Thompson v. Preston & Stauffer

• Citation: 73 Miss. 587,19 So. 347
• Parties: S. R. THOMPSON v. PRESTON & STAUFFER ET AL
• Decision Date: 17 February 1896
• Court: United States State Supreme Court of Mississippi

19 So. 347

73 Miss. 587

S. R. THOMPSON v. PRESTON & STAUFFER ET AL

Supreme Court of Mississippi

February 17, 1896

October 1895

FROM the chancery court of Jackson county HON. W. T. HOUSTON Chancellor.

The firm of Roberts & March, merchants at Scranton, made an assignment for their creditors, with preferences, to S. R Thompson, assignee, on December 18, 1894. The assignment conveyed the "stock of goods, wares and merchandise now in our store in Scranton, Miss.; also all the notes and accounts due us, a mare, a wagon and a spring cart."

The assignee filed his petition and bond and schedules, as required by chapter 8 of the code of 1892, and was proceeding to administer the trust in accordance with the provisions of said chapter, when appellees, creditors of Roberts & March filed their bill attacking the assignment as fraudulent. The bill alleges "that, while said defendants, Roberts & March, and said S. R. Thompson, are putting forth the pretense that the said pretended assignment is a general assignment for the benefit of the creditors of Roberts & March, and are seeking to have the same recognized and administered as such by this honorable court, still, as a matter of fact and a matter of law, as complainants are advised, it is only a partial assignment, and, as such, cannot be recognized or administered in this court pursuant to the provisions of said statutes governing general assignments." At the February (1895) term of the chancery court of Jackson county, the complainants demurred to the assignee's petition, one of the grounds of demurrer being that the assignment was a partial assignment, and, as such, could not be recognized by the court, nor could the assignee be treated as a receiver of the court, and the court sustained the demurrer upon this ground, holding that the assignment was a partial assignment.

Defendants then answered the bill, denying all fraud, and averring that the assignment was a general assignment, and, while it only conveyed the partnership property, that was all the property owned by them, neither of them owning individual property. The books of the assignors were introduced in evidence, and the blotter showed an entry made on the day before the assignment was made, charging Chas. Krebs with ten sacks of oats, $ 21.83. This entry was erased. There is nothing in the evidence to show when or by whom this erasure was made. The assignors and the assignee all testified that they did not do it and knew nothing of it, but the evidence shows that Krebs in fact paid the account before the assignment was executed. There was some evidence that Roberts & March sold some goods for less than cost, and did not account for the money they took in for goods sold and accounts collected for several days previous to the assignment; and Roberts, one of the assignors, was asked what became of the money that was taken in on the day of the assignment and several days previous, and he replied, that they put it in their pockets and "blowed it in, " some of it before and some after the assignment.

The court, on final hearing, treated the assignment as a partial one, and valid on its face, but held that the clause conveying the accounts due the assignors conveyed all the accounts on the books that did not appear on the books to be paid at the time of the assignment, whether they were in fact paid or not before the assignment, and that, because the account on the blotter against Krebs was scratched out after the assignment was executed, the assignment was fraudulent and void as to complainants. From this decree defendants appealed.

Decree reversed and bill dismissed.

H. Bloomfield, for appellants.

The reasons of the chancellor for setting aside the assignment are not sufficient. The deed transferred "all the accounts due Roberts & March." It is admitted by complainants that the account of Krebs was paid before the assignment was executed. That account, therefore, was not due and could not have been transferred to Thompson. It was only entered on the blotter, and when it was paid some one ran his pencil across it, and doubtless forgot it, but it was done before the assignment was made, because it is not embraced in the list of accounts made out by the assignee.

The evidence is clear that Roberts & March owed B. L. Hamilton the $ 1, 000 for which he was preferred. The allegation in the complainant's bill that Roberts & March attempted to have the assignment recognized and administered as a general assignment, when in fact it is only a partial assignment does not affect the validity of the assignment.

