Penzel Company v. Jett

• Decision Date: 25 April 1891
• Citation: 16 S.W. 120,54 Ark. 428
• Parties: PENZEL COMPANY v. JETT
• Court: Arkansas Supreme Court

16 S.W. 120

54 Ark. 428

PENZEL COMPANY v. JETT

Supreme Court of Arkansas

April 25, 1891

APPEAL from Hempstead Circuit Court, CHARLES E. MITCHEL, Judge.

A deed of trust in the nature of a mortgage was executed by W. A Jett, an insolvent merchant, for the benefit of certain of his creditors. Suit in attachment was brought to test its validity. Plaintiff has appealed from a judgment sustaining the conveyance and dismissing the attachment. The case depends upon the construction to be given to the instrument on its face, plaintiffs contending that it was in effect an assignment for the benefit of creditors, and void because not executed in compliance with the statute regulating assignments.

The instrument, after the habendum clause, which is similar to that in the deed construed in Robson v. Tomlinson, ante, p 229, continues: "Now, if I shall well and truly pay said sums as they fall due, then this obligation is to be void otherwise to remain in full force and effect. The said trustee is hereby authorized to take possession of said property immediately upon the execution of this conveyance and proceed to sell the same in due course of trade at private sale for cash for the space of ninety days, and shall apply the proceeds to the payment of said debts, preferring them in the order in which they appear herein. If, at the expiration of ninety days, the said debts, or any part thereof, remain unpaid, the said trustee is hereby instructed to sell the remainder of said goods that may remain on hand at public auction, in bulk or by the piece as may be most advantageous, for cash, after giving ten days' notice of the time, place and terms of sale, by advertisement in some newspaper published in said county. Said trustee is hereby authorized to collect all indebtedness in such manner as in his judgment may seem best, and may sue in my name for the benefit of my said creditors for any claim or indebtedness hereinbefore mentioned. And it is further provided, that if said goods should sell for more than enough to pay said indebtedness and the expense of this trust, that he pay the further sum to the following creditors, preferring them in the order in which they appear, to wit: [Naming them.] And it is hereby further provided, that the expense of this trust be first paid, and that said trustee is hereby instructed to hold a sufficient sum to pay the expenses of the execution and carrying out of this conveyance, and that, after retaining a sum sufficient for said purpose, he immediately pay off said debts, upon the receipt of sufficient funds, in the order in which they appear."

Judgment reversed and cause remanded.

J. M Moore for appellant.

The instrument is an assignment to pay debts, and not a mortgage to secure them. The conveyance was not to a creditor, but to a stranger, and provided for immediate possession and sale, and the application of the proceeds to the preferred debts. The clause of defeasance does not change its character or effect. The rule of construction applicable is stated in 31 Ark. 439; 52 id., 30; 13 S.W. 423.

J. D. Conway, D. W. Jones and Thomas B. Martin for appellee.

The deed is on its face a mortgage, with a reservation of the right to pay off the debts, and thus procure reinvestment of title in the grantor, and there is no evidence to show an intention different from that expressed by it. It was a mortgage. 31 Ark. 437; 52 id., 30; 53 Ark. 101; 16 Ohio 216; 5 id., 130; 21...