Tapp v. Williams

Wood, J., (after stating the facts). The answer of the defendants in the original suit and the proof in the case show that the instrument under which Harper, appellee, took possession of the assets was intended by its makers, the judgment debtors, as an assignment for the benefit of creditors. The proof shows that the debtors, the defendants in the original suit,"intended by the instrument they executed to Harper, and under which he took possession of the assets, to transfer their property absolutely to the trustee, Harper, for the purpose of raising a fund to pay their debts. There were no preferences, and the instrument therefore was a general assignment. The instrument itself was before the lower court, but it has not been brought into this record. We must presume therefore that the court found that it was a valid assignment. This court held in the case of Richmond v. Mississippi Mills, 52 Ark. 30, that where a debtor executed an instrument “in whatever form, or by whatsoever name, with the intention of having it operate as an assignment, and with the intention of granting the property conveyed absolutely’ to the trustee to raise a fund to pay debts, the transaction constitutes an assignment.” That doctrine makes the transaction under review here an assignment. The assignment has not been called in question in any manner authorized by the law (Kirby’s Digest § 339) J an(i, even if it had been declared void “for any cause,” it would still be treated in equity as a general assignment for the benefit of all creditors pro rata. Kirby’s Digest, § 399. See Moore v. Goodbar, 66 Ark. 16. The assignment of the debtor’s assets for the benefit of 'all the creditors must, under the statute, go to all the creditors pro rata. No one of them has the right by garnishment to subject the .trust fund to the payment of all ¡his debt to the exclusion of the debts of the others. The judgment of the circuit court dismissing the garnishment is affirmed, but without prejudice to the rights of appellants to go into a court of equity to subject the trust funds in the hands of appellee to the payment, pro rata, of their debt. Hile, C. J. dissenting.