Court Opinion

ID: 6614601
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:20:55.155416+00
Date Added: 2024-06-11T15:58:28.911731
License: Public Domain

On motion for rehearing:
Opinion by
Philips, P. J.
As many of the questions raised in the motion for rehearing have been fully considered and determined in the opinion filed herein, we • will notice only such additional suggestions as are deemed material.
*59I. It is claimed that the deed executed by Cissna was-not operative at the time of levying the writ of attachment because the assigned property was not then in the-hands of any named assignee, nor was. any person, then named, capable of acting as such assignee, inasmuch as a partnership cannot act as assignee. . This suggestion is-incorrect, both in fact and law. The evidence showed, without contradiction, that at the time of the levy of the writ .of attachment Campbell was in the actual, visible possession of the goods and store. He was one of the parties named in the deed as grantee, or trustee. The deed was made to Milton Tootle, Wm. E. Hosea,. Chas. W. Campbell, W. W. Wheeler, and Joshua Motter. They were partners doing business under the firm name-of Tootle, Hosea & Co..
“An assignment for the benefit of-creditors may be made to a single individual or to several.” — Burr on Assignments, sect. 91, 4th ed. And when it is made to-several it is not essential to its validity that, all should accept. Only those who do accept .are required to act. An assignment to partners is good, and the acceptance of', of the trust by one of the firm is sufficient. — Burr on Assignments, sect. 91; Forbes v. Scannel, 13 Cal. 243-288.
II. It is next insisted that Campbell did not qualify as-such assignee until after the attachment was sued out, and that he did so only because coerced thereto by attachment proceedings. The statute..prescribes what action the assignee shall take, and the time in which ho shall qualify. The deed was delivered to Campbell, and by him put to record before- the levy of the writ of attachment. This, without more, would be evidence of acceptance under our statute, where the assignee had taken possession of the property. — Price v. Parker, 11 Iowa 144; Forbes v. Scannel, 13 Cal. 287. The statute, section 355, allows the assignee fifteen days within which-to file his inventory, and by section 362 he is allowed three days, after filing the deed for record, to give bond as such assignee. This Campbell did within two days-after filing the deed, .and within three days from its. *60■execution and delivery. 'These were the statutory evidences of his acceptance and qualification. Moreover, the deed of assignment took effect and became operative :as such the moment it was delivered and accepted, and the assignee- being in possession of the assigned property, the deed would-prevail over any process intervening between that date and the giving of the bond by the .assignee. This must be so because the statute allows .him three days in which to' further qualify. — Brown v. Lyon, 17 Ala. 659; Claytin v. Johnson, 36 Ark. 406.
The overzealous plaintiffs rushed in and seized the ■goods in the hands of the assignee before the statutory period had elapsed for filing the bond as assignee, and now their counsel assert that he did so only because of their hasty action. Admit that Campbell and Cissna ■contended that the deed gave Tootle, Hosea & Co. a preference, and that they said they would not regard it as a -deed of assignment, how could this fact justify the .attachment proceedings? Cissna had already made a ■ deed of assignment. Campbell had accepted it, recorded it, and taken possession of the goods. The plaintiffs Anew this fact when they sued out the writ of attach•ment. The statute then imposed on the assignee the ■ duty to qualify as such by giving the bond and filing the inventory. He yet had three days in which to. act. Plaintiffs had their plain remedy and recourse, if he failed to qualify and administer the trust. The courts never permit a trust to fail for the want of a trustee. — Shockley v. Fisher, 75 Mo. 502; Burr on Assignments, 268. ■ One of the grounds, and the chief one, on which assignments for the benefit of creditors are supported is, “that ■ courts of equity can compel the fair and faithful execution of the trusts they create. . . . After the assignee had taken possession of the property, the title and trust be- ■ came fixed and executed, and it was not in the power of the assignors to defeat ox affect it.” — Forbes v. Scannel, supra.
Counsel in the discussion of this case seem not only to ■overlook the fact that deeds of assignment are favored *61by the law and should be upheld by the courts because1 they beget equality among all the creditors by securing” the adhiinistration of the assets under the supervision of the court, but, also, that from the moment the deed is. executed and delivered each and all of the creditors, acquire an interest in the trust estate, and have a right to have the trust promptly administered under the-statute. It is on this account that the courts quite uniformly hold that no act or word of either the assignor or the assignee, subsequent to the delivery of the deed, can, without the consent of the creditors, in any wise' affect the validity and operation of the conveyance.— Union National Bank v. Bank of Commerce, 94 Ill. 27; Gates v. Lebeaume, 19 Mo. 27.
