Union & Planters' Bank v. Allen

Whitfield, J"., delivered the opinion of the court. We granted at the last term a reargument, and have given the case a careful and critical re-examination. One of the learned counsel for appellee states that if it were the fact that the assignment itself did not convey land, then the former decision was correct. We fail to see that it was material, as to this point, ivhether the assignment contained only personalty, and the aiding deeds only land, or whether the assignment contained both. It is clear that the assignment and the aiding deeds of November 25, 1890, all constituted, in law, one transaction, and are, in effect, one instrument, and, this being so, it is plainly immaterial whether land was conveyed by one instrument and the personalty by another, or both were conveyed by one. 'NTh© assignment and the aiding deeds are, in law, on© instrument] and that instrument an assignment, and not a trust deed or mortgage. Another learned counsel for appellant puts his contention upon the ground that the former decision in 72 Miss., 549, was a square decision; that the composition agreement of December 20, 1890, revoked the assignment in bobo as to both realty and personalty, and is res adjudicaba of this point. This is a palpable misconception of said decision. In that case we were combating the then contention of appellant that the assignment proper, and the aiding deeds, both constituting, as stated, the assignment, were one and the same instrument with the composition agreement, evidencing an identical transaction. For the purpose of exposing the fallacy of that contention, we said arguendo, that “so far from the composition agreement effecting the same result with that sought to be accomplished by the assignmenfand deeds in aid of it, as they were originally framed; its purpose, the purpose of the composition agreement, was just the opposite, to revoke and annul it.” The exact point, and the only point, decided was that the nonassent-ing creditors, one-tenth in number, were necessary parties. — 450 — And now this sentence, quoted from the former opinion, is sought thus to be wrenched from its connection, and used, diverso intuitu, to show, not only that something was decided which not only was not decided but could not have been decided, but also to set up such alleged decision as res adjudicada. It must be obvious that there was no such decision, and, of course, there is no res adjudicate/, in the case. Still another contention most earnestly pressed now, as it was before, is that the composition agreement revoked the assignment and aiding deeds as to both personalty and realty, leaving the rights of the firm creditors provided for therein, to stand or fall by the composition agreement, and what was done under it; or, that in any case, the assignment and aiding deeds must be treated as modified by the composition agreement, and thus changed from their purpose as originally framed to the purpose declared by said composition agreement. What Avas done by the assignors, the assignee, and the creditors, under and in pursuance of the composition agreement, did revoke the assignment as to the personalty. Although the assignee did not sign the composition agreement, he did redeliver, as it provided, all the assigned personalty to the assignors. Was the assignment revoked as to the realty? The assignment and aiding deeds had been duly executed and delivered, the trust thereby created had been, by the assignee, accepted, and its discharge entered upon. The legal title to the lands was out of the grantors, and in the assignee. No reconveyance was made by him. The declaration is expressly made by the assignors, in the composition agreement, that they had been advised that the arrangement manifested by ■ it could be made effectual legally, so as to restore to them the personalty, but not the realty. That instrument further expressly declares, on its face, that “the deed of trust on the lands conveyed to the trustee by the deed of November 25, '1890, shall remain until the notes, Avith interest, are — 451 — discharged/’ etc. The assignment of December 19, 1891, declares the same purpose, referring to the lands, as heretofore assigned — that is, by the assignment of November 25, 1890, and the assignee is averred by the second amended bill to be proceeding under the assignment with the execution of the trust conferred thereby. It is true-that it is averred that the assignee ^surrendered actual possession, use, and control of all the real estate to the grantors, but it is added that this was done in accordance with said agreement of December 20, 1890, which we have seen did not provide for such return of the realty, and expressly declared that the assignors had befen advised that that could not be done, and hence the trust was to remain, etc., as “a security for the new notes to mature in six, twelve, eighteen, and twenty-four months,” and the demurrer only admits the allegation in this sense. The contention that the composition agreement revoked the assignment and aiding deeds as to the realty is therefore untenable. But it is insisted that the composition modified the assignment so as to reserve to the assignors power to sell or mortgage the lands, and that such power, coupled with an interest or not, avoids the assignment. It is, of course, elementary learning that one making a general assignment for the benefit pf his creditors, must, in good faith, de.vo-te the whole of his nonexempt property to the payment of his debts, parting absolutely with all control over the same, and must reserve no benefit to himself, and retain no power or control over the property. And unlike- a mortgage, no equity of redemption exists under such an instrument. Burrill on Assignments, secs. 6, 7. What is the clause here on which this agreement is based? This, “except that we, the grantors, through the trustee, shall have the power to sell or mortgage the lands, plantations, and city property (where the laws of states 'in which said land, etc., are situated, do not forbid such disposition of the property) which was conveyed to the trustee, the -proceeds in all cases to be applied exclusively to the payment of the notes.” — 452 — This is merely an agreement that the assignee should allow the assignors, as his agents, to negotiate, on account of their perfect knowledge of the lands, sales, or mortgages, which sales or mortgages were to be executed by the assignee who had the legal title, the money to be collected by the assignee, and paid out immediately thereupon by him to the holders of the notes, and the parenthetical clause means merely and'only that the assignee was to thus use the assignors as his agents to this end and in this way, and, further, to do this only in the states where it was legal; which last clause has the effect to strengthen the confidence in the good faith of the assignors created by other parts of this record. Whatever the effect of this last provision, however, considered by itself, it cannot make