Richmond v. Mississippi Mills

• Decision Date: 22 June 1889
• Parties: RICHMOND <I>v.</I> MISSISSIPPI MILLS, (two cases.)
• Court: Arkansas Supreme Court

11 S.W. 960

RICHMONDv.

MISSISSIPPI MILLS, (two cases.)

Supreme Court of Arkansas.

June 22, 1889.

Appeals from circuit court, Nevada county. C. E. MITCHELL, Judge.

Smoote & McRae, for appellant. Atkinson & Tompkins, for appellee. U. M. & G. B. Rose and M. M. Cohn, amici curiæ.

SANDELS, J.

These two actions were brought by appellee, — the one an action at law with attachment; the other, replevin. The first was for debt for goods purchased, in the spring of 1886, by Richmond, a merchant; the second was to recover goods sold him on September 13, 1886. In both actions, George Taylor & Co. and other creditors of Richmond interpleaded, claiming the goods seized. In the first, the defendant controverted the grounds of attachment stated by plaintiff, and in the second he gave bond to retain the property. The evidence for plaintiff showed that it had sold goods to Richmond, for which he was indebted to them, and that in the summer of 1886 its agent and salesman called on Richmond to see about the debt, to inform him that rumors affecting his solvency were current, and to inquire as to his true condition. He was assured that the debt would be paid at maturity, and that Richmond's condition was this: He owed $10,000, and had assets amounting to $30,000. This statement was twice, after that time, repeated to said agent; the last time being on September 13, 1886, when the last bill of goods was sold. That on October 9, 1886, Richmond failed. On that day he executed the following instruments: (1) A mortgage on his entire stock of goods and store furniture, to George Taylor & Co. and 12 other creditors named; (2) an assignment "in pledge" of all notes, accounts, and choses in action to the same parties, as further security for the same debts; (3) a deed of trust, in the nature of a mortgage upon other personal property and some land, to C. C. Henderson, for the benefit of said same creditors; (4) a mortgage to J. E. Mallory on personal property to secure $850 due him; (5) a mortgage to Barthold & Jennings to secure $2,000 due them. These instruments covered the entire property of Richmond. The first named was executed and filed for record at 11 o'clock P. M., October 9, 1886. Possession was immediately given to Taylor for himself and other beneficiaries, and he, on the same night, delivered possession of all the goods and chattels to Wylie Hatley, who had been suggested and recommended to him before that by Richmond. Hatley, from that time, acted under directions and supervision of George Taylor, sold goods at private sale, and on the orders of Taylor paid money to himself and others of the mortgagees, and for expenses. The debts secured appear to have been past due. On the day of the execution of these several instruments Richmond drew orders on George Taylor & Co. in favor of each of his creditors not named in the mortgages, for the amounts due them respectively, a copy of which is hereinafter given. These orders were mailed to various unsecured creditors, with letters from Richmond explanatory of the situation. There was realized from the sale of goods and property and collections the sum of $10,016.94. Berthold & Jennings' debt was about paid from sale of property; Mallory's remained unsatisfied at the time of trial.

The mortgage first mentioned, and covering the stock of goods, is as follows: "Know all men by these presents that I, N. T. Richmond, for and in consideration of the sum of one dollar to me in hand paid, and the premises hereinafter set forth, do hereby sell, transfer, and deliver to Geo. Taylor, doing business under the firm name of Geo. Taylor & Co., J. V. Collins, Mrs. Jane Shanks, Mandeville, Bowling, & Taylor, Terry & Young, J. H. Wear, Boogher & Co., Baird & Bright, Sam Scott, Gauss Boot & Shoe Co., Charles Wingfield, Geo. Yroyer, J. R. Harrell, and A. E. Stainton the following described property: All of my stock of general merchandise now in the store-house occupied by me as a place of business in the town of Prescott, Nevada county, Arkansas, together with the store fixtures and furniture therein, — to have and to hold to the said grantees, their heirs and assigns; yet this conveyance is upon condition that whereas, I am indebted to said Geo. Taylor & Co. in the sum of five thousand nine hundred and seventy-one dollars, (and to the other twelve in various sums, which are specifically mentioned in the instrument:) now, if I shall well and truly pay said sums as they fall due, this obligation to be void, otherwise to remain in full force. The said grantees are hereby authorized to take possession of said property immediately upon the execution of this conveyance, and to 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. If at the expiration of said period of ninety days said debts, or any part thereof, remain unpaid, the said grantees are to sell the remainder of said goods which may then be on hand at public auction, in bulk or by the piece, as may be most advantageous, for cash, after ten days' notice of the time and terms of the sale, by advertisement in some newspaper published in the county; and the proceeds shall be applied, 1st, to the expenses attending the execution and carrying out of this conveyance; and the balance to the payment of said debts secured hereby. Witness my hand this the 9th day of October, 1886. N. T. RICHMOND." It was acknowledged and filed for record at 11 o'clock P. M. on that date.

The circular letter of Richmond to his unsecured creditors was as follows: "Prescott, Ark., Oct. 11, 1886. Mississippi Mills, Wesson, Miss. — Dear Sirs: On the 9th inst. I executed to Geo. Taylor & Co., of St. Louis, and others, a mortgage and deed in trust upon my entire property, to be sold at private sale, and closed out in ninety days. Everything now in hands of mortgagees, W. A. Hatley, Esq., manager. Assets, about $30,000; liabilities, about $15,000, — good and ample to pay all, and leave balance for me. Inclosed order on G. T. & Co. to pay you amount due you before returning assets to myself. I regret the necessity, but it protects all from complications. Yours, truly, N. T. RICHMOND." The order on Geo. Taylor & Co. inclosed in the letter was in the following words: "$385.37. Prescott, Ark., 10-9-1886. Out of the proceeds of the property this day mortgaged to you, after the indebtedness which said mortgages are given to secure directly are satisfied, you will please pay to Mississippi Mills three hundred and eighty-five and 37-100 dollars, or, should such surplus proceeds fail to pay in full the sum total for which I have this day made sundry similar orders, you will place on each order the pro rata share in such surplus. N. T. RICHMOND. To Geo. Taylor & Co., St. Louis, Mo." Richmond was employed by Taylor to assist Hatley.

Of the $10,000 notes and accounts, $2,000 was collected by Taylor and his agents. The balance were sold, and Taylor bought them for $100. He turned them over to Richmond for collection, and allowed Richmond to use the proceeds of collections.

Upon this state of facts the circuit court held in the first case that the various conveyances constituted an assignment for the benefit of creditors, and that the same was fraudulent and void, as being in violation of the statutes in that behalf; and in the second case the court found, in addition to the matter above, that at the time Richmond bought the goods in question, on September 13, 1886, he...