Court Opinion

ID: 5142580
Source: CourtListenerOpinion
Date Created: 2022-01-01 17:20:10.868065+00
Date Added: 2024-06-11T08:24:37.340485
License: Public Domain

Townsend, J.
The appellants, in their brief, have stated four objections to the deed of assignment in this case, as showing upon its face that it is fraudulent in law: First. “For the reason that it fails to convey all the debtor’s property, and at the same time makes several classes of preferred creditors, who in each instance are compelled to give a full release of their indebtedness as a condition of sharing *366the benefits of such preferences. ” Second. ‘ ‘If the property or any part of it, described in Schedule C, does not pass, under the terms of the deed, to the assignee, and Belt cannot claim it under the homestead or exemption laws, the deed is void. ” Third. ‘ ‘Belt chose to make his assignment in the Indian Territory, and the execution, interpretation, and validity of it must be determined by its laws.” Fourth. “Belt decided for himself that ho was entitled to the benefits of the exemption laws of both Arkansas and the Indian Territory. He did not leave it — as he might appropriately have done — to the law to determine for him what property he was entitled to exempt, if any, nor in what jurisdiction he might assert the right. It was his plain intention to reserve to himself all the property set forth in Schedule C, and not to convey the title to it to his assignee, and he could not have used plainer or more appropriate language to effect his purpose. He might have made any disposition of property thus excepted, no matter how much, Or how valuable; and his assignee could never have claimed any right or title to the same, or recovered it under the deed for the creditors, for no such rights passed to him by the deed.” The law regulating “assignment for the benefit of creditors” in force in the Indian Territory at the date of the execution of the deed of assignment in this case is chapter 8 of Mansfield’s Digest of the Statutes of Arkansas, which was adopted and extended over the Indian Territory by the act of congress approved May 2, 1890, and in construing that statute the circuit court of appeals of the Eighth circuit has said: ‘ ‘When called upon to construe the sections of the statutes thus adopted, we deem it our duty to follow the construction given thereto by the supreme court of Arkansas. The adoption of this course as the settled rale to be followed by this court and the court of original jurisdiction in the Indian Territory must commend itself to all interested. ” Appolos vs Brady, 1 C. C. A. 299, 49 Fed. 401. Applying the rule *367of construction thus laid down to the objections of appellant, it becomes necessary to examine the decisions of the supreme , court of Arkansas. It will first be observed that the deed of assignment in this case, after describing specifically the property conveyed to the assignee, contains the following: “And I, the said John C. Belt, hereby intending to convey unto the said C. M. King, for the purpose and trust as aforesaid, all my effects of every kind and description, wherever situated, both real, personal and mixed, all notes, book accounts, and choses in action, whether described in this deed or not, save and except only such real and personal property as is exempt under the law from forced sale, a schedule of the property so claimed by the said John C. Belt, to be exempt from forced sale, is hereto attached, marked ‘Schedule C,’ and made a part hereof. ” In Baker vs Baer, 59 Ark. 503, 28 S. W. 28, a deed of assignment conveyed all the lands and other property of the assignor, “except what are exempt to him by the laws of the state,” the exemptions being fully described in a schedule attached. The lands claimed as exempt had never been impressed as a homestead. 'The court held that, since exempt property was only reserved, the title passed to assignee. The court observe: “The law, upon the evidence of the assignor, determines that the lands claimed as a homestead were never so impressed, and therefore are not exempt. Hence the title passed absolutely to the assignee. The language of the granting clause is unambiguous, and should be held to mean what it says. Only property ‘exempt’ was reserved. This property was not reserved. This is not a case of conveying all in the deed, and at the same time secretly or intentionally witholding a portion for the debtor’s benefit. All was conveyed by the definite description; and this, so far as the deed itself and the claim of exemptions thereto attached is concerned, argues most strongly the good faith and. honesty of the transaction.” But, if the *368grantor knew that the lands were not exempt, it was pointed out to his creditors, and is reason for saying there was no fraudulent withholding. “A reservation of the kind mentioned would not invalidate the assignment. ” An instruction to the effect that such a reservation would render the assignment fraudulent and void was erroneous. This is directly applicable to this case. In King vs Dry-Goods Co., 60 Ark. 1, 28 S. W. 514, heard on demurrer, the identical deed of assignment in this case was passed upon by the supreme court of Arkansas, and, after q'uoting the clause in the deed hereinbefore set out, the court said: “Ls the deed void upon its face? is the question in the case. Such creeds of assignment have been upheld by the decisions of this court holding that the debtor, in making assignment of his property ^or ^ene®-^ °f creditors, may exact releases from creditors as a condition of preference under tho deed, where he dedicates ‘all of his property not exempt by law to the payment of all of his creditors; not necessarily to the payment of all in equal proportions.’ McReynolds vs Dedman, 47 Ark. 351, 1 S. W. 552.” The court say further: “As to the claim of exemption in the deed, there is no difference in principle between the deed of assignment in this case and the deed in the case of Baker vs Baer, 59 Ark. 503, 28 S. W. 28, which was held not objectionable; the ruling in which case as to this question is approved and adopted in this.” The court furthér say that the act of congress of May 2, 1890, putting in force chapter 8 of Mansffeld’s Digest, title “Assignments for the Benefit of Creditors,” and chapter 60 of said digest, title “Executions,” that the “assignor had the right to claim his exemptions as under the laws of the state of Arkansas. ” It is declared to be the established law of Arkansas, in accord with much authority elsewhere, “that a stipulation for a release in a general assignment, which is made only as a condition of preference, does not invalidate the instrument.” Wolf vs Gray, 53 Ark. 79, 13 S. *369W. 512. It was said by the circuit court of appeals, when the demurrer in this case was disposed of by that court, that “an assignment that conveys all the debtor’s property is not a partial assignment; and one that conveys all his property, and then, by mistake, reserves or exempts from the convey-anee the property of another that the assignor could not in any way convey, none the less conveys his entire property, and cannot be obnoxious to the objection that it is a partial assignment, * * * and the assignee may plead and prove the ownership of the property described in the assignment to establish this fact, and to maintain his right to the property assigned. * * * In our opinion, the interplea stated a good cause of action for the recovery of the attached property, and the demurrer should have been overruled. ” Belt vs Robinson, 11 C. C. A. 39, 63 Fed. 92. The court below followed this decision in its first, second and third instructions to the jury, and the jury, by its verdict, found for the appellees. The fourth instruction is the law as declared by the supreme court of Arkansas in Lowenstein vs Finney, 54 Ark. 128, 15 S. W. 153.
Tlpcision of Supreme Court of Arkansas.
Assignment Exemption,
Éofoase'ent!'
interpreta-statutes.
The statement at the close of appellant’s brief that they should have been permitted to show that only 87 per cent, of the fund was distributed, as we view it was simply an effort to violate the agreement and stipulation of record made on the 15th of December, 1893, and the court below was right in holding that whatever rights the appellee King has as assignee were fixed by the conditions existing at the date of his filing his intervention. The counsel have been diligent in citing authorities, but the rule of construction stated in Appollos vs Brady, supra, together with the ruling in the Arkansas supreme court in the hearing, involving this same assignment, in King vs Dry-Goods Co., supra, and the decision of the court of appeals of the Eighth circuit in disposing of the demurrer in this case, — Belt vs Robinson, *370supra, — bas left but little for tbis court to do except to cite tbe Arkansas decisions construing deeds of assignment in tbe various cases that have received tbe consideration of that court. We think the assignment in this case was good, and tbe judgment of tbe court below was correct, and it is therefore affirmed.
Thomas, J., concurs.