The H. B. Claflin Co. v. Lubke

• Decision Date: 21 May 1901
• Parties: THE H. B. CLAFLIN COMPANY et al., Plaintiffs in Error, v. GEORGE W. LUBKE, Jr., Trustee, et al
• Court: Missouri Supreme Court

63 S.W. 407

162 Mo. 648

THE H. B. CLAFLIN COMPANY et al., Plaintiffs in Error, v. GEORGE W. LUBKE, Jr., Trustee, et al

Supreme Court of Missouri, Second Division

May 21, 1901

Error to St. Louis City Circuit Court. -- Hon. Jas. E. Withrow Judge.

Affirmed.

Nathan Frank and D. W. Voyles for plaintiffs in error.

The instrument before the court is a voluntary assignment, as contemplated in section 323, Revised Statutes 1889, relating to voluntary assignments. (1) It fully complies in its palpable intent and real effect with the meaning of the term "voluntary assignment," as denoted by the tenor of that section, and with the meaning of the term in law and in common usage. "Assignment," Bouvier's Law Dict.; "Assignment," Anderson's Dict. of Law; White v. Cotzhausen, 129 U.S. 344; Burrill on Assignments (6 Ed.), sec. 2, p. 3; Tompkins v Wheeler, 16 Peters, 106. (2) It is not, in fact, a security for the payment of debts, but an absolute appropriation of the debtor's entire property to their immediate payment, according to the order of preference indicated in the conveyance, and to the extent that the assets will allow. Under the circumstances, then, the debtor being greatly insolvent, the conveyance works as complete a voluntary assignment as it is possible for a man to make. Preston v. Spaulding, 120 Ill. 208; White v Cotzhausen, 129 U.S. 329; Berry v. Cutts, 42 Me. 445; Lucas v. Railroad, 32 Pa. St. 464; Wallace v. Wainwright, 87 Pa. St. 266; Conely v. Collin, 78 N.W. 555; Fallow's Appeal, 42 Pa. St. 235; Holt v. Boncroft, 30 Ala. 193; Perry v. Holden, 22 Pick. 269; Massey v. Noyes, 26 Vt. 471; VanHorn v. Smith, 59 Iowa 142; United States v. Bank, 8 Rob. (La.) 302; McCart v. Maddox, 68 Tex. 456; City National Bank v. Bank, 87 Tex. 295. (3) This provision in the conveyance indicates the nature of the instrument -- providing for the payment of "any other demands owing by the parties of the first part which may have been inadvertently omitted therefrom." No mortgage which would omit the names of the mortgagees or amount of the debt would be considered by any court as a valid instrument. (4) The instrument in question is a voluntary assignment, and the provision preferring one creditor over another in the instrument is void, or that provision of the statute is meaningless. Manny v. Logan, 27 Mo. 528; Milling Co. v. Commission Co., 128 Mo. 490; Callihan v. Powers, 133 Mo. 499; Box v. Goodbar, 54 Ark. 6; Lucas v. Railroad, 32 Pa. St. 464; Wallace v. Wainwright, 87 Pa. St. 266.

Seneca N. Taylor, Chas. Erd and Seneca C. Taylor for defendant in error, Continental National Bank.

(1) No instrument can be construed to work a general assignment under the statute unless it distinctly appears that the grantor so intended it. If the instrument, construed in the light of the surrounding circumstances, appears to have been given as a mortgage it must be considered as a mortgage; and where a deed of conveyance in trust is made to a trustee to pay certain described debts from the proceeds of property conveyed and repay the grantor any surplus, the deed will be treated as a security and not as a voluntary assignment. Mfg. Co. v. Woodson, 130 Mo. 119; Jaffrey v. Mathews, 120 Mo. 317; Hargadine v. Henderson, 97 Mo. 375; Crow v. Bardsley, 68 Mo. 435; Dry Goods Co. v. Grocery Co., 68 Mo.App. 290; Buggy Co. v. Woodson, 59 Mo.App. 550. (2) It is the settled law in this State, enforced by repeated rulings, that the statute of assignment was not intended to abolish or abridge a debtor's common-law right, whether solvent or insolvent, in good faith, to mortgage or pledge the whole or any part of his property for the benefit of one or more of his creditors; and this object may be accomplished by a transfer to a trustee for the creditors or by conveyance in the nature of a mortgage, as in the case at bar. Jaffrey v. Mathews, 120 Mo. 317; Hargadine v. Henderson, 97 Mo. 375; Dry Goods Co. v. Grocery Co., 68 Mo.App. 294; Haas v. Distilling Co., 64 Mo.App. 131. (3) A chattel deed of trust given to secure the individual debts of several persons is regarded in law as several mortgages, and if invalid as to one or more of the debts for any cause, it may still be valid as to the others. Kingman & Co. v. Buggy Co., 150 Mo. 282; Woodson v. Carson, 135 Mo. 521; Kuh v. Carvin, 125 Mo. 547; Burnett v. Marshall, 22 Pick. 556; Teft v. Stern, 73 F. 594; Cobby on Chattel Mortgages, secs. 450, 416, 418; Jones on Chattel Mortgages (3 Ed.), secs. 336, 351. (4) Such a mortgage is distinguishable from one that secures a single indebtedness, of which part thereof is fraudulent. In such case the entire mortgage is void. Woodson v. Carson, 135 Mo. 521; Boland v. Ross, 120 Mo. 219; State ex rel. v. Hope, 102 Mo. 428. (5) There is, perhaps, no principle of law better settled in this State than that a debtor, though in failing circumstances, may prefer one of his creditors over another, and may secure such preferred creditors to the exclusion of all others, provided, only, that he does so in good faith. Calihan v. Powers, 133 Mo. 497; Milling Co. v. Commission Co., 128 Mo. 488; Hard v. Foster, 98 Mo. 297; Hargadine v. Henderson, 97 Mo. 375; Dougherty v. Cooper, 77 Mo. 528; Murray v. Cason, 15 Mo. 378; Seller v. Bailey, 29 Mo.App. 174; Sampson v. Shaw, 19 Mo.App. 27; Bank v. Bank, 136 U.S. 223.

