Wood v. Adler-Goldman Commission Co.

• Decision Date: 09 June 1894
• Citation: 27 S.W. 490
• Parties: WOOD, Sheriff, v. ADLER-GOLDMAN COMMISSION CO.
• Court: Arkansas Supreme Court

27 S.W. 490

WOOD, Sheriff, v. ADLER-GOLDMAN COMMISSION CO.

Supreme Court of Arkansas.

June 9, 1894.

Appeal from circuit court, Logan county; Archibald S. McKennon, Special Judge.

Action of replevin by the Adler-Goldman Commission Company against O. C. Wood, sheriff of Logan county, Ark. From a judgment for plaintiff, defendant appeals. Affirmed.

Jos. M. Hill (Anthony Hall, of counsel), for appellant. Oscar L. Miles (John S. Little, of counsel), for appellee.

RIDDICK, J.

The questions to be determined in this case arose in an action of replevin brought by the appellee, the Adler-Goldman Commission Company, a corporation organized under the laws of Missouri, against O. C. Wood, the sheriff of Logan county, to recover a stock of merchandise, store fixtures, etc., which said sheriff had seized as the property of Oppenheimer & Co., under writs of attachment against them. The appellee claimed to have purchased said property and certain lands from Oppenheimer for the consideration of $8,500, which sum it placed as a credit on the indebtedness of Oppenheimer & Co. to them. Oppenheimer & Co. were insolvent, and, before said credit was entered, were indebted to appellee in a sum amounting to over $50,000, in addition to indebtedness to other parties. On the same day that the bill of sale for the property in controversy was executed, Oppenheimer & Co. executed another instrument, in which, after reciting that they were indebted to appellee in a large amount, they say: "And also for the further consideration that the said Adler-Goldman Commission Company agree to pay the following named parties, to whom we are justly indebted as per amount set opposite their names: [Here follows a list of certain creditors and amounts due them]. Now, therefore, for the purpose of securing the same, we hereby transfer to the said Adler-Goldman Commission Company, by way of pledge, the choses in action described in the schedule hereto annexed; also twelve hundred and sixty-one bales of cotton now in their hands and in transit, consigned to them, said cotton to be sold by them in the usual way within thirty days from this date, and the net amount, after deducting usual expenses, to be credited to above indebtedness. If, after thirty days from this date, any of said choses in action should remain uncollected, and any of our debts unpaid, we hereby authorize the said Adler-Goldman Commission Company to sell said choses in action at public sale for cash, at the front door of our storehouse, in the town of Paris, Arkansas, after giving ten days' notice of the time, place, and terms of sale, by advertisement in some newspaper published in the county of Logan, Arkansas, or by written or printed notices posted in at least ten conspicuous places in said county; and out of the proceeds of said sale the said Adler-Goldman Commission Company shall pay our debts due them as above, so far as said proceeds will extend, rendering the overplus to us. Witness our hands, this 11th day of Jan., 1892. [Signed] Ike Oppenheimer, S Sternberg, of the firm of Oppenheimer & Co."

Appellants contend that these two instruments, — the bill of sale of the property in controversy, and the transfer of the cotton and choses in action, — having been executed on the same day, and for the purpose of carrying out a preconceived intention, must be construed together, and that they amount in law to an assignment for the benefit of creditors, and are void because not made in conformity to the statute. Conceding that these instruments must be construed together, as part of the same transaction, the question for this court to determine is whether, when thus construed, they constitute an assignment for the benefit of creditors. By the term "voluntary assignment" is meant a conveyance of some or all of a debtor's property in trust for the purpose of being disposed of by the trustee to raise a fund to pay debts, as distinguished from a sale to a creditor in payment of his claim, and from a pledge or hypothecation as a security, in the nature of a mortgage. And. Law Dict. 83; Dias v. Bouchaud, 10 Paige, 461. "To constitute an assignment, the property must be conveyed absolutely, to raise a fund to pay debts." Richmond v. Mississippi Mills, 52 Ark. 35, 11 S. W. 960. One of the conveyances mentioned above purported to be a bill of sale of the stock of merchandise and chattels in controversy, in part payment of the debt due from Oppenheimer & Co. to appellee. The other purported to be a pledge of certain choses in action and bales of cotton, to secure the remainder of the debt due appellee, and also for an additional sum which, in consideration of the making of such pledge, appellee agreed to pay to certain creditors of Oppenheimer & Co. Oppenheimer & Co. had refused to make these transfers until appellee expressly agreed to pay these sums for them to the creditors designated. Having agreed to pay these sums as an inducement and a consideration for these conveyances after they were executed, appellee was in the same position as if Oppenheimer & Co. had paid it so much money for the use and benefit of the creditors. The statute regulating assignments for the benefit of creditors was not intended to prevent embarrassed creditors from selling property to pay debts, nor from mortgaging or pledging it for that purpose. A debtor, when he has pledged, mortgaged, or sold his property to obtain money to pay debts, may, if he chooses, allow the lender of the money to distribute the fund among the creditors, provided the transaction is free from any dishonest intent. Although, in such a case, the lender would hold the fund in trust for the creditors, and could be compelled to perform the trust, the statute regulating assignments for the benefit of creditors would not apply, for the reason that, in such a transaction, there would be no conveyance of property in trust for the purpose of being disposed of by the trustee to raise a fund to pay debts, and, without such a conveyance of property in trust for the purpose of being disposed of by the trustee, there is no assignment. It is only where property is conveyed to another in trust to be disposed of by him for the...