Henry v. Croom

Riddick, J., (after stating' the facts.) The first contention is that the sale of the stock of goods in question was a part of a scheme for the purpose of defrauding the creditors of Croom & Bro., and that both John A. Croom and the Ball Warren Commission Company by its agent advised and participated in such fraud. But the finding of the circuit court was against this contention. The court found that the sale was made in good faith, and that the price paid was the full value of the goods. Without discussing the evidence, we need only say that in our opinion it was sufficient to support the finding of the court. Robson v. Tomlinson, 54 Ark. 229. The next contention is that this sale of the stock of goods was, in effect, an assignment for the benefit of creditors, and void for non-compliance with our statute regulating assignments. The contention on this point is that the agreement that the commission company should sell the cotton, and pay the proceeds on the debt of Croom & Bro., and that the balance due the company should be paid out of money due for purchase price of stock of goods; that this agreement, when taken in connection with the further agreement that if any balance due Croom & Bro. was left after paj7ment of the debt due the commission company, it should be paid to creditors of Croom & Bro., makes the transaction an assignment for the benefit of creditors. But with this contention we are not able to agree. The fact that the consideration of a.sale is to be applied in part to the payment of other debts than that of the vendee does not necessarily render the transaction an assignment for the benefit of creditors. A brief consideration of the facts of this case will show that this transfer of goods was not an assignment, within the meaning of our statute regulating voluntary assignments for the benefit of creditors. First, as to the cotton which Croom & Bro. directed the commission company to sell, and apply the proceeds in part payment of their indebtedness to such company: We consider it altogether immaterial whether this direction to sell the cotton was given by Croom & Bro. at the time they shipped the cotton, as the circuit court found to be the fact, or, as counsel for appellant contend, given later at the time of the sale of the stock of goods. While the evidence seems to support the finding of the court on this point, we regard it as a matter of no moment, for this direction in reference to the cotton cannot constitute an assignment, for the reason that there was never any transfer of the title to the cotton by Croom & Bro. to the commission company. An assignment is a transfer of property to a trustee to be disposed of by him to raise a fund to pay debts. In an assignment the assignor parts, not only with possession, but with the title to the property. Goodbar v. Loche, 56 Ark. 315. But in this case there was no transfer of their title to the cotton by Croom &' Bro. The cotton was held by the commission company as the cotton factor and agent of Croom &.Bro., and was sold and transferred by them as the agent of Croom & Bro. The direction to their agent to sell the cotton was not a transfer of the title to the cotton. The transfer of this cotton by Croom & Bro. was not to the Ball Warren Commission Company, but to the purchaser from such company. The title to the cotton remained in Croom & Bro. up to the time of the sale by the commission company, and could have been levied upon by the creditors of Croom & Bro., subject of course to any valid lien held by the commission company. It would be going much too far to hold that an insolvent merchant could not direct his cotton factor to sell cotton, and apply the proceeds upon his debt without making an assignment; for authority given to one as the agent of another to sell property and apply the proceeds does not constitute an assignment. Wood v. Adler-Goldman Com. Co., 59 Ark. 270; Banning v. Sibley, 3 Minn. 389; Beans v. Bullitt, 57 Pa. St. 221; Burrill on Assignments (6th Ed.), sec. 5. Second, as to the stock of goods: It was not transferred to the commission company to be held in trust and disposed of to raise a fund to pay debts, but was sold to the company for a stipulated price. It is true, the total amount to be paid was not agreed upon at the time the bill of sale was executed, but, as “that is certain which can be made certain,” the agreement to pay 60 per cent, of the invoice price of the goods was in effect the same as if the total price had been named, for it could be ascertained by calculation. The commission company did not take the goods as a trustee, but as an absolute owner by purchase. Now, if we should conclude that the agreement made by the commission company that it would apply the purchase price, first, to the payment of the amount due it, and, if any balance remained due Croom & Bro., would pay that to the other creditors- of Croom & Bro., constituted, in effect, an assignment of such balance for the benefit of creditors, that would not necessarily affect the sale of the goods. In the absence of fraud, it would be only an assignment of this surplus arising from the proceeds of the sale, and would not affect a sale made in good faith and for a valuable consideration. But the evidence in this case shows that the Ball Warren Commission Company did not hold this money in trust for the creditors of Croom & Bro., but as agent for Croom & Bro. This balance was placed to the credit of Croom & Bro. upon the books of the commission company. The fact that the company was required to pay this balance to the creditors of Croom & Bro. did not constitute an assignment of such balance to the company, but was only a direction as to the mode of payment. After this direction was given, the money still remained the property of Croom & Bro. until actually paicj out by the company, and the circuit court correctly held that the facts in proof did not show an assignment. Flask v. Tindall, 39 Ark. 571; Becker v. Rardin,, 107 Mo. 111; Green & Button Co. v. Remington, 72 Wis. 648; Johnson v. McGrew, 11 Iowa, 151; Burrill on Assignments (6th EM.), page 10, and cases cited in note 3. There were other points argued by counsel, but as they were mostly disputed questions of fact, which were settled by the findings of the circuit court, we deem it unnecessary to discuss them. Being of the opinion that, on the whole case, the judgment is right, it is affirmed. Wood, J., being absent, did not participate.