Allen v. Smith Bros.

Woods, J., delivered the opinion of the court. The very concise and lucid opinion of the learned chancellor leaves no room for doubt as to the grounds upon which the deed of assignment was declared fraudulent and void. 1. The retention by the assignor, and the subsequent delivery to Murphey of certain rent notes given for the use of lands assigned, is one of the two grounds assigned for vacating the deed of assignment. We agree that the rents went with the lands conveyed to the assignee, and that the assignee, for the creditors of the assignor, could not be deprived of the rents by any act of the assignor, without invalidating the assignment. The rents were embraced in the term ‘ ‘ hereditaments, ’ ’ .and it was not allowable to convey them in the instrument, and, in fact, retain them for other disposition by the assignor, for that would operate hurtfully upon creditors. If we stopped [697] here, with this statement of a well-known legal principle, the decree, on this gro'und, should be upheld; but we must go further, and inquire, did the dealing with the rent notes by the assignor, as is disclosed in the record before us, deprive the as-signee of the rents, or hinder his collection of them, and, therefore, operate to the injury of the estate conveyed ? This inquiry, on the authority of our own decisions, must be answered in the negative. The conveyance of the lands by the deed of assignment carried with it as an incident, and inhering in it, the rents also, and the assignee became thereby entitled to them. The retention of the notes given for rent, and their subsequent delivery to Murphey by the assignor, cannot defeat the assignee’s right to them, and hence the action of the assignor in this particular was harmless. Hatch v. Sykes, 64 Miss., 307; Watkins v. Duvall, 69 lb., 364; Bowdre v. Sloan, lb., 369. 2. Was the debt of the Weatherbees fictitious ? Was it a debt not due by the assignor, and for which he was personally liable ? The assignor was administrator of one Sanders. The estate of his intestate was insolvent, and there had been an agreement by all the creditors to waive the formalities of a regular insolvency proceeding, and to have a decree go for distribution of the fund in the administrator’s hands; and there was, accordingly, a proper decree directing distribution ratably among the creditors of Sanders. This decree was final and conclusive, and the administrator became then personally responsible to the Weatherbees, and to all the other creditors, for their distributive shares. If execution had been issued, or proper proceedings had by the Weatherbees to enforce their claim, it would have run against the administrator’s estate, and not cle bonis tesíato?'is. The test of' personal liability is the crucial one on this particular point, and by it the-debt is shown to be, not fictitious, but real. Anderson v. Tindall, 26 Miss., 332; State v. Bowen, 45 Miss., 347. The cross appeal brings under review the action of the court [698] below in declining to hold fraudulent the several conveyances assailed by cross appellant, the Adler-G-oldman Commission Company. The controversy is largely, if not wholly, one of fact, and the enormous record, containing the voluminous evidence, has received our deliberate and repeated examination. There is much of this evidence which excites suspicion as to some of the conveyances sought to be declared fraudulent; but, on the whole case, we are unable to say the chancellor’s finding was erroneous, and that fraud, in any of the instances relied upon by counsel for cross appellant, is so satisfactorily established as to authorize us to reverse the decree on cross appeal. Afterwards, Calhoon & Green, for appellees, and Sykes & Bristow, for appellee and cross appellant, Adler-Goldman Commission Company, each filed a' suggestion of error, urging a review of the decision, on the following grounds, substantially: 1. The court should have held that the retention by Holberg of the notes which were delivered to Murphey rendered the assignment fraudulent and void. Holding otherwise is directly at war with the well-considered cases of Baum v. Pearce, and Marks v. Bradley, supra. The notes were intentionally retained, and this fact should avoid the assignment, even if it be conceded that it was not the purpose of Holberg to defraud. 