speer received the note from Owens after the assignment. It was then nearly a year past due. Owens' possession of it meant, prima facie, that it had been paid. If paid before the assignment, then it was a preference of a fictitious debt, and avoided the assignment, 40 N.Y. 383; 20 S.W. 719.

7. It was error to refuse instruction No. 2 asked by appellant. The false statements by Owens of his financial condition, made knowingly as a basis of credit, whereby he was enabled to buy goods, a material part of which was among the assigned assets, were fraudulent, as to the creditors misled. 47 Ark. 253; 52 id. 30; 51 Iowa 663; 13 S.E. 509; 30 Mo.App. 2; 11 So. Rep. 186; 4 Denio, (N.Y.) 217.

Humphy & Warner for appellee.

1. The onus was on the interpleader, and he had the opening and closing. Mansf. Dig. secs. 356-358; 11 Iowa 516; 7 Pick. 99; 8 Blackf. 194; 35 Ind. 31; 25 N.H. 478; 5 Ark. 141; 32 id. 470; Thomps. Trials, secs. 228-9.

2. Deeds of assignment are not required to be acknowledged. Mansf. Dig. ch. 8; 25 Ark. 562; 38 id. 181; 40 id. 237; 16 id. 543.

3. The court did not orally explain its instructions. It began to do so, but, upon objection, desisted.

4. There is no error in the instructions complained of. 11 Ark. Prater v. Frazier; 2 Herm. Est. p. 893; Bump, Fr. Conv., p. 384; 52 id. 125; 50 id. 382; .20 Ill. 485; 52 Ill. 420; 2 Ark. 143; 24 Barb. 120; 27 Tex. 438; 6 B. Mon. 256; 88 Pa.St. 173; 9 N.W. 550; 51 N.Y. 174.

OPINION

WOOD, J., (after stating the facts.)

1. The deed of assignment was properly admitted in evidence. Appellant is not claiming by priority of attachment over the assignment, and the question of notice has no place in the case. Assignments are not required to be recorded as a prerequisite to their admissibility in evidence. The only purpose to be effected by their registration in any case would be to give notice. Besides, the property involved in this controversy is a stock of hardware as appears from the judgment.

2. The court told the jury "the assignment was good on its face. "

The deed contains the following clause, which appellant contends invalidates it, to-wit: "That he, the said grantee, shall make an inventory of said property and give bond in the manner provided by the laws of Arkansas governing in cases of assignment for the benefit of creditors, and, after first having given bond, he shall take possession of said property and dispose of the same in the time and manner provided by law." No ingenious transposition of words or artifices of construction should be indulged in by courts in order to give meaning to words in an instrument which in themselves are unambiguous. Such is the clause above, when the words are read in the order in which they are placed in the sentence, and are given their logical, or even grammatical, construction. The case of Lincoln v. Field, 54 Ark. 471, 16 S.W. 288, is not at all analogous. There the direction to the assignee was to '"forthwith" take possession, and nothing was contained in the deed to indicate that the taking possession was not the first thing to be done, as plainly implied by the word "forthwith." The language of the above clause as unequivocally expresses (taking the words in the connection used) that the taking an inventory was the first thing to be done, under the direction of this assignment; then the making of the bond, and after that the taking possession. The words in the deed of assignment follow the order prescribed by the statute, in expressing the respective duties to be performed by the assignee before possession is taken. The taking of the inventory properly precedes the making of the bond, because it furnishes the estimate for the amount of the bond. The court did right in pronouncing this assignment good on its face.

3. The third and fourth grounds relate to alleged errors in modifying, giving and refusing instructions.

After telling the jury the assignment was good on its face, the court proceeded in a lengthy charge to declare the law applicable to the facts in evidence, as to what might be considered, and what was really necessary, in order to avoid such an assignment. We epitomize it as follows: (1.) Material part (meaning a portion that is not insignificant) must not be withheld. (2.) Right to prefer one just debt over another. (3.) The fraud that will vitiate an assignment must be in the assignment itself. (4.) Conduct of assignor in making purchases, false representations, etc., are all matters proper to be considered in determining what the real intent was in making the assignment, the real question being, was the assignment itself executed with the fraudulent purpose to cheat, hinder, or delay any creditor? If so, void; if not, good, notwithstanding prior or subsequent dishonest conduct. (5.) A debtor has the right to prefer his attorneys for drafting the assignment. (6.) The preference of a sham or pretended debt is a fraud which vitiates the assignment. (7.) A gift is not a debt; to advance a party money to be repaid, even at the pleasure of the debtor, is not a gift.

The first and third instructions asked by appellant related to the alleged debt of assignor to his sister-in-law, which appellant claimed was a simulated debt, or gift; or, if a real debt, that same had been paid. It was not error to refuse these, as the court had already sufficiently charged upon that point.

In instruction numbered two, refused, the appellant asked the court to charge "that, if defendant Owens made false representations to Dun's Agency, and goods were sold him upon the faith of such representations, and the goods so sold were among the assigned assets, and the assignment directed the proceeds of the sale of assigned assets to other creditors than the ones misled, this would be a fraud which would vitate the assignment."

This was an action of debt, with the provisional remedy for its...