Lowenstein v. J. T. Bew & Co.

Cooper, J., delivered the opinion of the court. The controlling question in this case is whether an insolvent merchant residing in this state subjects himself to attachment by shipping to his commission merchant in another state cotton, to be there sold, and the proceeds applied to the payment of a debt due to such commission merchant, the debt exceeding the value of the cotton so shipped. The circuit judge instructed the jury that such circumstances were not ground for attachment under the second clause of § 2415 of the code, which subjects to attachment one who “ has removed or is about to remove himself or his property out of this state,” and we think correctly so ruled. A literal construction of the statute would, it is clear, subject one to attachment under the circumstances named; but it was settled at an early day in this state that the “ removal” of person or property within the meaning of the law must be such as to impair or jeopardize the remedy of creditors for the collection of their debts. It is, of course, impossible to specify in advance exactly what facts would place a defendant within or without the operation of the statute, but the principle which controls is distinct and simple. The difficulty is the common one of applying it to the facts. An examination of the decisions in this state and some of those elsewhere will illustrate the uniformity with which the courts have adhered to the principle of protecting the rights of creditors, and limited the language of statutes to this purpose and end. In Montague v. Gaddis, 37 Miss. 453, the debtor was about to remove a considerable portion of his property from the state, but retained in it ample property subject to execution for the payment of all his debts. The trial court held that he was not subject to attachment, and examining the subject, the court said: “ The object of the statute allowing attachments for debts is to afford the creditor a security for his [276] debt in case the debtor is about to remove his property out of this state, so as to deprive the creditor of the collection of his debt in this state. The principle upon which the statute proceeds is the danger of loss of the debt by the removal of the defendant’s property ; and this reason fails, and the remedy provided by the statute plainly does not apply, when the debtor is removing a part of his property, but does not remove or intend to remove another part of it, subject to the payment of the debt, amply sufficient to satisfy it, and accessible to the creditor’s execution, and such portion of his property remains in his .possession openly subject to execution. For when property to such an amount, and so situated, remains in the possession of the debtor, and is not about to be removed from the state, it could not be justly said that the creditor’s debt would be in danger of being lost by the removal of another part of the debtor’s property from the state.” In Myers v. Farrell, 47 Miss. 282, and Pickard v. Samuels, 64 Ib. 822, the principle of Montague v. Gaddis is reaffirmed. In Stephenson v. Sloan, 65 Miss. 407, there was a delivery by the debtor of certain cotton to the creditor, to be by him shipped out of the state and sold, and out of the proceeds of sale to pay the debt due, the balance to be returned to the debtor. The debt there was less than the value of the cotton; and since the transaction was in effect to send the property beyond the state to be converted into money, a part of which was to return to the debtor, it was held ground for attachment. Haber v. Nassitts, 12 Fla. 589, rested upon facts almost identical with Montague v. Gaddis, and the same conclusion was reached as in that case. Mach v. McDaniel, 2 McCrary, 198, was a case in which an insolvent merchant converted his property into cotton, and shipped the same out of the state for sale. This was held ground for attachment. That case, it will be seen, is similar in its facts to Stephenson v. Sloan, the controlling facts in each being that the sending of the cotton beyond the state was but a step in the process of converting it into money to be returned to the debtor, whereby it would be withdrawn from seizure under execution. We canirot yield our assent to the suggestions of counsel that, since it is lawful for an insolvent debtor to convert his property into money in this state in the [277] usual course of trade, and without a fraudulent purpose, he may also, in like usual course of business, remove it beyond the state, to be there converted into money to be returned to bim in this state. The statute regulating attachment is materially different in respect to the two transactions. A debtor, though insolvent, may lawfully convert his property into money or evidences of debt in this state, unless his intent in so doing is to place it beyond the reach of creditors. It is only the fraudulent conversion of property into money in the state that subjects the debtor to attachment. On the other hand, the statute expressly declares that the removal of property from the state is ground of attachment. It is not necessary that the removal shall be with a fraudulent purpose, for the mere removal either withdraws the property from subjection to the claims of creditors, or imposes on them the necessity of going without the state to subject it. It cannot be permitted a man to do rvhat the law forbids to be done, because, either of a course of business or of the inconveniences which may result from a conformity to law. But, as was forcibly said by Caldwell, J., in Mack v. McDaniel, 2 McCrary, 198, it does not lie with an insolvent to claim the benefit of a course of business applicable to solvent merchants. If insolvent merchants are accustomed to send their cotton out of this state to be converted into money to be thereafter returned to or controlled by them, it is a course of business that subjects each of them to attachment. A multitude of precedent wrongs cannot justify another and later one. But, as we have said, it is not every removal of property from the state that will warrant an attachment. A temporary removal of property in good faith, really and apparently, a removal of exempt property, or the removal of a portion of one’s estate, leaving in the state ample visible property to answer the demands of all creditors, while within the letter of the statute, would not be covered by it, for the reason given in Montague v. Gaddis, that it applies only to such removals as impose danger of loss to creditors. To subject a debtor to attachment under t he circumstances of the present case, would be to impose a penalty upon him for doing what the law approves. The cotton shipped by the defendants was of far less value than [278] the debt it was consigned to pay. No creditor could by possibility be injured by the fact that it was to be sold beyond the state, and its proceeds there applied to debts equally binding upon the debtors as were those of other creditors. If the shipments had been for the purpose of conversion into money to be returned to the debtors, thereby putting it within their power to pay it to creditors or to convert it to their own use, there would have been danger of loss to creditors, as in Stephenson v. Sloan, and this danger of loss would have-brought the transaction within the condemnation of the statute. In the absence of such conditions, the principle announced in Montague v. Gaddis, 37 Miss. 453, controls, and the court below was correct in so ruling. "We consider it unnecessary to say more in reference to the other errors assigned than that we have considered them and find nothing of error therein. The judgment is affirmed.