6 Rob. 246 | La. | 1843
This is an action commenced by attachment against the Commercial and Rail Road Bank of Vicksburg, to recover the amount of certain certificates of deposit, amounting to about $6000. The attachment was levied, as it appears, by the Sheriff’s return, upon a debt due by O. B. Cobb, to the defendants, by virtue of several promissory notes held by the defendants against the garnishee, amounting to about thirty-five thousand dollars.
The counsel appointed by the court to represent the absent debtors, after making a motion to dissolve the attachment, which was overruled, answered, that no property or effects belonging to them had been attached ; that the debt formerly due by Cobb to them, was, on the-13th day of February, 1840, transferred, assigned, and delivered, for a valuable consideration to Bodley, Frazier and Robbins, together with all the other property, effects and assets, then belonging to the defendants, for the benefit of their creditors generally, and that no one creditor should have an advantage over others, and that the notes, bills of exchange, &c., due by Cobb were on that day delivered to the said trustees, of which due notice was given to said Cobb, before the institution of this suit. This plea is preceded by a general denial.
The persons above named as trustees, intervened in this suit, except Frazier, who it is alleged was re-placed by Walker, with
It is admitted of record on the part of the plaintiffs, that the assignment was executed by due authority. That Walker has been substituted for Frazier, as assignee ; that all the effects including all notes, bills, and other evidences of debt, among which were those due by Cobb, were delivered over to the assignees on the day of the assignment; that notice of the assignment was published in two newspapers in Vicksburg, and in two newspapers in New Orleans, for the space of one year after the date of the assignment ;• that the fact of the assignment was publicly spoken of in and about Vicksburg, and the surrounding country; and that Cobb resides twenty-five miles from that place, and was frequently in Vicksburg, in 1840. On the part of the defendants and intervenors, it is admitted, that the certificates of deposit were duly executed by-the proper officers of the Bank. The signatures and official character of Bibby, the Cashier, is admitted ; and that his certificate or statement, without oath, is to be received as evidence of the amount that Cobb owed the Bank, at the time of the assignment, and whether he has paid any part since, or of any thing which he may have done, or proposed in relation to the debt.
The judgment below was for the plaintiffs against the original defendants and the intervenors, and they have appealed.
The principal question which the case presents, and which has been argued in this court is, whether the assignment by the Bank to the intervenors, be valid according to the laws of the State of Mississippi, and whether it has been so notified to the garnishee
It becomes thus necessary to state the substance of the instrument, in virtue of which, the intervenors claim the property attached, as the assignees of the Bank.
It is recited in the instrument, that, whereas the embarrassed situation of the President, Directors and Company of the Commercial and Rail Road Bank of Vicksburg, and the inability of its debtors to meet their liabilities, put it out of their power to complete the Rail Road, or to pay its debts, without having time to make collections ; and whereas, the unprecedented pressure which now rests upon the community, and the utter impossibility of the corporation to collect its debts immediately, without being destructive to the best interests of its debtors, as well as of the corporation, render it necessary, (in order that justice may be done to all the creditors, and in order to complete the Rail Road, which was the great and primary object for which the charter was granted,) that an assignment of the property, debts and effects of-said corporation should, at once, be made, for the benefit of the creditors, as will most effectually promote the interests of the creditors, and protect the debtors from loss and sacrifice; and at the sanie time furnish the means to finish and complete the Rail Road, and to protect and secure to the stockholders the franchise granted by the charter. For these reasons, the President, Directors, &c., in consideration of the premises, and of five dollars in hand paid, &c., declare that they have given, granted, bargained, sold, assigned, transferred, and set over, to W. W. Frazier, Thomas E. Robbins, and William S. Bodley, and the survivor of them, all the property, real, personal, and mixed, which either in law or equity belongs to them ; to wit, its real and personal estate of every kind, or description, situate in the county of Warren, and State of Mississippi, or elsewhere, its stocks, goods, wares, merchandize, bills receivable, bonds, notes, book accounts, claims, demands, judgments, choses in action, and all its property of every kind and nature whatever, enumerated and specifically mentioned or not; and they further bargain, transfer and assign to the said assignees, all the surplus profits, hereafter arising, or which may hereafter accrue from the said Rail Road, after the time said Rail
There is a second or supplemental deed of assignment or trust, bearing the same date with the above, repeating many of its clauses and stipulations, and declaring the trustees to be the joint agents of the Bank, and such of its creditors as may become parties. The President and Directors, sell to the trustees all the slaves, &c., engaged in finishing the road, which had been expressly reserved by the first deed, and make further specific provisions for the finishing of the road ; in order to save the franchise granted by the charter. It is declared to be the main and principal object of the deed to secure to the creditors of the institution the benefit and advantages of the road, and, by completing the same,., to afford facilities for the payment of the debts of the Bank.
The validity of this assignment depends upon the law of the place where it was entered into, although intended to operate upon personal property in this State. We shall, therefore, inquire into its form and effect, only so far as it concerns the creditors in relation to debts due to the corporation by our citizens. Whatever may be thought of it, as the means of carrying on the operations of the corporation by agents and trustees, instead of acting by a board of Directors, and thereby attempting to act in a different manner from that indicated by its charter, it is only the right of the creditors of the Bank to attach the property purporting to have been assigned, which is to be examined by us. It is admitted, that the common law prevails in the State of Mississippi, and, consequently, we are to look into approved works upon that system of jurisprudence for information on this subject.
It seems to be well settled at common law, that a debtor may make a valid assignment for the benefit of his creditors, and that he may even give preferences to a certain class of them; and it is
It appears also to be settled, that the assent of creditors will be presumed, in the case of an assignment to a trustee for the benefit of all the creditors, where no release, or other condition is stipulated for, on behalf of the debtor, but the property is to be distributed among all the creditors pro rata. This assent is said to be inferred upon the general principle of law, because the trust must be for their benefit, and cannot be for their injury. 4 Mason, 206.
The assignment should also be absolute and unconditional, the assignor neither retaining a power to change the trustee, nor a control of the deed of trust. 12 Johns. Rep. 71. 11 Wendell, 202.
In the assignment or deed of trust under consideration, it is expressly declared, that the assignees or trustees are the joint agents of the Bank, and such of the creditors as may become parties ; and they are required to render semi-annual accounts to the assignors, and the .right is retained, and appears by the record to have been exercised, of substituting a new trustee in case of vacancy. The assignees are authorized to retain, out of the proceeds of the property, an enormous salary of $8000 each. It provides for the borrowing of $250,000, and subjecting their real estate to a lien for its reimbursement, and the amount to be paid out of the avails of the effects assigned; thus treating the property as if still that of the corporation, and providing for the creation of a new debt to be paid in preference, in order to complete the Rail Road, and thus save the franchise to the stockholders, and that the road itself when finished, may afford the means of paying the debts of the Bank. Thus á large fund is locked up from the pursuit of creditors ; and, indeed, it is 'set forth as the principal cause and inducement for making the assignment, and appointing trustees, that the pressure of debts put it out of the power of the corporation to complete the Rail Road, and to provide the ways and means of doing it, in preference to paying those debts out of the sale of all the property of the assignors. The creditors are told that this is done for their benefit, because all the profits of the
This view of the case renders it unnecessary to inquire into the question of notice given to the debtor.
Judgment affirmed.