Lookout Bank v. Noe

• Decision Date: 04 October 1887
• Citation: 5 S.W. 433,86 Tenn. 21
• Parties: LOOKOUT BANK and others v. NOE and others.
• Court: Tennessee Supreme Court

5 S.W. 433

86 Tenn. 21

LOOKOUT BANK and others v. NOE and others.

Supreme Court of Tennessee.

October 4, 1887

Appeal from chancery court, Grainger county; JOHN P. SMITH Chancellor.

J. T. & J. K. Shields, for complainants. McFarland & Dickson, Hood Cooper & Frame, Rogers & Essary, and J. N. Goldman, for respondents.

CALDWELL J.

This attachment bill was filed by some of the creditors of S. B Noe & Co., impeaching, for fraud in law and fraud in fact, a certain deed of assignment executed by them on the twenty-fifth of May, 1885, and seeking to subject the property therein named to the payment of debts against said firm. The chancellor heard the cause finally upon voluminous pleadings and proof, and adjudged the assignment to be "fraudulent in law, and null and void," and granted the other relief sought in the bill. S. B. Noe &amp Co., their assignee, and numerous creditors, who claim benefits under the assignment, have appealed, and seek a reversal of that decree.

The first contention before this court on behalf of appellants, briefly stated, is that the chancellor erred in holding the assignment void for want of compliance with the general assignment law, as embodied in chapter 121, Acts 1881; the assignment being, in fact, partial, as now insisted, and not general, and for that reason not subject to the requirements of that act. The instrument in question does not in terms declare itself to be a general assignment; but that it was so intended by the makers is very clear from its language, and the manner of its execution. It purports to assign and transfer to John Essary, Esq., as trustee or assignee, "a stock of goods, merchandise, hardware, cutlery, shoes and boots, and various articles of produce and merchandise, more particularly described and set out in an inventory herewith filed as part of this assignment, and marked 'Exhibit No. 1,' * * * together with the debts, notes, accounts, and other claims due said firm, more particularly set out and described in an inventory made part of this assignment, and marked 'Exhibit No. 2."' Then follows a statement that the goods, etc., are at the place of business of the assignors, which is given, and that their debts, etc., grew out of that business. All their creditors--those named, and those not named, if any--are expressly secured, and by the terms of the instrument are to receive payment pro rata. The inventories referred to in the assignment are made out in the minutest manner, reciting in their caption that they are parts of the principal paper, and marked as therein stated. These three papers are severally signed and acknowledged by each member of the firm, and filed for registration, and registered, all on the same day, viz., May 25, 1885. On the next day one member of the firm swore, or attempted to swear, to each of the inventories.

Thus it appears unmistakably, from the face of these three papers, (which are to be taken as one instrument,) that the assignors were attempting to make a general assignment, as contemplated by the act of 1881, c. 121, the fourth section of which requires that a sworn inventory of the debtor's property be annexed to every general assignment. That this assignment was in the minds of the assignors becomes the more manifest when it is remembered that such a thing as a sworn inventory, in connection with an assignment for the benefit of creditors, was unknown to the law, and to the practice in this state, prior to the passage of that act. Besides this conclusion, drawn from the face of the instrument itself, all parties have committed themselves by their pleadings to the theory that it was by the assignors intended to be a general assignment. Complainants, in their bill, call it "a paper purporting to be a general assignment," and attack it because not executed in good faith, and for other reasons. The assignors, answering, insist that said assignment was made bona fide, for the purpose of securing to their creditors, all alike, the benefit of all their assets. A large number of the creditors adopt this answer as their own; and several others, answering for themselves, say they have been informed that S. B. Noe & Co. have made "a general assignment, as stated in the bill,"-- all insisting that it is in substantial, if not in exact, compliance with the provisions of the general assignment act. It is true, as now contended for him, that the assignee does not, in his answer, any where call the instrument a general assignment, and that he refers to it simply as an assignment; but it is equally true that he regarded it as a general assignment, for in his answer he claimed that all the property of the assignors, whether named in the assignment or not, "passed to this respondent, under the provisions of chapter 121 of the Acts of 1881," etc. Then it is perfectly manifest from admissions in the pleadings, and from the face of the instrument itself, that it was intended as a general assignment, made in an attempt to comply with the act of 1881, by which its validity must be tested.

The bill contains no allegation against the form of the assignment itself but it attacks the verification of the inventories upon several grounds. The fourth section of the act provides "that the debtor making a general assignment shall annex thereto a full and complete inventory or schedule, under...