Lubke & Muench and Lyon & Swarts for defendants in error, Lubke and Acruman.

(1) The statute does not and was not intended, to any further extent, to abolish or abridge the debtor's common-law right, "whether solvent or insolvent, in good faith to sell, deliver in payment, mortgage or pledge the whole or any part of his property for the benefit of one or more of his creditors. This construction of the statute has been uniformly recognized and maintained by the courts of this State from the beginning." Crow v. Beardsley, 68 Mo. 435; Hargadine v. Henderson, 97 Mo. 375; Becker v. Rardin, 107 Mo. 111; Jaffrey v. Matthews, 120 Mo. 317; Mfg. Co. v. Woodson, 130 Mo. 119; Callihan v. Powers, 133 Mo. 481; Kingman & Co. v. Cornell-Tebbetts M. & B. Co., 150 Mo. 282; In re Zwang, 39 Mo.App. 369; Haase v. Distilling Co., 64 Mo.App. 135; Dry Goods Co. v. Grocer Co., 68 Mo.App. 290; Bank v. Bank, 136 U.S. 223. (2) Acruman "in consideration of the debts (some not yet due) and trusts hereinafter mentioned and created and the sum of $ 1.00," and being "desirous of securing the payment of aforesaid debts and obligations" executed the conveyance which, in its defeasance clause and every other respect, follows in terms instruments passed upon by this court in the cases cited under point 1. The instrument is a chattel deed of trust in the nature of a mortgage, which differs from an assignment in this, that in the former the grantor still has an "equitable interest in the assigned property," whereas, the latter is an "absolute appropriation," an indefeasible conveyance of the grantor's property to his debts. Burrill on Assignments, secs. 6 and 8, and cases cited, supra. (3) A chattel deed of trust, in the nature of a mortgage securing separate, independent debts, will be "treated as if separate mortgages had been made in favor of each creditor." Kingman & Co. v. Cornell-Tebbetts M. & B. Co., 150 Mo. 282.

OPINION

SHERWOOD, P. J.

The petition and demurrer thereto will accompany this opinion.

The amended petition, omitting caption, formal parts and the list of creditors under schedule B, is as follows:

"And for cause of action plaintiffs state:

"They are creditors of the said defendant, Albert Acruman; that is to say, said Albert Acruman is indebted to all of said plaintiffs for merchandise bought from them by said Albert Acruman between the first day of January, 1897 and the twenty-first day of July, 1897, as follows, to-wit:

The defendant, Albert Acruman, is indebted to the

H. B. Claflin Company in the sum of

$ 553.36

Watson, Porter, Giles & Co., in the sum of

936.25

Standard Summer Neckwear Co., in the sum of

205.30

John P. Logan, in the sum of

369.25

Excelsior Shirt Co., in the sum of

190.50

Herman Scheuer, in the sum of

81.30

American Lead Pencil Co., in the sum of

266.25

Stein Bros., in the sum of

309.78

American Stamping Co., in the sum of

1,114.25

Wm. Meyer & Co., in the sum of

249.50

Langsdorf & Co., in the sum of

88.36

Curren & Steiner, in the sum of

296.14

Strauss, Sachs & Co., in the sum of

542.40

Boyd, Sutton & Co., in the sum of

550.81

Butler Hard Rubber Co., in the sum of

585.31

H. Richters's Sons, in the sum of

174.46

James Thompson & Co., in the sum of

203.01

D. E. Sicher & Co., in the sum of

237.25

Julius Becker & Co., in the sum of

396.00

"That on the twenty-first day of July, 1897, the said Albert Acruman made, executed and delivered to the defendant, George W. Lubke, Jr., a certain conveyance, in words and figures, as follows:

"This conveyance in trust made and entered into this twenty-first day of July, 1897, by and between Albert Acruman, of the city of St. Louis, State of Missouri, party of the first part, and George W. Lubke, Jr., of the city of St. Louis, Missouri, party of the second part.

"Witnesseth That the said party of the first part, in consideration of the debts and trusts hereinafter mentioned and created, and of the sum of one dollar to him in hand paid by said party of the second part, the receipt whereof is hereby acknowledged, does grant, sell, convey, confirm, transfer and set over unto him, said party of the second part, first, all and singular, the stock of department-store goods now belonging to and in the possession of the party of the first part at the premises No. 616 North Seventh street, in the city of St. Louis, State of Missouri, and consisting of dry goods, hosiery, notions, ladies' and gentlemen's furnishing goods, tinware,...