Inman, Smith & Co. v. Schloss

122 Ala. 461
CourtSupreme Court of Alabama
DecidedNovember 15, 1898
StatusPublished
Cited by5 cases

This text of 122 Ala. 461 (Inman, Smith & Co. v. Schloss) 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
Inman, Smith & Co. v. Schloss, 122 Ala. 461 (Ala. 1898).

Opinion

HARALSON, J.

— 1. One of the questions in the case was, whether or not an alleged levy by the sheriff on the goods in question, under a writ of attachment sued out by appellants against the defendant in attachment, one J. Oppenheimer, was prior and superior to a deed of assignment executed by the defendant at or about the same time of the alleged levy, conveying to the claimant, II. Scliloss, as trustee, the same goods for the benefit of specified creditors of said defendant. It is a question of competition for superiority betAveen the attaching creditors, and the assignee in trust of said goods. The plaintiffs in attachment sought to show, from what occurred at the time, that the levy was complete, and that the goods Avere in the possession of the sheriff, before the said deed of assignment was executed; and the claimant, that said deed of assignment Avas executed and delivered by the defendant to said trustee, before the alleged levy [466]*466was made. The two were so nearly coincident, that it became a question of proof as to which was prior in point of time. The plaintiffs introduced evidence tending to show that the goods, after the alleged levy, were left by the deputy, — who was then asserting his possession and right of possession, by virtue of his levy, — with the assignee, Schloss, until the. next day, as the agent of the officer; a fact the claimant denied and introduced evidence tending to disprove. After the examination in chief b3r plaintiff's of their witness, O. E. Cory, touching what occurred at the time, the claimant, on cross-examination, asked him: “Did we not deny, on or about the time the levy was made, that said levy was a valid one?” The court allowed this question, against the objection of plaintiffs, that it called for illegal and irrelevant evidence. The answer was, “You, S. H. Dent, Jr., did, but Schloss and Oppenheimer did not.” Dent, as was shown, was then representing Schloss and Oppenheimer as their attorney. There was no error in allowing said question and its answer. It called for a part of the res gestae of the transaction, competent to be shown for the proper determination of the question of fact at issue. It tended to show, that the trustee made no sucli agreement as that sought to be proved, — to hold the goods after an alleged levy as the bailee of the officer making it.

2. In the absence of statutory restrictions, the right of a debtor to execute a conveyance or assignment for the benefit of creditors, giving preference to one or more of his creditors over others, and which amounts to an absolute exclusion, even of the non-preferred creditors, is universally recognized. This power, says Mr. Burrell, has always been recognized and approved in the fullest manner, both by the State and Federal courts, as well as by most American jurists. And the right extended to general as well as to partial assignments to a trustee for the benefit of the debtor’s creditors with preferences, and by insolvents as well as by those.who were solvent. Burrell on Assignments, § § 13,128. It was said by this court in Perry Ins. & T. Co. v. Foster, 58 Ala. 502, 513 : “It is conclusively settled, that a debtor in failing circumstances, or actually insolvent, has the right of pref[467]*467erence among his creditors. He may assign his property for the payment or security of one to the exclusion of all others. Prior to the Code, the only limitation on this right of preference was, that the property transferred should be devoted, absolutely and unconditionally, to the payment of the preferred debts, without reservation to the debtor of any personal benefit. The whole or a part of his property could be assigned and appropriated to his creditors in equal or unequal proportions.”— Shealy v. Edwards, 75 Ala. 418; Crawford v. Kirksey, 50 Ala. 590. Bee other authorities to the same effect, collated in 1 Brick. Dig. 128, § 75. The only statutory limitation on this right, is, that in cases of general assignments, conveyances creating preferences are converted into a security for the equal benefit of all the debtor’s creditors. — Dodo, §2158 ( 737); Gay v. Strickland, 112 Ala. 567. But, as we have also held, this statute was intended to operate upon conveyances or transfers of all the defendant’s property for the security of his creditors, as distinguished from conveyances or transfers of parts of it for that purpose. Buch partial assignments are not within the operation of the statute, except when executed, other and successive transfers or conveyances are contemplated and afterwards executed, covering all the debtor’s property, in which (went, they will be construed as forming a general assignment, upon which the statute will operate. Partial assignments, stand, therefore, untouched by the provisions of the Code on that subject.— Hall v. Bancroft, 30 Ala. 193; Stetson v. Miller, 36 Ala. 642; Danner v. Brewer, 69 Ala. 191, 200; Bell v. Goetter, 106 Ala. 462, 470.

As we have, seen, this privilege is not taken from an insolvent, and the mere fact of insolvency of the assignor, and that his failing condition was known to the assignee and beneficiaries under the deed, does not, of itself, make the deed fraudulent under another statute, declaring all conveyances or assignments in writing or otherwise of any estate or interest in real or personal property, made, with the intent to hinder, delay or defraud creditors, to be void. — Code, § 2156 (1735). But assignments, whether general or partial, are void when [468]*468made with the intent denounced by .this statute, and only then. Although the effect of an assignment is to disappoint, hinder and delay other creditors in resorting to the property conveyed for the satisfaction or security of their debts, it will not, on that account alone, be held to have been executed with the intent to hinder, delay and defraud such creditors. — Young v. Dumas, 39 Ala. 60; Marshall v. Croom, 60 Ala. 121; Warren v. Jones, 68 Ala. 449; Shealy v. Edwards, 75 Ala. 412; Truss v. Davidson, 90 Ala. 359; Ellison v. Moses, 95 Ala. 221.

In the case in hand, the assignor in the deed of partial assignment, parted absolutely with the property assigned, reserved no possible benefit to himself, imposed no burdens on the creditors, and required the assignor to sell or dispose of the property conveyed with all convenient and reasonable diligence, either at public or private sale at the best obtainable prices, and apply the proceeds to the debts of the creditors mentioned, if sufficient therefor, and ratably, if not, and if more than sufficient to pay them, then to pay the balance to all. other creditors of the assignor in proportion to the amount of their respective claims. It was also shown, that the debts mentioned in the deed as owing by the assignor were valid and bona fide, arid were in amount larger than the value of the goods assigned.

It is settled in this State, that the assent of creditors will be presumed to a deed of assignment, which appropriates the property conveyed by it, absolutely and unconditionally to the payment of their debts, — the instrument being free from fraud or illegality, and containing nothing which can be construed as prejudicial to their rights.- — Truss v. Davidson, 90 Ala. 359; 1 Brick. Dig., 129, § § 87, 89; Halsey v. Connell, 111 Ala. 221.

3. To constitute the levy of an attachment on personal property, as we have repeatedly held, the officer must assume dominion over it.

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Bluebook (online)
122 Ala. 461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/inman-smith-co-v-schloss-ala-1898.