| Mo. | Oct 15, 1888
On the seventeenth day of September, 1885, the plaintiffs (on behalf of themselves and the other creditors of the defendant John F. Henderson) filed in the Howard county circuit court a petition, stating that on the twenty-second day of Juné, 1885, the defendant John F. Henderson had duly executed and acknowledged the following conv eyance, to-wit:
“Know all men by these presents, that whereas, I, John F, Henderson of Howard county, in the state of Missouri, am justly indebted to the Glasgow Savings Bank, a corporation, incorporated by the laws of the state of Missouri, in the following sums and evidenced by the following notes : First note dated October 13, 1883, due four months after date for three thousand dollars, with interest from maturity at the rate of ten per cent, per annum, credited July 23, 1884, with one hundred and thirty 83-100 dollars ; second note, dated August 1, 1883, due four months after date, for four thousand dollars, with interest from' maturity, at rate of ten per cent, per annum, credited December 4, 1883,*380 with interest paid to April 7, 1884, May 18, 1885, thirty dollars, June 9, 1885, four hundred dollars; third note dated December 4; 1883, due three months after date, for five hundred dollars, with interest from maturity at eight per cent, per annum, credited December 9, 1884, twenty-five dollars, February 3, 1885, forty-five dollars, May 26, 1885, one hundred and forty dollars ; fourth note, dated October 3, 1884, due one day after date, for three hundred and forty-eight 85-100 dollars, with interest from date, at the rate of ten per cent, per annum, credited February 12, 1885, by one hundred and sixty and 40-100 dollars; fifth note, dated October 4, 1884, due one day after date, for fifteen hundred dollars, with interest from date at the rate of ten per cent, per annum, which note is also executed by William White and Joseph S. Henderson, as security. And whereas, also, A. Frank & Sons obtained a judgment against said Henderson, at June term, 1885, of Howard county circuit court, for five hundred and seventy-two 80-100 dollars, being debt and costs, interest at six per cent.; and also Walter H. Teumy & Company obtained judgment at the same term, for debt and costs, seven hundred and fourteen 86-100 . dollars ; and also John B. Farwell & Company obtained judgment at the same term, for one hundred and sixty-eight 55-100 dollars, debt and costs ; and Thomas E. Birch and George B. Harrison executed a delivery bond to the sheriff of Howard county as surety for said Henderson to secure the payment of said judgment on which execution had been issued. Now, therefore, the said John F. Henderson is desirous of securing said debts, and. of protecting and saving harmless his securities as aforesaid; therefore, I, the said John F. Henderson, do by these presents bargain, sell, transfer and deliver into the immediate possession of George B. Harrison of Howard county, in the state of Missouri, all' the stock of goods, merchandise, consisting of dry goods, clothing, hats and*381 caps, boots and shoes, notions, gents’ furnishing goods, stoves, mirrors, show-cases, writing-desks, chandeliers and lamps, being all the personal property of every kind, not attached to house, in the store-room situated on lot one, block five, city of Glasgow, known as Pythian Building, in said city of Glasgow; also two shares of Howard County Bank stock, N o. 139, and ten shares Wabash, St. Louis and Pacific, Nos. 27 and 66. The said Harrison, as trustee, takes immediate possession of said stock and takes a complete inventory of said stock of goods, after which he shall, as such trustee, proceed to sell the said stock of goods at private sale, at the best price that can be obtained, and at his discretion shall proceed to sell said stock of goods at public sale whenever he shall deem it of advantage to said creditors. After selling said stock of goods the said George B. Harrison shall, after deducting the expenses of insuring, taking care of and selling said goods, proceed to divide the proceeds between the creditors above named, and in case said securities shall pay said debts referred to, then the said securities shall be refunded the amount so paid. The said trustee may out of the proceeds pay a balance due to Teft, Weller & Company, for about three hundred dollars, to secure which they hold a chattel mortgage on part of all of said goods. And whereas, the said John P. Henderson was the owner of 152 shares of stock in a corporation known as the Pythian Hall Association in the city of Glasgow, and said notes, described as first and second, were secured by deposit of said stock as collateral, the said Henderson being the owner of the largest number of shares of said stock, therefore the said John P. Henderson transfers said stock to said trustee to be sold at public sale, giving twenty days notice in a newspaper printed in Howard county. The said Henderson and other stockholders will be compelled to borrow about twenty-five hundred dollars to repair the building, partially destroyed by the*382 tornado on the night of the twentieth of June, 1885, and the Glasgow Savings Bank will be compelled to loan said corporation sufficient to make repairs and protect the property; therefore said advances shall be paid first out of the sale of said stock of the Pythian Hall Association, and the balance appropriated to payment of the two notes for which said stock is held as collateral ; also pay Howard county and Wabash stock, on notes for which it was collateral. It being the object and intention of this deed to convey to said trustee all his interest in said Pythian Building, situated on lot one, block five, in the city of Glasgow. The said Henderson also conveys to said trustee all notes and accounts due him for goods sold, which said trustee shall inventory when he takes account of stock. The said Geo. B. Harrison, having accounted for all the above property, and discharging all of said debts, if any sum shall remain over, shall pay over the excess to the said John F. Henderson, or his legal representative. And the said Harrison accepted said trust, agreeing to administer the same to the best of his ability.
