Shapleigh v. Baird

• Decision Date: 31 January 1858
• Court: Missouri Supreme Court
• Parties: SHAPLEIGH & RUE, Respondents, v. BAIRD, GARNISHEE, Appellant.

26 Mo. 322

SHAPLEIGH & RUE, Respondents,

v.BAIRD, GARNISHEE, Appellant.

Supreme Court of Missouri.

January Term, 1858.

1. Section 39 of the act concerning voluntary assignments (R. C. 1855, p. 210) does not invalidate partial assignments for the benefit of a portion of the creditors of the assignor.

2. Partial assignments still being valid notwithstanding said section, it operates to overthrow all provisions in such assignments which give preferences among the designated creditors.

Appeal from Cooper Circuit Court.

At the March term, 1857, of the Cooper circuit court, a judgment was rendered in favor of Marshall Shapleigh and Francis J. Rue, against Henry G. Brent. An execution was issued and William E. Baird was summoned as garnishee. The usual interrogatories were filed. The garnishee answered denying that he had any property, money, &c., of Brent's. To this answer the plaintiffs, Shapleigh and Rue, filed a denial, alleging substantially that Baird was then in possession of a large amount of money as trustee under a certain deed of assignment made by said Brent, in which assignment provision is made for the payment pro rata of certain debts due and owing by said Brent to certain of his creditors, but in which deed no provision is made for the payment of the debt due from Brent to said Shapleigh and Rue or any portion thereof. Baird, garnishee, replied admitting that he held property under the deed of assignment as stated, but claimed that said deed of assignment was legal and valid.

An agreed case was made embodying the above facts. The cause was submitted to the court without a jury. The court, at the instance of the plaintiffs in the execution, declared the law to be as follows: “1. If the deed of assignment made by H. G. Brent, on the ____ day of ____, 1857, to William E. Baird as trustee, referred to in the pleadings and set forth in the agreed facts, did in its provisions prefer the payment of certain debts then due certain persons by said Brent, in exclusion of the indebtedness due to plaintiffs (Shapleigh and Rue), and for which judgment was rendered against said Brent at the March term of this court, 1857, then the said assignment made by said Brent is void as to the said plaintiffs, and judgment will be rendered in their favor against the garnishee. 2. If the court find from the evidence and the facts agreed by the parties, that, at the time of making the assignment set forth in the agreed facts, H. G. Brent was justly and legally indebted to Shapleigh and Rue (the plaintiffs in the execution) in the sum of $____, and that no provision was made in said assignment for the payment of said indebtedness or any portion thereof, then, although said assignment may have provided for the payment of the bona fide debts of said Brent, yet the same is void as to the plaintiffs, and the assets of said assignment in the garnishee's hands are subject to this garnishment, and the court must find for the plaintiffs in the execution.”

Judgment was rendered in favor of the plaintiffs in the execution.

Adams, for appellant.

I. The question raised by this record is whether a debtor can, under the laws of this state, make an assignment for the benefit of a portion of his creditors. It is not whether an assignment, made for the benefit of some, would enure to the benefit of all the creditors, but whether an assignment thus made is absolutely void as to the creditors not named therein. The 39th section of the assignment act (R. C. 1855, p. 210) does not make such assignments void. It is the provision or clause of the assignment providing for the payment of one debt in preference to another that is declared void. The assignment, notwithstanding such void clause, is to stand, and all the creditors named or embraced within the assignment are to be paid pro rata out of the assets. This is the plain meaning of the section. The legislature did not intend to abridge the right of debtors to make assignments. They still have the right, in the language of the statute, to assign their property, or any part thereof, for the benefit of their creditors or any of them. (See Assignment Act, R. C. 1855, p. 202, § 1.) Previous to the revision of 1855 assignments for the benefit of a portion of the creditors of the assignor have always been recognized as valid. (Gates v. Labeaume, 19 Mo. 238.) The first section clearly recognizes the right of a debtor to make an assignment for the benefit of a part of his creditors. Section 39 does not take away their right. The object of this section was to prevent the classification of the creditors embraced within the assignment, and to compel debtors to place the creditors named or included within the assignment on the same footing. If he will make an assignment for the benefit of a part of the creditors, he can not make preferences amongst them, but all the creditors “within the provisions of the assignment shall be paid pro rata from the assets thereof.” Even if the debtor should, in violation of the 39th section, classify the debts embraced within the assignment, it would not render the assignment itself void. The assignment would still stand, but the provision classifying the debts would be void, and the whole assets would be paid pro rata to the creditors embraced within the assignment. The judgment of the circuit court can stand...