“The rights of creditors are fixed by the assignment,, and without their knowledge or consent cannot be varied, by any subsequent act of the assignor or assignee. If. valid in its creation, no subsequent fraudulent or illegal acts of the parties can invalidate it.” — Burr on Assignments, sects. 26N351, and citations. As is said by Wagner, J., in Valentine v. Decker (43 Mo. 544): “Where' an assignment is fair and valid, the legal estate or title will pass to the assignee without any assent expressed, by the creditors, and neither a subsequent judgment or lien creditor will acquire any interest in the property assigned, nor can he attack the assignment unless upon the ground of fraud. This doctrine flows from the common-law rule, that it is not necessary to the creation of a trust by deed in favor of any persons, that the cestui que trust should either be a party or assent to it. If the trust be for his benefit, the law presumes his assent to it till the contrary is shown. Such trusts have always been executed on the idea that the deed was complete when executed by the parties to it.”
III. We are referred by counsel to Bump on Fraud, where he says: “The instrument must stand or fall upon the character impressed upon its face by the parties, and by them sent out to the world as expressing the contract and purposes of the parties to it.” We think the learned *62■counsel unfortunate in this reference for their purpose. It is no authority for their contention that the character of the instrument -is-to be gathered from the outside declarations of the parties, or the legal construction they may have placed upon it. It must stand or fall by the character impressed upon its face. There is ho ambiguity about the deed. It is plain and explicit. ' What the parties, in the meaning of the author, sent out to the world was impressed upon the face of the papers and spread upon the records of the county.' And, as we have already stated, no subsequent bill of sale, with or without the endorsement on the back of it, could in any degree lessen the legal effect and operation of the sole act of conveyance. Otherwise it could be that a debtor, after making a formal deed of assignment, might avoid it and vacate it as against all the other creditors by executing to the assignee creditor a mere bill of sale.
IY. It is in this connection that we are referred by the motion for rehearing to numerous decisions of the supreme court of this state as having been overlooked by us in writing the opinion herein. •
These cases all bear upon the doctrine of estoppel in pais. But we are' unable to conceive how the plaintiffs can invoke the doctrine of estoppel against the defendant. ■ They were not content with what Campbell and ¡Cissna said about the sale, but their attorney demanded ¡to see the evidence of the transfer,- which was exhibited ¡to him. The original was then on record. ' There was no 'concealment. The deed spoke for itself. The parties had impressed upon its face the nature of their arrangement. 'Even to the unlearned in- the law, the maxim applies that every one is presumed to know the law, and we may be pardoned for applying it to the instance of one learned in the law. On its' face it was a deed of- assignment, executed and recorded, and it was not in the power of the parties to alter, modify, of evade it without the consent of these very plaintiffs. The very basis of an estoppel in pais is fraud. The representation relied upon Ymust have been made with the knowledge of the truth *63to one ignorant of it.” If A say to B that he has sold to C a horse, and at the time exhibit to B the bill of sale ■calling for a cow, and B at the time is shown the cow, how conld he claim that A was estopped from after-wards denying that it' was a horse ? . An estoppel is always removed by proof that the party asserting its existence, even though mistaken as to his rights in law, had notice of the true state of the facts when he acted.— Big. on Estop. 520. And this is especially so in respect of a question of title or right under a deed, where the deed is open to the inspection of the party, and the more so where he actually sees it. — Bales v. Perry et al., 51 Mo. 453; Kingman v. Graham et al., 51 Wis. 246. It is only where the conduct or representation of the party “becomes a fraud that it postpones.” “If the truth be known to both parties, or if they have equal means of knowledge, there can be no estoppel.’5 —Bales v. Perry, supra.
The whole truth of this matter is, that the plaintiffs misconceived the character and legal effect of the instrument of conveyance, and brought their attachment on the idea that it was a mere deed of trust, improperly attempting to prefer one creditor to the hurt of another; and because the plaintiffs did not know their rights they want the deed interpreted as they understood it.
V. It is claimed that the court did great injustice to counsel for plaintiffs in the opinion in saying that they had tried the case below, throughout, upon the question of the- intent of defendant in making the deed, whereas In fact they “argued for a reversal against such construction being put to the jury.” We have re-examined the instructions asked by the plaintiffs, some of which the court gave, and we again assert, that in fourteen instructions asked, the question of the defendant’s intent in making the deed is made the foundation of recovery by plaintiffs; and the court was asked to declare to the jury, in one or more instructions, that if the defendant designed by deed to prefer Tootle, Hosea & Co., they should find for plaintiffs.
