75 Iowa 387 | Iowa | 1888

Reed, J.

— There was no substantial conflict in the evidence. The deed of assignment under which the intervenor claims purports to convey to him all of the personal property, rights and credits belonging to the assignor, and not exempt from execution; and it empowers him to sell and convert the same into money, and pay the same to the creditors of the assignor in proportion to the amount of their several claims. The instrument was executed on the twelfth of October, 1887, and was delivered to the assignee on the same day, and he accepted the trust. About one hour before the instrument was executed, Stewart and his wife executed to the Delaware County Bank a conveyance of a forty-acre tract of land, it being the only real estate exempt *389from execution which he then owned. He was indebted to the bank to the amount of six hundred dollars, for which it held his notes. Some time before the transaction in question, the cashier of the bank saw him, and urged him to pay the indebtedness, but he stated that he was not able to pay the amount at that time. During the conversation, however, he stated that he owned forty acres of land, which was incumbered by a mortgage for six hundred dollars, and he offered to convey the same to the bank, subject to the mortgage, in payment of the debt, and in answer to that offer the cashier stated that the bank would accept the conveyance. Stewart saw the cashier again on the eleventh of October, and inquired whether he should make the conveyance to the bank or to one of its officers, and was directed to make it to the bank. He was in failing circumstances at the time, and his creditors were pressing him for payment. When he executed the conveyance, he gave it to the attorney who prepared the deed of assignment, and requested him to deliver it to the bank, which he did about four hours after the delivery of the deed of assignment and the acceptance of the trust of the assignee. The attorney had no authority from the bank to receive or accept the deed for it, but in making the delivery he acted under the direction of Stewart. The assignee, however, was informed of the execution of the deed, and the object for which it was given, before he. accepted the trust.

1. Assignment for benefit of creditors: part of property only: validity. I. It was contended (1) that the naked promise of Stewart to convey the land to the bank, and the agreement of the cashier to accept it in satisfaction of the debt, did not create an enforceable equity in the property in favor 0f the bank; and (2) that the deed to the bank could not operate to divest Stewart of the property until its delivery, and delivery was not accomplished until the attorney surrendered it to the bank. And it was argued that, as Stewart continued to be the owner of the property when he executed the deed of assignment. *390and did not include it in that conveyance, the assignment is void. For the purposes of the case it will be admitted that Stewart was the owner of the land when he executed the assignment; that the bank had no equity in it; and that the deed of assignment conveyed his personal property only to the assignee. It follows, then, that the assignment was of but a portion of his property. But the right of a debtor, in the absence of statutory restrictions, to make a partial assignment for the benefit of creditors has always been recognized. No right or interest in the property of the debtor accrues in favor of the creditors by virtue of the fact merely that they are creditors, but he may make any disposition of it he chooses, provided, only, that such disposition be made with an honest intent, and for a lawful purpose. Tie may lawfully pay or secure one or more of his creditors to the exclusion of others, and he may convert all or any portion of his property into money for that purpose. Now, our statutes have not undertaken to restrict the debtor as to the disposition of his property for the payment or security of his debts, except in the case of a general assignment, and the single limitation there prescribed is that such assignment can be made only for the benefit of all of the creditors in proportion to the amount of their respective claims. Code, sec. 2115. The whole subject was elaborately considered in Lampson v. Arnold, 19 Iowa, 479, and it is there distinctly announced that the common-law right of an insolvent to make a partial-assignment for the benefit of creditors is in no manner affected by the statute. Under that holding the assignment in question would not be invalidated, even if the deed to the bank never became operative.

2. _: _: deed as evidence. II. Plaintiffs objected to the admission of the deed of assignment in evidence, on the ground that it did not upon its face purport to be an assignment a-^ °f Hie property of the assignor. Admitting the ground of the objection, still, as the instrument purports to convey the property in question, and prima facie is good as a partial assignment, it was admissible as evidence.

*3913. _: _: validity: instruction. III. The court directed the jury, in effect, that if the execution of the assignment and the deed to the bank was in fact but a single transaction, an^ instruments were executed by Stewart with the view of disposing of his property for the benefit of his creditors, then, as they covered all of his property, and gave a preference to the bank, the assignment was void. He also instructed that if there was a prior agreement between Mm and the bank, by which he had undertaken to convey the land to it, and such agreement was definite as to its terms and subject, and the deed was executed in pursuance of that agreement, in such sense as to be a distinct transaction from that of- the execution of the assignment, and independent of it, the assignment was not invalid. One objection urged against this latter instruction is that it failed to direct the jury as to the essentials of a valid contract. The position of counsel is that the deed conferred no fights or interest on the bank before delivery, unless it was executed in pursuance of a valid and enforceable contract previously entered into between the parties, and as delivery was not accomplished until after the execution of the assignment, it was important for the jury to determine whether there was such prior agreement. If the assignment had been general, — that is, if it had purported to convey the real estate as well as the personal property, — this position would be applicable. But, as we have seen, it purported to convey but the latter, and the question as to its validity depended, not upon whether the deed was executed in pursuance of a prior valid agreement, but upon whether that act was so connected in point of time and intention with the execution of the other instrument as to form a part of that transaction, and with it constitute a general assignment. And that is the question which the instruction submitted to the jury. In view of the character of the assignment, it was not important to inquire whether the bank acquired any interest in the property before the delivery of the deed, or not. If the assignment had been general, it is probable that it *392would not have acquired any. At least, so much is conceded. But the inquiry whether it did or not in no manner affects the question as to the real character of the assignment, which is the one upon which the case turns. That question was to be determined from the circumstances surrounding the execution of the instruments, and the motives and intentions of Stewart in executing them. These considerations dispose of the further objection urged by counsel that the evidence did not establish a valid and enforceable contract for the conveyance of the land between the bank and Stewart; also of the exception to the action of the court in refusing to give an instruction which defined, with more particularity than was done in those given, the essentials of a valid contract. The case, in its facts, is essentially different from Cole v. Dealham, 13 Iowa, 551, and Burrows v. Lehndorff, 8 Iowa, 96. The assignment in each of those cases was general, in that it purported to convey all of the assignor’s property. Creditors of his sought to defeat it on the ground that by other conveyances, executed at the same time, and constituting part of the same transaction, he gave preferences to certain of his creditors. In those cases it was important to inquire whether the debtor was under any legal obligation to secure the preferred creditors. They did not involve the question here considered, whether the debtor intended to withhold a portion ■ of his property from the assignment, and thus make it a partial assignment.

4. _: validity: evidence. IY. The court excluded certain evidence offered to prove that the assignor had withheld certain of his personal property, and had appropriated it to payment of his debt to a particular creditor. If the facts are as claimed by plaintiff, the assignee can yet recover the property, and could' be compelled to pursue it by proper proceedings in the hands of the purchaser. But they do not invalidate the assignment. Under it the title to all of the personal property of the assignor passed to the assignee, regardless of any secret intentions on the part of the former.

Affikmed.

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