That part of the assignment which is in the following words: "The assignee shall sell the property assigned, at public or private sale, for cash, in such manner as to realize the largest sum of money from said property, and shall, without delay, proceed to collect, by suit or otherwise, all solvent notes and accounts due us; the assignment is made for the benefit of our creditors, and to realize the largest sums of money practicable from our means, " does not give the assignee an undue discretion in administering said assignment. 61 Miss. 463; 62 Ib., 600; 59 Ib., 80, 102, 114; 67 Ib., 704; Burrill on Assignments (6th ed.) pp. 382, 269; Am. & Eng. Enc. L., 876; 60 Miss. 97.

The fact that Roberts & March sold goods on the day of the assignment, in the regular course of business, does not affect the validity of the assignment. The courts have held "that while a deed of assignment for creditors was in course of preparation, and, without the knowledge of the assignee or of the creditors, the assignor sold goods at reduced prices and failed to pay over the proceeds to the assignee, does not avoid the assignment." Digest So. Rep., p. 170, §§ 18, 19, citing 90 Ala. 359. The assignee and the preferred creditor testified that they did not know Roberts & March were selling goods at reduced prices.

The fact that Roberts & March retained a few dollars, realized from the sale of the goods before the assignment was executed, does not invalidate the assignment. Goodbar v. Tatum, 10 So. Rep., 578. A secret fraudulent intent on the part of the assignor in making a general assignment, unknown to the assignees at the time they accepted the trust, and to the creditors, does not authorize a creditor to set aside the assignment as fraudulent. Barrette v. Pollak Co., 18 So. Rep., 615.

Brame & Alexander, on the same side.

The assignment is a partial and not a general one. This appears on the face of the instrument, which purports to assign certain designated assets and nothing more. Besides, appellees are irrevocably committed to that theory because the bill so alleges. The only authority for giving complainants a standing in court was that the assignment was not a general one and did not come within the provisions of chapter 8 of the code of 1892, and it was on that very ground attacked by complainants. Defendants made a mistake of law, and the assignee proceeded with the assignment by giving bond and taking such steps as are required in cases of general assignments by the code chapter, but this was only a mistake of law, and could not affect the real character of the instrument. Jones v. McQuien, 71 Miss. 98.

Complainants were made parties to the proceedings by the assignee, and demurred to the petition upon the ground that the assignment was not general. Their demurrer was sustained and the proceedings dismissed. These parties are bound by that adjudication, and are estopped to claim that the assignment is a general one. If it had been a general assignment, complainant's remedy would have been by cross petition, under the provisions of the code, and they would have no standing in the court.

The chancellor found against complainants on all questions of fact. All allegations of fraud are denied by the sworn answers of Roberts & March, and there is little or no testimony tending to support the allegation. The finding has the same conclusive effect as the verdict of a jury. Walker v. Walker, 67 Miss. 529.

The chancellor correctly found in favor of defendants as to the genuineness of the debts preferred. He decided against defendants, and invalidated the assignment because of a little entry on a blotter, in which the assignors, the day before the assignment, had charged one Krebs with ten sacks of oats, $ 21.85, which entry was erased by some one in the store, it does not appear by whom. The oats were delivered to Krebs the day before the assignment. That is not questioned. A blotter entry was made, charging him with the oats, but, as it was a cash transaction, no entry was made except on the blotter. Krebs paid the money before the assignment; nothing further was done about it. The assignment was afterward executed, and an inventory of the goods and a list of the claims assigned were made out. The list did not include the account against Krebs. On the trial the entry was found erased in pencil. Against the law and against the facts, the chancellor presumed that the erasure had not been made until after the execution of the assignment. Having assumed this, he held that the failure to erase the charge prior to the execution of the assignment, was a retention of something which the assignment purported to convey. There is no evidence that there was any alteration of the books or accounts after the assignment was executed. The presumption of honesty, and the presumption of the validity of the assignment, entitled defendants to a presumption that the erasure was made prior to the assignment. There was no allegation or intimation in the bill in regard to this entry.

The assignment does not purport to convey, and the assignors did not pretend to assign, any account against Krebs. It seems to us folly to argue that the language of the...