Holt & Chambers v. Bancroft

30 Ala. 193
CourtSupreme Court of Alabama
DecidedJanuary 15, 1857
StatusPublished
Cited by42 cases

This text of 30 Ala. 193 (Holt & Chambers v. Bancroft) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holt & Chambers v. Bancroft, 30 Ala. 193 (Ala. 1857).

Opinion

WALKER, J.

It is conceded that the second deed executed by Holt & Chambers, dated the 17th May, 1854, was a conveyance of all their property, including that embraced in the first deed, to secure their creditors generally. This conveyance has been properly treated, by the counsel on both sides, as a general assignment. Burrill on Assignments, 82; Dana v. Lull, 17 Yermont, 890.

Section 1556 of the Code is in the following words: “Every general assignment made by a debtor, by which a preference, or priority of payment, is given to one or more creditors over the remaining creditors of the grantor, shall be and enure to the benefit of all the creditors of the grantor equally.” If the former of these two deeds was executed in contemplation of the latter, and with the intention to execute the latter; and if the two deeds, having the same trustee in each, were separated by a space of eight days, for the purpose of evading the prohibition of a preference contained in the section of the Code above quoted, the law will regard the two deeds as together maldng a general assignment, and will take away from the creditor the preference provided for him. If this proposition can be maintained, it must control the decision of the ease; and’ we therefore proceed to the examination of the arguments and authorities, by which, in our judgment, it is vindicated.

The object of the statute was to prohibit all discrimination by a debtor, making a general assignment, in favor of any of his creditors. It does not aim to deny, and does not deny, to a debtor the power of securing a creditor’s debt by a conveyance of a part of his property. The right of preferring creditors by partial assignments is untouched by the section of the Code quoted. It is not the preference of itself, but the preference as a feature of a general assignment, which the statute condemns. This construction of the statute is the only one which can be [200]*200adopted, without extending its meaning beyond the natural import of the language, and is supported by the decisions in other states in reference to similar laws. Blakey’s Appeal, 7 Penn. State Reports, (Barr,) 449; Mer. Man. Co. v. Smith, 8 New Hamp. 347; Low v. Wyman, id. 536; Danforth v. Denny, 5 Poster, 164 ; Tillou v. Britton, 4 Halsted, 120.

This opinion is not, therefore, intended to assert that the conveyance of Holt & Chambers for the benefit of Alexander Chambers, would,, if it stood alone, be objectionable in the absence of fraud. The above named section of the Code leaves such a conveyance, when isolated and detached from the subsequent deed, outside of its purview; and the preference provided by the deed is not condemned, unless it is a component part of the general assignment.

It is a well established doctrine of the law, that two instruments of writing may so refer to, and be connected with each other, that they will be construed as one instrument, and such a construction will be placed upon them together, as their provisions would require if embraced in one instrument. — Sewall v. Henry, 9 Ala. 30; Love v. Jones, 4 Watts, 465; Bates v. Coe, 10 Conn. 280. This rule is qne of construction. It is not-necessary to invoke it in this argument. The proposition with which we set out, rests, not upon the idea that the two deeds can by a rule of construction be converted into one instrument, but upon the idea that a general assignment may be made up of two deeds, or of a succession of several distinct deeds. The question in this case is, what effect does the law assign to the two deeds, and according to what principle is their effect to be ascertained and measured. All that we assert is, that the first deed is but a part of a general assignment, completed by the execution of the second deed, as the first day’s travel, although followed by some delay, is but a part of the continued journey. The law regards the two deeds as together composing a general assignment, because it will not permit that to be done indirectly which cannot be done directly. That which violates the policy of a statute is as much con[201]*201demned as if it violated the letter. The law no more tolerates an evasion of a statute by artifice, than a palpable violation of it. — Sharp v. Teese, 4 Halsted, 352; Gulick v. Bailey, 5 Halst. 87; Gray’s Ex’rs v. Brown, 22 Ala. 274; Tennison v. Martin, 13 Ala. 29; Hudson v. Milner, 12 Ala. 670; Bruce v. Lee, 4 Johns. 410. Neither an evasion nor a direct violation of the statute, prohibiting preferences in general assignments, can render absolutely void the deed or deeds by which the preference is attempted to be given, because the statute itself prescribes the effect of its violation. The assignment “shall he and enure to the benefit of all the creditors of the grantor equally.” Visiting, therefore, the act of evading the statute with the consequence of a direct violation, we can only annul the preference, and place the beneficiary of the first deed on a footing with the other creditors.

It is evident that if a party, having determined to make a general assignment of all his property, can anticipate by making partial assignments for the benefit of particular friends, the law can be effectually set at defiance, and might as well never have been enacted. Its policy of preventing preferences in general assignments would he incapable of accomplishment; and the statute itself, inviting to its evasion by the facility of accomplishing the object, would be a dead letter. In truth, if one intending to make a conveyance of all his property, for the benefit of his creditors, convey a part on one day, a part the next, and so proceed until all his property is appropriated according to the original intention, precisely the same end is accomplished as if a general assignment had been made in the outset; and the law must visit the same penalty upon preferences in an assignment accomplished by these successive acts, as if it had been done by a single deed.

The act of Congress of 2d March, 1799, gives the United States a priority of right to the satisfaction of its debts, where its debtor has made a general assignment; at least, such is the effect of its language as construed by the courts. — United States v. Hooe, 3 Cranch, 73. In the case of Downing v. Kintzing, 2 Ser. & R. 326, [202]*202Tilghman, Ch. J., says, in reference to the effect under that act of a partial assignment, made thirty-one days in advance of a general assignment: “Now here has been a voluntary assignment of the whole estate, for the benefit of creditors,- and the only objection to it is, that it was-not done at one time. The argument is, that the assignment to the plaintiff was but of part of the estate, and therefore not a case in which the United States had a preference. But the law is not to be evaded by an artifice of this kind. It was intended to secure the debt of the United States in all cases, where the debtor was insolvent, and made a-voluntary assignment of all his property. Now what is the difference between the assignment of the whole to one person by one deed, and to several- persons by several deeds ? In both cases the whole is assigned.” In the same case, Yeates, J., said: “I go farther, and adopt the language of one of the defendant’s counsel, that no assignment can with legal propriety be deemed partial, when in the very instant of execution a general assignment is contemplated and intended, and that intention is shortly afterwards consummated. If such finesse could be practiced with success, nothing would be more easy than thus to elude the provisions of the act, and defeat the manifest intention of the legislature.

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Bluebook (online)
30 Ala. 193, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holt-chambers-v-bancroft-ala-1857.