Johnson v. Robinson

• Decision Date: 31 May 1887
• Citation: 4 S.W. 625
• Parties: JOHNSON v. ROBINSON and others.
• Court: Texas Supreme Court

Page 625

4 S.W. 625

JOHNSON v. ROBINSON and others.

Supreme Court of Texas.

May 31, 1887.

Appeal from Cooke county.

Roberts & Eidleman, Barrett & Daugherty, and Stuart & Bailey, for appellants. Davis & Garnett, for appellee.

GAINES, J.

On the thirteenth day of March, 1884, E. N. Stone & Co., by E. N. Stone, a member of the firm, executed to J. M. Robinson & Co. an instrument conveying to them a stock of goods, and authorizing them to sell the property, and to apply the proceeds, first, to the payment of the expenses of the trust, and then to the discharge of a debt due by the assignors to the trustees, and to distribute the balance, if any, among their other creditors pro rata, if any. Certain creditors of Stone & Co. sued out attachments against their property, and caused them to be levied by appellant, who was sheriff of the county, upon the goods conveyed. Appellees brought this suit against the appellant to recover the value of the property so taken, and annexed a copy of the conveyance to their petition, and made it a part thereof. Appellant demurred to the petition on the ground that the conveyance was void upon its face, and conveyed no right to appellees to the property, as against the creditors of Stone & Co. The demurrer was overruled, and the ruling of the court excepted to, and is now assigned as error. The question of the validity of the instrument under which appellees claim is also raised by an assignment complaining of the judgment of the court, and is the only serious question in the case.

It is contended, on behalf of appellees, that the instrument is a mortgage, and not an assignment, but we think it cannot be so held. A mortgage, being merely intended as a security for debt, gives, under our system at least, merely a lien upon the property, with or without a power of sale, leaves an equity of redemption in the mortgagor, and the surplus, if any, after the payment of the debt, within the reach of creditors by due process of law. An assignment, on the other hand, conveys to the assignee the entire estate of the assignor in the property, to be disposed of by the trustee in such manner as the assignor may have lawfully directed. The mortgagor may vacate the mortgage at any time by a payment of the debt; but by an assignment the property passes beyond the control of the assignor in any event. It is true that, should a surplus remain after paying the debts, a trust would result in favor of the assignor, and the assignee would hold it for his benefit. But this is a result not contemplated by these conveyances. Tested by this distinction, the conveyance under consideration is not a mortgage. If it had provided that, upon the payment of the debt of appellees, it should be void, or had provided that, after a sale of a sufficiency of the property to pay that debt, the balance should be returned to the debtors, the construction claimed by appellees would be correct. But the conveyance contains no condition of defeasance, and passes the property absolutely to appellees to be administered according to the purposes of the trust therein created, first, to pay the debt of appellees, and then to distribute the balance of the net proceeds among the other creditors. This is an absolute transfer of the property to be sold, and the proceeds applied to the payment of debts, and not merely a conditional transfer for the purpose of securing debts, and defeasible upon condition of their payment. It may be that, if nothing had been said as to the disposition of the balance which should remain after paying the debt due appellees, the object of the conveyance being merely to secure a prompt settlement of that obligation, the law would have implied a defeasance, and the instrument would have been treated as a mortgage. Stiles v. Hill, 62 Tex. 429; Waterman v. Silberberg, 2 S. W. Rep. 578. But the surplus is by the instrument placed at the disposal of the trustees in the event there should be no other creditors, and hence we think it must be considered an assignment.

But, treating the instrument as an assignment, the question recurs, is it void upon its face?...