Wolf v. Gray

• Decision Date: 22 March 1890
• Parties: WOLF <I>et al.</I> <I>v.</I> GRAY <I>et al.</I>
• Court: Arkansas Supreme Court

13 S.W. 512

WOLF et al.v.

GRAY et al.

Supreme Court of Arkansas.

March 22, 1890.

Appeal from circuit court, Little River county; R. D. HEARN, Judge.

Action by Wolf & Bro., against Gray & Clem to recover $1,591.62. An attachment was issued therein against defendants' property, setting out as grounds of attachment that defendants had sold, conveyed, and otherwise disposed of their property with the fraudulent intent to cheat, hinder, and delay their creditors, and that they were about to do so, or suffer the same to be done, with a like intent. The defendants filed a traverse of the grounds of attachment. These grounds of attachment were tried by the court, and decided in favor of defendants. To this ruling of the court exception was taken, and a motion for a new trial was filed, which was overruled; to which ruling an exception was taken and appeal prayed by plaintiffs.

Cohn & Cohn, for appellants. U. M. & G. B. Rose and Scott & Jones, for appellees.

COCKRILL, C. J.

In Clayton v. Johnson, 36 Ark. 406, an assignment for the benefit of creditors was upheld which stipulated for a release of indebtedness from assenting creditors as a condition to their participation in the assets. There was no express reservation to the debtor, in that case, of the assets remaining after the assenting creditors were paid. In the subsequent case of McReynolds v. Dodman, 47 Ark. 347, 1 S. W. Rep. 552, an assignment similar to that in Clayton v. Johnson, except that it contained an express reservation of the residue of the estate to the assignor, was adjudged fraudulent upon the ground that it was, in effect, an attempt on the part of the insolvent debtor to prefer himself to non-assenting creditors; that is, to those who refused to execute releases. Quickly following this decision came the case of Collier v. Davis, 47 Ark. 367, 1 S. W. Rep. 684, in which it was ruled that, in every assignment such as that passed upon in Clayton v. Johnson, there is an implied reservation of the surplus to the use of the assignor; that, as the effect of an implied reservation is like that of an express reservation of the same benefit, there could be no distinction in principle between them; and that one could not be sustained while the other was condemned. The case of Clayton v. Johnson was, therefore, overruled upon that point. It was not the stipulation for a release — the validity of which, upon the principles of justice and humanity, Chief Justice ENGLISH so earnestly and ably maintained in the latter case — that was condemned in Collier v. Davis, but only the reservation of the surplus by the debtor to himself before satisfying his creditors. An insolvent debtor who executes an assignment for the benefit of his creditors, Judge SMITH, who pronounced the judgments in both the latter cases, maintained, "may stipulate for a release; but he must dedicate all of his property not exempt by law to the payment of all his...