2. In refusing to vacate the assignment because of the reservation and delivery to Murphey of the rent notes, if the court intended to act upon the doctrine announced in Hatch v. Sykes, 64 Miss., 307, that the right to collect the rents passed by the deed without reference to the disposition of the notes given therefor, we still urge that the evidence shows the reservation and delivery to Murphey of several mercantile notes. It is true that Murphey does not think he received these mercantile notes, but the positive testimony of Holberg himself shows the contrary. [698] On the cross appeal, there will be an affirmance of the decree below. The decree in the direct appeal will be reversed, and a decree here dismissing the case. Reversed, and decree here. In Estes v. Ghmter, 122 U. S., 450, the supreme court of the United States held that the fact that an assignor fraudulently turned over part of the assets to his wife would not avoid the assignment, because the assignee could recover them from her, and therefore he was not injured; but this doctrine is directly repudiated in JBa/imi v. Pearce, supra, and in Montgomery v. Goodbar, 69 Miss., 333. 3. Accepting the doctrine of Hatch v. Sykes, 64 Miss., 307; Watkins v. Duvall, 69 lb., and Bowclre v. Sloan, lb., 369, in its fullest extent, we still say Holberg was guilty of fraud in reserving the rent notes which he subsequently turned over to Murphey. The assignee acquired only the right to sue for use and occupation by the assignment, whereas he was entitled to the rent notes themselves; without them he would have no lien on the agricultural products, and no right to attach for the rent. Code 1880, §§ 1301, 1302; 11 Smed. & M., 153; 43 Miss., 556; Roberts v. Sims, 64 lb., 597. It cannot be held that the rent notes were worthless. They evidenced the rent contract, and with their transfer followed the essentially valuable right to attach for rent. The assignee was entitled to these notes, and to the remedy which their transfer afforded. To hold that their retention was dam/n/wm absque injuria, and therefore not fraudulent, is necessarily to approve the doctrine of Estes v. Gunter, which has been utterly repudiated by this court. 4. Granting the individual liability of Holberg for the debt of Weatherbee & Co., we insist that his individual creditors could compel satisfaction primarily out of the assets of the estate of Sanders in his hands. The administrator holds personalty, not as his own, but in trust for the heirs or creditors. 32 Miss., 107. He is absolutely presumed to have on hand the money reported by him, and the fiduciary relation as to this still exists. Anderson v. Tindall, 26 Miss., 332. When Holberg made this assignment, he is conclusively presumed to have had this trust money of Sanders’ estate in his hands. It has been held that a firm cannot, by assignment, devote firm assets to pay individual debts of the partners. Maries v. Bradley, sv/pra. Much more will an individual not be allowed to devote his individual assets to pay a debt as to which he has in his hands a separate and distinct fund. To so hold would be to permit a fraud, not only on his creditors, but on the estate of which he is administrator. 5. We have not controverted any of the findings of fact by the chancellor which this court has accepted as correct. We differ with him as to the conclusions of law only. The fact that mercantile notes, as well as rent notes, were reserved, is not inconsistent with these findings, and this fact is fully supported by the testimony. A reargument was granted, and the cause again argued by A. G. Bogle, for appellant, and M. Green, for appellees. Woods, J., delivered the opinion of the court on the rear-gument. On the original argument, little or no notice was taken of the supposed retention by the assignor of the mercantile paper which was said by him, in his deposition, to have been delivered by him to Murphey with the rent notes. The controversy was had over these rent notes, and our former opinion did .not go beyond those. On the reargument, the contention is, that the assignor retained the mercantile paper said by him to have been delivered to Murphey with the -rent notes, and the evidence relied upon in support of this contention is that of Murphey, which is to the effect that the assignor delivered him no notes other than the rent notes. We have already adopted Murphey’s statement as the true one. The case, then, stands thus: The assignor said he delivered, in one envelope, [701] the rent notes, and certain mercantile paper described by him, to Murphey; Murphey says the assignor is mistaken, in part— that he did not deliver to him any mercantile notes — and Mur-phey’s version we have accepted as correct. The mercantile notes, then, were not in the envelope delivered to Murphey, and whether they were or not was the extent of the inquiry. Mistaken in supposing he delivered these mercantile notes to Murphey, it was not sought to press the search further, and ascertain whether, as a matter of fact, the assignor then had these mercantile notes. They were not in the envelope handed to Murphey. Were they, then, in the assignor’s j)Ossession ? The evidence is silent, and, where the proofs do not show fraud, we cannot affirm its existence. We adhere to our former opinion.