97 Tenn. 603 | Tenn. | 1896
The bill in this case was filed by creditors of the Divine Grocery Company, to set aside several conveyances, and subject property conveyed for the satisfaction of complainants’ debts. Two of the conveyances were held by the Chancellor to have been valid, and from this part of the decree there was no appeal; the other two were declared to be void as in violation' of the assignment Act of 1895. Defendants appealed and assigned errors. The Act is contained in Chapter 128 of the Acts of the General Assembly of that session. It was approved May 11, and took effect from the date of its passage, and is found on pages 258, 259, 260, of the Acts of 1895. It is entitled, “An
If this Act be valid, then certain preferences were given, which, according to its provisions, are not permissible, and the decree of the Chancellor, arid of the Court of Chancery Appeals affirming this decree, are correct. If it be invalid, there is no objection to the preferences contained in these deeds; and the question, therefore, to be determined, is, whether or not the Act is constitutional.
The first objection urged is that its title is not broad enough to cover the purposes of the Act, and that the Act embraces more than one subject, and it therefore violates Art. II., Sec. 17, of the Constitution of the State, which, among other things, provides that ‘ ‘ no bill shall become a law which
It will be seen that it is, in general and specific terms, to prevent debtors from making preferences among creditors by assignment, deeds of trust, mortgages, deeds, sale, pledge, or by any other form or transfer, or conveyance, or by confession of judgment. It is general, absolute, sweeping, and unconditional to prohibit any preference without limitation or exception, yet the eighth section of this Act provides as follows: “That the provision of the Act shall not apply to any assignment, mortgage, confession of judgment, or other conveyance, made to pay or secure an indebtedness contracted prior to the passage of this Act.” Here it is obvious that, under a title of one subject forbidding a preference, an effort is made to legislate by limitation that permits a preference, and is manifestly not in accord
Again, the title of the Act is to prevent preferences, among other things, ‘ ‘ by confession of j udgment” [only], so far as Court proceedings are referred to. The third section provides that any confession of a judgment by debtors, or permitting judgment to be taken by default, fixing a lien or incumbrance on any of the debtor’s property, estate, or assets, and made for the purpose of giving preference to one or more creditors, or that would so result, shall be held illegal and void, and such preferred creditor or creditors shall only be permitted to share ratably in a distribution of such debtor’s assets. Plere it is again obvious that a provision has been inserted in the Act of a most vital and important character — and without which it is presumed that Act would not have been passed — upon a subject not within the title of the Act. It is clear that this effort to legislate against the result of a judgment by default, is entirely beyond the legislation contemplated in the title as to the effect of a judgment by confession. They are not synonymous terms, and the express language of
The second section of the Act provides that whenever any assignment, deed of trust, mortgage, deed, sale, or pledge, or any other conveyance or transfer of a part or portion of a debtor’s property, estate, or assets, is made for the purpose of preferring one or more creditors, or would have that effect, it shall be illegal and void, and all of such property, estate, or assets shall be divided pro rata among all of the creditors of said debtor. It is clear that this absolutely prevents the transfer, sale, pledge, or mortgage of all or any part of the property of any debtor, however solvent or insolvent, for the payment of any debt, however large or small, and that it denies him the privilege and power (denies to all solvent debtors, with any amount of property, as well as to all insolvent debtors), to pay all or any part of his indebtedness, large or small, without subjecting him to suit at the instance of other creditors, according to Sec. 5 of the Act, to sequester and appropriate his property and- throw him into involuntary bankruptcy, and ruin his business and reputation as a consequence. It must be observed that this Act has nothing to do with the question of the solvency or the insolvency of debtors, either in its caption or its general provisions. It is not an Act to prevent insolvent debtors from making preferences; it is an Act to prohibit all
It is, and correctly, insisted that while this Act does not deprive him absolutely of his property, it takes away from him that element of its value which consists in the right to use and legitimately dispose of it; and here it must not be forgotten that we are not dealing with the question of an insolvent debtor conveying his property, or any part of it, or of a solvent debtor conveying his property,
It was decided in the case of the Stratton Claimants v. Morris Claimants, 5 Pick., 497, that when the Constitution of this State was framed, the light to own, to hold, to enjoy, to alien, to devise, and to transmit property by inheritance was enjoyed to the fullest extent and perfection of absolute right, and one of the objects of the Constitution was to protect and preserve this right. To take from property its chief element of value, and to deny to the citizen the right to use and transfer it, in any proper and legitimate method, is as much depriving him of his property as if the property itself were taken.
Of course we need not repeat again the meaning of the phrase in this connection, “the law of the land;” it does not need to be said that the deprivation provided against, is not merely that which might result from an Act of the Legislature under
These general provisions in respect to the right to own property equally protect the right to use, enjoy, exchange, and transmit it, as held in the Morris case before referred to, and neither can be taken from the citizen by the arbitrary enactment of the Legislature. That the citizen can be restrained from any improper use or improper disposition of his property is not doubted, and is, of course, not asserted here, but such is not the effect of this Act, or if the purpose of the legislators was to accomplish this result, they have attempted it by means of legislation beyond their power to adopt. It was probably not within the contemplation of the legislators in this sweeping way to deprive the solvent debtor of his power to pay debts with property, or to compel him, under such severe penalties, to always pay cash.
But we can judge of the purpose only by the terms employed in the Act. The positive provisions of this Act will bear no other construction than
It results, therefore, that the decree of the Court of Chancery Appeals must be reversed, and, as to these conveyances, be dismissed with costs.