Inman, Smith & Co. v. Schloss

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 — was 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 — erence 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 — made 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. He must not only have a view of the property, but he must assert his title to it by such acts as would render him chargeable as a trespasser, but for the protection of the process. — Abrams v. Johnson, 65 Ala. 465; Kennedy v. Mary L. C. & R. Co., 93 Ala. 495. An inventory of the property seized, for — 469 — the protection of the officer, to sustain the bona fides of the transaction, and to identify the property in case of doubt or litigation concerning it, is proper but not essential. An actual taking does not imply an actual touching-. An assertion by the officer that he levies or takes property by virtue of a writ in his possession, if the property is within his view, and power to assert immediate dominion over it, and if necessary, take it into his custody, will be deemed an actual taking of it. — Herman on Executions, § 161; Freeman on Executions, § § 260, 262, 263; Mur free on Sheriffs, § 523. It is not-necessary that the property be removed by the officer, but it must, in all cases, be put out of the control of the debtor, and the officer should assume control and keep the same in his charge, or in the charge of some one for him. His possession must not be temporary in its character, but must be continuous as long as the attachment remains in force, — so continuous, that the property cannot be removed or disturbed without his knowledge or that of his bailee in charge, otherwise, it will be regarded as abandoned. — Murfree on Sheriffs, § §261, 642; Croker on Sheriffs, § 369; Harlow on Sheriffs and Constables, § 99; 2 Freeman on Executions, § 262. At first Anew our impression Avas that an inference might be draAvn from the evidence, and that it was, therefore, a question for the jury, that the deed of assignment ivas delivered to the assignee, Schloss, prior in point of time to the levy on the goods by the sheriff, and that-, if the levy had first been made, that the officer, thereafter, abandoned the levy. But, upon a more careful examination Ave are driven to the conclusion, that that impression, as to both these propositions, Avas erroneous. The plaintiff’s evidence is direct and positive as to these issues, and leaves no doubt as to-the priority of the levy, and that there Avas no abandonment of it The evidence of claimant’s witnesses, when closely scrutinized, though not so positive, does not conflict Avith the testimony of the plaintiff’s witnesses. We do not deem it necessary to go to the length and trouble of an extended discussion of the evidence, but are content with the announcement of our conclusions. It follows, the — 470 — general charge as requested by plaintiff and refused should have been givcai. We may, therefore.', pass, as unnecessary, the consideration of other assignments of error. Reversed and remanded.