“In witness whereof the said parties have hereto set their hands and seals, this. twenty-second day of June, A. D. 1885.
“ J. P. Henderson, (Seal)
“Geo. B. Harrison, (Seal).”
That said conveyance was duly acknowledged, and was, on the twenty-third of June, 1885, filed for record in the office of the recorder of Howard county, Mo.; that the legal effect of said conveyance was an immediate and absolute appropriation of said property and effects of the said Henderson to the payment of said debts therein recited, and was and is a voluntary deed of assignment for the benefit of creditors,' and although made for the sole benefit of the creditors therein named, inures, under and by virtue of the provisions of the statutes of the state of Missouri, to the benefit of all
All the defendants answered, denying the allegations of the petition.
On the trial the plaintiffs introduced the foregoing deed in evidence and the following agreed .statement of facts: “ That the defendant John F. Henderson, in the conveyance to George B. Harrison, referred to in the pleadings, conveyed to said Harrison all of the property belonging to said Henderson at the date of said conveyance, except his homestead valued at about two thous- and dollars, which was encumbered by a deed of trust securing a debt of some two thousand dollars, which was at the time unpaid, and except his household furniture and a horse and buggy ; that plaintiffs, at the time of said conveyance, were creditors of Henderson, and that the facts stated in the separate answer of Birch and Harrison, in relation to the levy by the sheriff of Howard county, and the execution of the delivery bonds by the securities for defendant Henderson are true as therein stated.”
The court dismissed the bill and the plaintiffs appeal. The bona fides of this transaction is not questioned. Whether the instrument be an assignment for the benefit of creditors, as contended for on the one side, or a deed of trust in the nature of a mortgage, as contended for on the other, it is a valid conveyance, to the enforcement of which the courts, if need be, will
The distinction between the nature of these trusts is indicated in a general way by the statute. In regard to assignments, the form of expression is: “Every voluntary assignment * * * made by a debtor to any person in trust for his creditors.” R. S. sec. 354. In regard to trusts in the nature of a mortgage, it is “in any deed of trust to secure the payment of a debt or other liabilty.” R. S. sec. 3929. In Crow v. Beardsley, supra, quoting the language of Bartley, J., in Hoffman v. Mackall, 5 Ohio St. 124" court="Ohio" date_filed="1855-12-15" href="https://app.midpage.ai/document/hoffman-burneston--co-v-mackall-6752172?utm_source=webapp" opinion_id="6752172">5 Ohio St. 124, it is said : “The distinction is that an assignment ‘ is a conveyance to a trustee for the purpose of raising funds to pay a debt, while a deed of trust in the nature of a mortgage is a conveyance in trust for the purpose of securing a debt subject to a condition of defeasance.’ ” The learned judge in the same opinion (5 Ohio St. 130) makes the distinction in this language : £ £ There is a manifest and well-settled distinction between an unconditional deed of trust and a mortgage or deed of trust in the nature of a mortgage. The former is an absolute and indefeasible conveyance of the subject-matter thereof, for the purpose expressed, whereas the latter is conditional and defeasible.” Burrill, in his work on Assignments, section 6, says: “A mortgage■ resembles an assignment more closely in the leading features of being a security or provision for debt and involving a resulting trust to the grantor on a certain contingency.” In connection
A careful examination of the authorities to which we have been cited by counsel in this case, and of many others, confirms the correctness of this radical distinction, and satisfies us that it furnishes the true test by which the nature of the instrument ought to be determined. The usual and ordinary mode by which this equitable interest or right of redemption is disclosed is by a clause of defeasance in the instrument of conveyance.
The assignment law of Missouri is not in letter or spirit a bankrupt or insolvent debtor’s act. A debtor, whether solvent or insolvent, may, in good faith, sell, deliver in payment, mortgage or pledge the whole or any part of his property for the benefit of one or more of his creditors, to the exclusion of others, even though such transfer may have the effect of delaying them in the collection of their debts. Its terms in no way qualify the rule by which the character of this instrument is to be determined. Reading the instrument, then, as a whole, in the light of the circumstances under which it was executed, was it intended as a security, or as an absolute unconditional conveyance, in praesenti, to the grantee of all the grantor’s interest in the property, both
By its recitals, the instrument purports to be a deed of trust in the nature of a mortgage, but its real character cannot be thereby concluded. That must finally be determined by the effect of the operation of its terms upon the property in its situation at the time of the execution of the deed. The property conveyed consisted of the grantor’s stock of goods, his notes and accounts, one hundred and fifty-two shares of stock in the Hall Association, two shares of bank stock and ten shares of railroad stock. The stock of goods was encumbered by the chattel mortgage and the execution liens for the judgment debts set out in the deed. The shares of stock were all pledged to the bank as collateral for the debts due it, recited in the deed. The creditors secured by
The circuit court in effect so held, by dismissing plaintiff’s bill, and its ju dgment is affirmed.