Gilkerson-Sloss Commission Co. v. London

• Decision Date: 22 March 1890
• Parties: GILKERSON-SLOSS COMMISSION CO. v. LONDON
• Court: Arkansas Supreme Court

13 S.W. 513

53 Ark. 88

GILKERSON-SLOSS COMMISSION CO. v. LONDON

Supreme Court of Arkansas

March 22, 1890

APPEAL from Crawford Circuit Court, JOHN S. LITTLE, Judge.

Reversed.

O. P Brown, L. P. Sandels and U. M. & G. B. Rose for appellant.

I. The assignment is a partial one, and contains preferences and is void. 4 Ark. 303.

2. Before the assignee shall be entitled to take possession sell, manage or control the property assigned, he shall make and file his bond and inventory. Where the assignors, either in the assignment, or by contemporaneous agreement, delivered possession of the assigned property to the assignee, it vitiates the deed. 37 Ark. 64; 39 Ark. 68; 24 F. 460; 24 F 465; Burrill on Assignments, sec. 501.

Delivery of the keys was delivery of possession in this case. 24 F. 465.

B. H. Tabor for appellees.

I. The key was delivered simply that the assignee might gain access to the store for the purpose of making inventory. The understanding was clear that the assignors should retain possession and control the stock until inventory and bond were made and filed.

2. A partial assignment containing preferences is not void. 4 Ark. 304; 11 Wend. (N. Y.), 181; 52 Ark. 30; Burrill on Assignments (5th ed.), 215, sec. 157; 12 B. Mon. 208; 13 S. & M. (Miss.), 22; 51 Ala. 590; 1 N.M. 34; 2 R.I. 335; 37 Mo. 500; 103 Ind. 166; 30 Ala. 195; 26 Ala. 642; 31 Mo. 107; Burrill, Assignments, p. 218, secs. 160, 164 and notes.

OPINION

BATTLE, J.

London Bros., a firm composed of Jesse and John London, were engaged in the mercantile business at Alma and Rudy in Crawford county, in this State. On the 24th of November, 1887, they assigned to S.W. Frye all their notes, accounts and other evidences of indebtedness, and all their goods, wares, merchandise and fixtures of every kind, at Alma and Rudy, for the benefit of their creditors. Thereupon Gilkerson-Sloss Commission Company commenced an action against the assignors and sued out an order of attachment and caused the sheriff to execute the same by levying on the property assigned. The ground of the attachment was, the defendants had fraudulently disposed of their property, the fraud relied on being the making of the assignment. They made no defense to the action but controverted the ground of the attachment. Frye filed a complaint and claimed the property attached, under the assignment. The attachment was discharged, and the claim of Frye was sustained and plaintiff appealed.

The deed of assignment was valid on its face. It did not authorize the assignee to take possession before the filing of an inventory and the execution and approval of his bond as required by law. But evidence was adduced on the trial tending to prove that the assignors, contemporaneously with the execution of the deed, agreed to deliver to the assignee the keys to the store-houses containing the property assigned, for the purpose of enabling him to make his inventory; that, pursuant to this agreement, the deed of assignment and one of the keys to the Alma store were delivered to the assignee at the same time, and, within a very short time thereafter, the only key to the Rudy store; that Jesse London retained the only other key to the Alma store; and that he admitted that he did not go near the store or exercise any control over the property after the delivery of the deed. Upon this evidence the appellant asked an instruction in the following words: "The court instructs the jury that under the law the assignee is entitled to access to the property assigned for the purpose of making an inventory and bond; but he is not entitled to possession until he has filed his inventory and bond in the clerk's office. If upon the face of a deed of assignment the assignor directs or authorizes the assignee to take possession of the property assigned before he has filed his inventory and bond, this renders the deed fraudulent and void as to creditors. And if the assignee or his agent, before the filing of the bond and inventory, by direction or with the consent of the assignor, in consummation of an agreement, oral or written, extraneous to the deed, takes the keys of the storehouse and thus has possession of the property assigned, it renders the deed fraudulent and void as to creditors, just as though such agreement was set forth in the face of the deed." And the court refused to give it, but gave the following: "The court instructs you that, under the law, the assignee is entitled to access to the property assigned for the purpose of making an inventory and bond; but he is not entitled to possession until he has filed his inventory and bond in the clerk's office. If, upon the face of the deed of assignment, the assignor directs or authorizes the assignee to take possession of the property assigned before he has filed his inventory and bond, this would render the deed fraudulent and void as to creditors. And if the assignors, or their agents, by their directions or with their consent, in consummation of an agreement, oral or written, extraneous to the deed and made at or before the execution of the deed, agreed to put the assignee in possession of the property assigned before the making and filing of the inventory and bond, as provided by law, and such assignee was put in possession of the property before the filing of the bond, this would render the deed fraudulent and void as to creditors. And if you find from the evidence that a key or keys to the store house or houses were delivered to the assignee at the time of the delivery of the deed or afterwards, in consummation of a contemporaneous agreement, together with the possession of the property, this would render the deed fraudulent and void. But, if the key or keys were delivered to the assignee for the purpose only of giving access to the goods to enable him to make an inventory, the assignors retaining to themselves the possession and control of the assigned property, this would not render the deed void. By 'access,' as used in the instruction, is meant 'liberty to approach and inspect the property.' By 'possession' is meant, 'that...