14 F. Cas. 673 | U.S. Circuit Court for the District of Eastern Missouri | 1878
It is by statute (section 1 of the statute on fraudulent eonvey-anees, quoted in Re Werner [Case No. 17,416]), as construed by the supreme court of the state, the law of Missouri that a conveyance of personal property to secure creditors when the grantor, by the understanding of the parties, expressed or implied, is to remain in possession of the property, with a power of sale, is void upon a principle of public policy embodied in the state, irrespective of any question of actual and intended fraud. The rules rest, says Napton, J., upon this principle of public policy, and not because the law pronounces such a conveyance with power of disposition “conclusive of actual fraud.” State v. Tasker, 31 Mo. 445; State v. D'Oench, Id. 453.
The conveyance in the present case is free from any actual fraud. It embraces two classes of property — stock in trade of a druggist, and the fixtures of the establishment. No express power of disposition in the grant- or was reserved in the deed, but the trustees and beneficiary permitted the grantor to sell from the stock in trade in the usual manner — that is, they knew that he was doing so, and did not object thereto. But the grant- or never attempted to sell the fixtures, and claimed no right to do so. The question is whether, since the conveyance would, as to creditors, be void as to the merchandise, by reason of the power of disposition which it may be inferred it was understood should be retained by the grantor, it is therefore void as to the fixtures, which it is equally el'ear it was understood should not be sold by the grantor. It is claimed that if the instrument is void in Dart, it is for that reason necessarily void in toto. Outside of Missouri, the decisions on the point (perhaps somewhat influenced by peculiar statutory provisions) are conflicting. That such a deed, if void in part, is void altogether, is asserted in the following cases. Russell v. Winne, 37 N. Y. 591; In re Burrows [Case No. 2,204]; Horton v. Williams, 21 Minn. 187. But in the following cases the contrary is held; Barnet v. Fergus, 51 Ill. 352; In re Kahley [Case No. 7,593].
I have carefully examined the following cases, decided bj’ the supreme court of Missouri, touching this point. State v. Tasker, 31 Mo. 445; State v. D’Oench, Id. 453; and Stanley v. Bunce, 27 Mo. 269, as explained in its facts by Napton, J., in State v. Tasker, 31 Mo. 448; and Howell v. Bell, 29 Mo. 137, as also explained in State v. Tasker, 31 Mo. 449. I am entirely satisfied that these cases show that when the conveyance is not actually fraudulent, and where the power of disposition is retained as to part of the property, and as to part it is not retained, it is constructively fraudulent only as to that portion of the property as to which the power of disposition exists. In this case the mortgage was recorded, and presents no question as to the rights of creditors in cases where no record of the instrument was made, as contemplated by other sections of the stat
See In re Werner [Case No. 17,416].