78 F. 21 | 5th Cir. | 1896
(after stating the facts as above). Appellants claim there was error on the part of the circuit court in the following particulars:
“(1) The court erred in not construing the deed of trust and the deed of assignment as one instrument. (2) The court erred in not holding the instrument, thus construed, fraudulent and void, both in law and In fact, (o) The court erred in not holding the deed of trust fraudulent and void because it appeared that at a time when A. Tj. Crow, the merchant debtor, defendant, was insolvent, he Stipulated for the retention of the greater portion of his assets for a period longer than, by the ordinary process of law, plaintiffs could have made their debt on execution. (4) The court erred in holding that the deed of trust was valid, when taken in connection with the bill of sale of corn and other properly, because it affirmatively appeared that a large part of the property to be retained was consumable by its use. (5) The court erred because the proof was not sufficient to justify or sustain the decree.”
The first and second specifications of error may be disposed of together. Whether two instruments should, in a given case, be held as one, and construed together, depends upon the nature of the transaction, the relation that the one bears to the other, the time of, and circumstances attending, their execution, and, as applied to deeds of trust and assignments executed pursuant to the statutes of Mississippi, whether the one was made in support of the other, and had the taint of actual or constructive fraud. Employing the language of the court in Sells v. Commission Co., it is said:
“In Mayer v. McRae, this court held that ‘where one makes an assignment of part of his estate for the benefit of creditors, intending at the time to convey the remainder of his estate to another creditor in payment of his debt to such 'other, tlie assignment and conveyance do not constitute a general assignment, under chapter 8 of the Code; nor is the assignment, alone, such general,assignment,*24 to be dealt with under the Code provisions.’ We approve and adhere to the principle announced in this decision. All these matters must he governed by the statutes, jurisprudence, and policy of the state where the acts are done; and here, wherever two or more instruments are held as one, it has been-where one was executed in support of another, and had the taint of actual or constructive fraud.” 72 Miss. 606, 17 South. 238.
The case of Mayer v. McRae, cited above, will be found reported in 16 South. 875.
Whether the deed of trust to Andrews, trustee, was made in support of the assignment executed by Orow to Armstrong for the benefit of Crow’s creditors, and whether the transaction bears the taint of fraud, are questions of fact, which could only be developed by proof aliunde the instruments themselves. And, owing to the manner in which they were presented at the hearing, the circuit court was clearly warranted in considering the two deeds as separate and distinct instruments. The bill of complaint does not waive an answer under oath. There were two joint and several answers,— one by Crow and Armstrong, and the other by Andrews and the Ryan Grocery Company. Both answers were duly sworn to, — the first by Grow and Armstrong, and the second by Andrews and T. R. Waring; the last named, a member of the Ryan Grocery Company. The answers denied specifically and in detail the charges of fraud and collusion contained in the bill, and set out circumstantially the facts in reference to the execution of both instruments. It is averred that the debt due by Crow to the Ryan Grocery Company was a valid, subsisting indebtedness on the 30th day of November, 1891, the date of the execution of the two instruments, no part of which was fictitious, and that the trust deed and transfer of divers claims against tenants were made in good faith to secure the same. As to the 500 bushels of corn alleged in the bill to have been delivered to the grocery company in pursuance of a pretended sale, the answers aver that it was sold by Crow in good faith to the grocery company at 50 cents per bushel, and the indebtedness of Crow was thereby extinguished, to the extent of $250. It is claimed in the bill that:
“The bill of sale, the trust deed, aad transfer of the collateral, the execution of the deed of assignment, — each and every one of these acts and transfers,— were, as to A. L. Crow, in fact fraudulent, and the conveyances void as against complainant and the other creditors of the said A. h. Crow; that the said Andrews and Armstrong and the Ryan Grocery Company each had notice of the fraudulent character of the trust deed, of the bill of sale, of the transfer of the collateral, of the deed of assignment.”
Replying to this charge of knowledge on the part of Andrews and the grocery company as to the character of the assignment, it is averred in their answer that:
“They were not parties to it, had nothing to do with its execution, and the same was an independent transaction, and, so far as these defendants are concerned and informed, had no connection with the trust deed and agreements made with these defendants, and they are in no manner to be prejudiced in their rights by reason of the general assignment made to R. L. Armstrong; and the defendants positively deny having any knowledge as to the terms of the said assignment made to said R. L. Armstrong at the time when said trust deed was executed and made on the 30th of November, 1891; and they deny having any knowledge of any fraudulent-intent or purpose upon the part of said Crow.”
“If the crops to be produced are, -with the existing property, to be devoted to the payment of the secured debts, it has not been supposed such a stipulation is a reservation of a benefit to the debtor, 'though thereby the residue, -which must revert to him, may be increased.” Trust Co. v. Foster, 58 Ala. 514; Estes v. Gunter, 122 U. S. 450, 7 Sup. Ct. 1275.
“In the case of Barkwell v. Swan, 69 Miss. 907, 13 South. 809, the doctrine contended for by the learned counsel for appellant, and found in the cases referred to in [Henderson v. Downing] 24 Miss. 106, and [Bank v. Douglass] 11 Smedess & M. 469, was declared to be modified by subsequent statutes, which now permit a sale of the grantors equity of redemption in the mortgaged property. If Bell, in this case, sought to protect his estate from attacks of creditors by conveying it, prodigally and excessively, to secure preferred creditors, and by giving himself undue extension of time for payment of the secured debt, there was and is nolhing which precludes Ms general creditors from proceeding to sell his equity of redemption to satisfy their demands.” 13 South. 813.
The third assignment is therefore not well taken.
The fourth specification of error, when considered in connection with the facts of this case, is without substantial merit; and we content ourselves with a reference to Hooker v. Sutcliff, 71 Miss. 792, 15 South. 140, as decisive of (ho question.
What we have said in reference to the first and second assignments applies with equal force to the fifth, and it requires no further consideration.
After a careful examination of all questions raised by appellants, our conclusion is that the deed of trust is a valid instrument, and, hence, that the circuit court properly dismissed their bill. There, however, appears in the record a manifest error, which, although unassigned (rule 11 of this court, 11 C. C. A. cii., 47 Red. vi.), will necessitate a reversal of the case. The conclusion of the decree orders the issuance of execution in favor of the Ryan Grocery Company against appellants “for the sum of two hundred and fifty ($250) dollars, the same being the value of said 500 bushels of corn used by and fed to said live stock levied upon under said attachment.” The pleadings involve no issue upon which the judgment against appellants for §250 can stand. The Ryan Grocery Company filed no cross bill praying affirmative relief, and the only prayer of its answer is “to be hence dismissed with costs.” It may also be said that there was nothing in the proofs which could even remotely sustain a moneyed judgment such as was rendered in this case. “It is hardly necessary to repeat,” says the supreme court, “the axioms in the equity law of procedure, that the allegations and proofs must agree, that the court can consider only what is put in Issue by the plea dings, that averments with out proofs and proofs without averments are alike unavailing, and that the decree must conform to the scope and object of the prayer, and cannot go beyond them. Certainly, without the aid of a cross bill, the court was not authorized to decree against the complainants the opposite of the relief which they sought by their bills.” Railroad v. Bradleys, 10 Wall. 302. In Chapin v. Walker, 6 Fed. 795, 796, Judge