59 Miss. 99 | Miss. | 1881
delivered the opinion of the court.
The Circuit Court instructed the jury that the deed of assignment was void on its face. The several provisions of the instrument, which, it is said, make that instruction proper, are: 1. The direction that the trustee “ shall sell and dispose of in due course of trade said goods, wares, and merchandise at discretion, or in lots, or at auction, if deemed most advisable by him for the speedy determination of the duties herein imposed, consistent with all creditors’ interests.” 2. “ The said Dancy (trustee) shall have power (in the interest of the creditors herein named, at his reasonable discretion) to make such small purchases of goods as will the better enable him to sell the stock on hand to the best advantage of the creditors.” 3. “ In the exercise of the duties imposed upon him by the provisions of this deed, the said trustee shall have the power and he is hereby directed to pay all such reasonable counsel fees as are just and proper against the grantors herein in the matter of this conveyance, and concerning the matter involved in this assignment.”
Our interpretation of the first of the several provisions objected to is, that it empowers the trustee to sell the goods by retail, or in lots, or at auction, as he may consider advisable. It is the mere expression of what the trustee could do if the conveyance were silent in this respect. It is not an attempt to provide for the continuance of the business of the grantors as they had carried it on. The “ due course of trade ” may be fairly construed as having reference to the mode of selling by parcels instead of by “lots.” We- find no fault with this provision.
The third clause of the deed, as given above, is ambiguous, and of doubtful interpretation. It may have been designed to
This brings us to consider the legal effect of that clause in the conveyance which empowers the trustee “ to make such small purchases of goods as will the better enable him to sell the stock on hand to the best advantage of the creditors.” Any contrivance of the debtor to have his business carried on by another for the purpose of making profit out of it, while creditors are postponed in the realization of their demands out of the property assigned, is condemned by law, except in certain states of case exceptional in their character, and where the continuation of a business is necessary to make articles salable, as, for instance, in case of a manufacturing establishment with raw materials on hand and articles in process of completion, or in case of a plantation and equipments and a growing crop or the like; and even as to the exceptional cases, the decided cases are not harmonious. Burrill on Assignments, §§ 212, 213, 214, 396. The reason why a direction to continue the business of the debtor is condemned is that it is inconsistent with the rights of creditors, who are thus deprived of their just right to enforce their claims against the. property of their debtor for an indefinite and uncertain period, while the property, professedly devoted to the payment of creditors, is put to the hazard of the business in which it may be employed, without their consent, and beyond their control; and that such a course is likewise inconsistent with the nature and professed object of an assignment for the benefit of creditors. Therefore, where the instrument of assignment contemplates a continuance of the debtor’s business, as it was carried on before the assignment, it is to be held illegal and void by the concurrence of the adjudged cases. Whether a stipulation that the trustee may make such purchases of goods as will better enable him to dispose of the goods assigned will cause an assignment to be annulled has been differently decided. The propriety of such a provision has been affirmed in Virginia and Tennessee. Marks v. Hill, 15 Gratt. 400, lately reaffirmed in Williams v. Lord, The Reporter (1881), 759; Rindskoff v. Guggenheim, 3 Cold. 284, cited without criticism in Tennessee National Bank v. Ebbert, 9 Heisk. 153. In England the distinction taken seems to
The second instruction for the plaintiffs is erroneous in telling the jury that the proposition made by the appellants to creditors, after making the assignment, to compromise with them by paying a sum less than their demands, was a circumstance from which it might infer that the deed was void, as intended to delay and hinder creditors. It was a circumstance to be considered by the jury, but it was wrong to say that it justified the inference which would condemn the assignment. The instruction announces the value of this circumstance, and estimates it too highly. It was not for the court to tell the jury what inference this circumstance warranted, but it should have been left for the jury to weigh it and fix its value as part of the evidence to make a verdict. The first instruction for the plaintiffs below is erroneous. The fact that McCarroll, one of the assignors, was administrator of the estate of John R. McCarroll, deceased, was disclosed by evidence aliunde, and by similar evidence it is abundantly shown that the preference made by the assignment in favor of the estate of said decedent was not the reservation of any benefit to McCarroll, the grantor, in the assignment. The fact on which the instruction is based, and the harmlesness of it, are both shown by evidence dehors the deed. The one neutralizes the other.
Judgment reversed and new trial awarded.