Smead v. Chandler

• Decision Date: 06 June 1903
• Citation: 76 S.W. 1066,71 Ark. 505
• Parties: SMEAD v. CHANDLER
• Court: Arkansas Supreme Court

76 S.W. 1066

71 Ark. 505

SMEAD v. CHANDLER

Supreme Court of Arkansas

June 6, 1903

Appeal from Columbia Circuit Court, CHARLES W. SMITH, Judge.

Judgment affirmed.

Smead & Powell, for appellants.

A contract, good in the state or county of its inception, is so in every other. Bish. Cont. §§ 1370-73; Clark Cont., 502; Lawson, Cont., § 347, Jones, Chat. Mort 299; Cobb, Chat. Mort., § 475; 91 U.S. 406. Such is the doctrine in this state. 6 Ark. 142; 7 Ark. 231; 9 Ark. 233; 14 Ark. 189; 22 Ark. 125; 25 Ark. 261; 28 Ark. 351; 31 Ark 32; 33 Ark. 645; 35 Ark. 52; 36 Ark. 569; 26 Ark. 356; 40 Ark. 423; 44 Ark. 213; 46 Ark. 66; 44 Ark. 230; 60 Ark. 269; 61 Ark. 329; 61 Ark. 6; 114 Mo. 529; 133 Mo. 481; 133 U.S. 134. No instrument can be construed as a general assignment unless the grantor intended to operate as such. 64 Mo.App. 131; 68 Mo. 290; 120 Mo. 317. A conveyance by an insolvent debtor which subjects his property to the payment of an honest debt is not fraudulent as to other creditors. 153 Mo. 350; 138 Mo. 576; 149 Mo. 538; 152 Mo. 606; 140 Mo. 615; 79 Mo.App. 39; 74 Mo.App. 651; 77 Mo.App. 415; 130 Mo. 119; 37 Mo.App. 272. A contract to be unenforcible here must be repugnant to our laws and contrary to common principles of justice and morality. Laws. Cont. § 347; Bish., Con., 1377-83; Jones, Chatt. Mortg. § 299.

J. M. Barker, Gaughan & Sifford, for appellees.

The lien of a garnishment dates from service of the writ. 39 Ark. 97; 40 Ark. 537; Sand. & H. Dig. § 5091. This state will not give effect to the deed of trust as against citizens of our state. 2 Kent, 580; 5 Wall. 307; Story, Confl. L., § 390; 37 N.J.L. 23; 14 Bush, 214; 33 S.W. 11, 484; 22 P. 517; 13 N.J.L. 326; 31 Ib. 90; 45 Mo. 474; 35 Ga. 176; 56 N.E. 773; 58 F. 799; 56 F. 602; 50 F. 561; 57 F. 403; 29 F. 395; 82 F. 471; 94 F. 885; 56 F. 124; 111 F. 415; 70 N.W. 508; 129 U.S. 397; 125 Mass. 374; 112 N.C. 188; 124 Mo. 178; 149 A. 544; N. E. 998; 23 Ark. 525; Story, Confl. L., 327; 6 Mass. 358; 54 N.E. 302; 142 Mass. 53; 50 N.H. 253; 63 N.H. 514; 18 S.E. 765; 43 Neb. 876; 62 N.W. 257; Dicey, Confl. L., 558; 2 Mason, 15; 12 Barb., 302; 42 Miss. 144; 8 Mart., 95; 19 N.J. 462; 5 La. Ann., 269; 13 La. Ann., 117; 14 La. Ann., 52; 1 Tex. 203; 13 Pet. 65; 21 Vt. 189; 42 Mo. 174; 18 La. Ann., 10; 9 Fla. 96; 3 Jones (Eq.), 294; 7 Gill, 378; 4 Ky. 730. Courts of a state will not enforce a contract which violates its positive legislation. 42 Mass. 444; 2 How. 837; 4 A. 365; 21 Fed.; 142 Mass. 53; 62 N.W. 283; 50 Ill. 370; 35 Ga. 176; 7 Gray, 473; 53 Ala. 411; 37 U.S. 247; 45 U.S. 834; 21 S.W. 747.

Smead & Powell, in reply for appellants.

The legislature has power to place limitations upon the disposition of property in its borders, but it will not exercise this function and declare the law arbitrarily. 8 Wall., 168; 10 Wall., 166; 93 U.S. 664; 5 Wall., 307. Domestic and foreign corporations are not in the same attitude. 94 N.Y. 168; 136 N.Y. 347. The deed of trust was not fraudulent. 68 Ga. 96; 12 Md. 54; 76 Am. D., 607; 76 Va. 497; 55 How. Pr., 373; 66 Tex. 372; 17 Pa. 91; 1 Bail. 193; 2 Bail., 163; 24 N.J.L. 162; 2 Wall., Jr., 131; 44 U.S. 483; 43 F. 716; 150 Pa. 413; 82 Ga. 142. The situs of a debt is the domicil of the creditor. Story, Confl. L., 559; Burr., Assn., 471; 68 Ga. 96; 53 Conn. 390; 35 N.Y. 657; 10 Abb. (N. C.), 346; 61 N.Y. 524; 89 N.Y. 508; 23 N.Y. 224; 19 N.J.Eq. 462; 42 F. 716. A conveyance made in another state will be upheld, if it has been executed by a transfer of possession. 13 Cal. 242; 54 N.Y. 29; 81 Wis. 291; 147 U.S. 473; 13 N.J.L. 325; 4 La.Ann. 351; 18 Pa. 185; 7 R. I. 58; 58 F. 672; 28 Conn. 33; 7 Allen, 395; 22 Pick., 245; 71 Am. D., 689.

