Penzel Co. v. Jett

Cockrill, C. J. ^ when mortgage construed .mente assign" It is contended that because there is a defeasance clause and no evidence dehors the instrument to control its meeting, it must be construed to be a mortgage, and cannot be declared an assignment for the benefit of creditors. But to ascertain whether the parties intended the instrument as a security for debts, or as an absolute appropriation of the property described to raise a fund to pay the debts, all its provisions must be read together. If, when viewed as a whole, the intent of the parties is found to be the former, the instrument must be declared a mortgage ; if the latter, an assignment. Robson v. Tomlinson, ante p. 229, and cases cited. It provides for the immediate surrender of the possession of the property described to a trustee for numerous creditors, with directions to proceed to sell it at private sale without delay, and to pay the debts, whether mature or not, in the order enumerated, as fast as funds could be realized from the sale. These are the main provisions of the instrument, and it is apparent from them that the appropriation of the property to raise a fund to pay debts is its primary object. It is then an assignment, unless the defeasance clause converts it into a mortgage. The defeasance in a mortgage rests upon a future contingency, as after so many days, or when the debt matures. But here there is an immediate appropriation of the property without any contingency. It may be said that the intention was to reserve the right to redeem at any time before the goods were sold. That right exists in every assignment for the benefit of creditors, although not expressly reserved. The debtor always has the right to resume control of the assigned property, upon paying the debts and remunerating the assignee, for the trust is then fully executed, and no one can complain. An express reservation of a right which the law implies does not change the legal effect of the instrument. It remains then an assignment for the benefit of •creditors, and is void for non-compliance with the statute. The case is practically controlled by the decision in Box v. Goodbar, ante p 6. Reverse the judgment and remand the cause with instructions to sustain the attachment, and for such further proceedings as may be necessary to subject the property to the payment of the appellant’s judgment.