*64It is true, that in their brief, filed in this court, counsel face about and argue that “the private or secret motives” which influenced the defendant in making the-deed should not have gone to the jury. This but illustrates a frequent occurrence. Parties too often try the-case on one theory in the court below, and then argue-another in the appellate court. But our province is to-review the case as tried below, and to determine whether-the trial court committed error to appellant’s injury.
YI. Among the many controlling decisions of the supreme court, with which our opinion is alleged to conflict, is that of Potter v. McDowell (31 Mo. 69). In our humble-opinion, the case is in perfect harmony with the views expressed by us in the opinion under review.
Scott, J., says: “The l'aw does-not concern itself with the private or secret motives which may influence the debtor. It does not deal with his conscience. He may make the deed with the most upright intentions, really believing that he has the right to do so, and yet if that deed was voluntary and hinders and delays creditors, it-is fraudulent.”
YII. I apprehend that some confusion often exists, in-the minds of both judges and counsel in dealing with these questions, in confounding the grounds of attachment under our statute with the action to set aside deeds-under the statute concerning fraudulent conveyances. Under the latter statute, “the intent to hinder, delay, or defraud creditors of their lawful actions” is made the gist of the action. But under the former statute, as we-attempted to develop in the opinion herein, the imputed fraudulent conveyance must be such as to hinder or delay creditors.
And on farther reflection and consideration we are persuaded that it is a contradiction in terms to say that a deed which amounts to an assignment under our statute, and operates for the benefit and protection of all the-creditors of the debtor, can be held to hinder or delay creditors. As no motive or purpose of the grantor can possibly thwart its operation, or interrupt,, or divert it» *65beneficent end, it would practically annul the statute of assignments to say that such a deed, accomplishing by its legal construction what the statute designed, c’ould be assailed by a creditor in any form of action, simply because the debtor had some ulterior object outside of the deed in making it.
Speaking for myself, I very much question whether property in the hands of an assignee under a deed of assignment is the subject of seizure under an attachment. In the hands of the assignee it is in custodia legis, and not amenable to process. But it is not necessary to go so far in this case.
Yin. We reaffirm, also, after a re-examination of the evidence in this .case, that there is nothing in this record which would warrant any jury in finding that there was any “trick or contrivance to defeat creditors,” outside of the deed, which it was designed to promote or aid.
Counsel lay much stress upon the fact that there was evidence tending to show that Campbell had promised Cissna that he would'“stock up the goods.” Campbell testified that he told Cissna it was his intention to “stool?; up the goods,” but it was not his agreement, and that he did not do so because Cissna did not ask him to do it. There was no evidence that it was to be done out of the proceeds of the stock conveyed, or that there was to be any delay in foreclosing the trust. And- it is not conceivable that if the assignee, out of his own funds, should have bought new goods and put with the old to aid and enhance their sale, how any creditor could have justly complained. But it is sufficient to say, that the deed being an assignment, the statute prescribes the precise course of procedure by the assignee; and it was not possible for him to so conduct the trust so as, in contemplation of law, to hinder or delay any creditor. There was nothing on the face of the deed to make it inoperative as an assignment; and that is the end of this controversy.
We may not inappropriately conclude this review by applying the language of Lord Ellenborough in Pick-*66stock v. Lyster (3 Man. & Sel. 371): .“The assignment is to be referred to an act of duty rather than of fraud, when no purpose of fraud is proved. The act arises out of a discharge of the moral duties attached to his character of debtor to make the fund available for the whole body of creditors. It is not .the debtor who breaks in upon, the rights of the parties by this assignment, but the creditor who breaks in upon them by proceedings in this suit.” In the same case, Bayley, J., said: “It seems to me that this conveyance,, so far from being fraudulent, was the most honest act the party could do. He felt that he had not sufficient to satisfy all his debts, and he proposed to distribute his property in liquidation of them; this was not acceded to, for the plaintiff endeavored by. legal process to obtain his whole debt, the obtaining of which would have swept away the property from the rest of the creditors.”
It is, therefore, with little grace that plaintiffs now complain, if their attachment is not maintained, they will lose all, as they cannot be admitted to share in the distribution under the assignment after assailing it.— Valentine v. Decker, 43 Mo., supra.
Duos qui sequitur lepores, neutrum capit.
The motion for rehearing is denied.
Ellison, J., concurs, Hall, J., not sitting.