OPINION

BATTLE, J.

The subject-matter of this litigation is a fund in court. It is claimed by D. W. Chandler & Co. under a writ of garnishment, and by Frank E. Gates, as trustee, under a deed of trust.

The Creel Lumber Company was a corporation organized under the laws of Missouri, and operated a sawmill at Milner, in the county of Columbia, in this state. The J. F. Crawford Lumber Company was also a Missouri corporation, and was principally engaged in selling the output of the mill at Milner, for which it was to receive sixty-five cents per thousand feet.

On the first day of July, 1897, in the state of Missouri, the J. F. Crawford Lumber Company, by a deed of trust, conveyed to Frank Gates, as trustee, all of its property, both real and personal, including an account owed it by the Creel Lumber Company, for the purpose of securing certain creditors named therein. Among these creditors was George P. Gates, of Missouri, to whom it was indebted in a large amount. The deed of trust was delivered to the trustee in the evening of the day of its execution, accepted by him, and by him, on the following day, filed for record in the county of the home office of the company, and by him afterwards filed in the various counties of the state of Missouri, where the real estate of the company was situated. On July 17th, it was filed in the recorder's office of Columbia county, Arkansas.

After the execution and delivery of the deed of trust to Frank E. Gates, as trustee, the said J. F. Crawford Lumber Company, on the 2d day of July, 1897, in the state of Missouri, by deed of assignment, conveyed all of its property to William E. Hill, assignee, for the benefit of its creditors.

A short time prior to the 1st day of July, 1897, the J. F. Crawford Lumber Company placed in the hands of Smead & Powell, attorneys, at Camden, Ark., for collection, the account against the Creel Lumber Company, in the sum of $ 25,297.03. And on July 2d, 1897, said attorneys filed a bill in chancery in the Columbia circuit court, asking that a receiver be appointed to take charge of the assets of the Creel Lumber Company. The prayer was granted, and John G. Wepfer was duly appointed receiver by the court. This case remained on the docket, as originally commenced, in the name of the J. F. Crawford Lumber Company, though both Smead & Powell and John G. Wepfer, as receiver of the Creel Lumber Company, were notified by Frank E. Gates, immediately after the deed of trust was executed to him, as trustee, by the J. F. Crawford Lumber Company, that he held said indebtedness as such trustee, and it was so understood by Smead & Powell.

Three days after the appointment of John G. Wepfer as receiver of Creel Lumber Company, on the 5th day of July, 1897, D. W. Chandler & Company, commenced an action against the J. F. Crawford Lumber Company, in the Columbia circuit court for the sum of $ 2,338.34, and on the 9th day of said month a summons was issued therein. The indebtedness upon which this action was brought was in the nature of acceptances by the Creel Lumber Company indorsed by the J. F. Crawford Lumber Company. This claim was also filed by the receiver of the Creel Lumber Company, and was credited with its pro rata of the proceeds arising from the sale of the Creel Lumber Company property by the receiver, under order of the court. The balance due, after this credit, reduced the amount to $ 1,496.27, for which the plaintiffs obtained judgment against the J. F. Crawford Lumber Company.

At the institution of the action of D. W. Chandler & Co. against the J. F. Crawford Lumber Company, the plaintiff caused an order of attachment to issue, which was returned without being served. A writ of garnishment was at the same time issued, and was served, on the 16th day of July, 1897, upon John G. Wepfer, as receiver, and Smead & Powell, as attorneys for the J. F. Crawford Lumber Company.

In the suit of the J. F. Crawford Lumber Company against the Creel Lumber Company a decree was rendered in favor of the plaintiff and intervening creditors, and a distribution of the proceeds of the sale of the property of the defendant was ordered by the court to be made by the receiver. A judgment was rendered in favor of the plaintiff for $ 23,000, and a distributive share of about $ 7,000 was awarded theron, and paid to Smead & Powell, by agreement, to hold subject to the order of the court in the action of D. W. Chandler & Co. against the J. F. Crawford Lumber Company.

Afterwards Smead & Powell, garnishees in the action of D. W. Chandler & Co. against J. F. Crawford Lumber Company, answered, and alleged that they held no funds of the defendant, and that the moneys held by them were the property of Frank E. Gates, as trustee, and were so held by them. Gates, as such trustee, filed his complaint, and claimed the funds in the hands of the garnishees, Smead & Powell, by virtue of the deed of trust executed to him as before stated.

The deed of trust and assignment executed by the J. F. Crawford Lumber Company, the statutes, and reports of the opinions of the supreme court of the state of Missouri upon the subject of mortgages and assignments for the benefit of creditors, an agreed statement of facts, and depositions of witnesses, were read as evidence in the trial to the court sitting as a jury; and the foregoing facts appeared, and it was shown that the trustee, Gates converted the assets in his hands, except property of the value of $ 2,000, into money, and paid about thirty-five per cent. of the indebtedness secured by the deed of trust, leaving in his hands about $ 1,200 in money to pay costs, expenses and fees, and the $ 7,000 paid on the judgment against the Creel Lumber Company, and that the balance of such indebtedness still due is about $ 37,000.

The court sustained the attachment, rendered judgment in favor of plaintiffs for the $ 1,496.27, and ordered Smead & Powell to pay the same, if the judgment shall not be reversed by this court; and the garnishees, Smead & Powell, and Gates, as trustee, appealed.

By the laws of what state are the rights of the parties...