invalid the previous clause, merely constituting the assignors agents for negotiation under the control of the assignee, he alone to make title and collect or pay out the proceeds. In all this there is not a hint of fraud. Such an arrangement, that the assignors in the negotiation of sales, because of their knowledge of the effects and their value, should act as agents of the assignee, would be legal in any state. Summers v. Roos, 42 Miss., 784; Janny v. Burnes, 11 Leigh, 100. Cases cited by learned counsel contra, and those cited in Bump on Fraudulent Conveyances, 124, hold such arrangements void as against a creditor in position to assail them on the ground of fraud, when the assignors reserve to themselves the right to use the proceeds. The principle of Baum v. Pearce, 67 Miss., 700, requires a construction that will, if reasonably possible, uphold “the instrument. Was the extension of timei — conceding, for the sake of argument, that such extension can be considered as engrafted upon tlie assignment by the composition agreement — which the trustee never signed, a provision avoiding the assignment at the suit of appellant? Or was it, in the circumstances of this case, merely such reasonable delay as was “incidental and necessary to the proper execution of the trust?” Bump on Fraudulent Conveyances, p. 401. These — 453 — lands were large in amount, of greatly differing values, situated partly in cities and partly in tbe country, scattered through many states, the creditors were very numerous, located in many instances in distant states, with an indebtedness running up into the hundreds of thousands. Regard must be had to the nature and condition of the property, and to tire whole environment. Bump on Fraudulent Conveyances, pp. 401, 402. It must also be noted that the power of anticipating the maturity of these notes, paying them sooner and arresting interest, was expressly reserved, and that undoubtedly the assignee was bound, even under the composition agreement, to sell to meet each series of notes, at the respective maturities, if not then respectively paid. Clearly, therefore, there was no extension for two years as to the whole indebtedness, but extension for six, twelve, eighteen, and twenty-four months respectively. At furthest there was an extension of time for two years of only the last series of notes. We do not think this extension unreasonable in the circumstances of this case. Barkwell v. Swan, 69 Miss., 907; Bennett v. Bank, 5 Hum. (Tenn.), 612. We have considered all the cases cited by appellant. Perhaps the two most relied on are Guggenheimer v. Groeschel, 23 S. C., 274, and Spence v. Bagwell, 6 Grattan, 444, 450. In the first named case the creditors and assignee, to whom there had been delivery of all the goods assigned, reconveyed all the goods to the assignor, and the whole arrangement as originally framed was purposely vacated. It is thus wholly unlike this case on its facts. In the second case the grantor himself was to give title “to the property to be sold, and himself to collect the proceeds of sale,” a wholly different provision from the one before us as we understand and construe it. But again it is said that the provision for the payment of the debts of the house of R. H. Allen & Co., of New York, introduced a new class of debts and a new creditor. This is a plain misconception of the record, as the pleadings and exhibits — 454 — of appellant itself clearly show that the house of R. Ii. Allen & Co., of New York, was merely a branch of the house of Thomas IT. Allen & Co., of Memphis. Exhibit 5 to the amended bill recites as follows: “We propose to issue our notes for the amounts due each creditor, for the debt due by each firm in the name of Thomas H. Allen & Co., of New York,” etc. And again it says: “The firm of Thomas IT. Allen & Co., referring to the printed statement of their affairs and the statement of the affairs of their New York house, Richard II. Allen & Co., offers to their creditors,” etc. And the acceptance of the creditors recites: “We, the undersigned creditors of the firm of Thomas IT. Allen & Co., and of Richard II. Allen & Co., hereby agree to the above proposition,” which proposition, as shown, recites the fact that R. II.' Allen & Co., of New York, was the house of Thomas IT. Allen & Co., of Memphis, the latter including and owning the former. Finally, it is insisted now for the first time, after the judgment of this court on the second appeal, in the reargument now made, that the composition agreement of December 20, 1890, is a mortgage, and that there was no sufficient declaration of the new trusts under our statute of frauds, and, that even if there were such sufficient declaration of trust, it was not set out in any instrument recorded in Mississippi of which appellant had notice. Now, the whole gist of the amended bill, which is the real initiation of this present controversy, was the claim that the assignment and composition agreement were one instrument evidencing an identical transaction, and were fraudulent and void, so taken and dealt with as one. That contention was shown to be unsound in 72 Miss., 549. The second amended bill is framed on, and presents, the idea that even if the assignment, which included the aiding deeds, was valid as originally framed, yet it was wholly revoked, as to both realty and personalty, by the composition agreement. This, our opinion on this appeal, now adhered to after the — 455 — fullest consideration, showed was was unsound. And now, after all this, after the bill has been twice amended, and the case has been twice heard and determined by the chancellor and by this court, it is sought to present a wholly new and different contention, never presented by the pleadings before. The position now assumed would-make a new case, so new and so entirely outside the pleadings and any relief prayed consistent with the pleadings, that it would only be proper to present it by an original bill: It must be obvious that it is inadmissible to ask this court, "at this stage of this case, to hear and determine this appeal now, on a case never made by the pleadings, not within any relief prayed consistent with the pleadings, and never heard or determined by the chancellor. Let it be noted, too, that complainant was offered leave to file a third amended bill, and declined to do so. AVe do not desire to cut off the appellant, however, from relief, if any it has, along this last line of assault upon these instruments, and our judgment of affirmance in this ease^ therefore, is now pronounced without prejudice to such rights of appellant, if any, along that line, ás it may choose to assert in an original bill. We have given this case a most patient hearing; we find no fraudulent act, nothing that hints at fraud, in the facts set out by the bill. On the contrary, the purpose of the Allens was to devote their property honestly to the payment of their debts, so far as anything averred in the bill, twice amended, discloses. Affirmed. -■Woods, C. J., dissents.