53 Fla. 872 | Fla. | 1907
(after stating the facts) : From the answers of the defendants in this cause and the testimony reported we are of the opinion that the complainants have failed to make out any case of actual fraud or fraudulent intent in the execution of the mortgage by the Wylly-Gabbett Company to George W. Owens, as trustee for the creditors named therein; on the contrary, we think that the case shown by the testimony is that the said instrument was made by the grantors therein in good faith to secure a large and hona, fide indebtedness due by them to their largest creditors, and for the purpose óf raising additional funds with which to pay off their other unsecured creditors and to enable them to carry on their extensive lumber and saiw-mill operations, with the object ultimately of paying all of their creditors in full. This being true the propriety of the decree appealed from depends upon the proper .solution of but two questions :
(A) Is the instrument executed by the Wylly-Gabbett Company to George W. Owens, trustee, under the circumstances in which it was made, either in fact or in law an assignment for the benefit of the creditors of said Wylly-Gabbett Company, or is it to be held and treated merely as a mortgage security to the creditors named therein?
(B) If it is construed to be merely a mortgage securing the claims of the creditors named therein, did the Wylly-Gabbett Company at the time and under the circumstances in which it was executed, even admitting that they were then in an insolvent condition, have the legad right thus to secure certain of their creditors, to
Section 2307 of the Revised Statutes of Florida of 1892, provides that “no assignment made for the benefit of creditors shall be valid in this state, except the same shall be made in writing and shall provide for an equal distribution of all the assignor’s real and personal property, except such as is exempted by law from forced sale, among the several creditors of the said assignor in equal proportion to their respective demands.”
It is clear that if the instrument under discussion is construed to be in legal effect and assignment for the benefit of creditors then it is voidYmder the provisions-of this statute because of its attempted preference of certain creditor to the exclusion of others. The purposes of this statute being to prevent the preferment of any creditor in an assignment made by a debtor for the benefit of his creditors. But should this instrument be construed to be in. legal effect an assignment for the benefit of creditors?
Section 2126 of the Code of Alabama of 1876, provides as follows: “Every general assignment, made by a debtor, by which a preference -or priority of payment is given one or more creditors, over the remaining creditors of the grantor, shall be and enure to the benefit of all the creditors of the grantor equally.” The courts of Alabama in construing this statute held in effect that where the conveyance or transfer is of all, or substantially all, of the debtor’s property, regardless of the form of the instrument by which it is made, whether in form of a mortgage or deed of trust, it falls within the purview
The contention of counsel for the appellees is that the same construction put. upon their statute regulating assignments by the Alabama courts should be placed here upon our Florida statute on the sajne subject.^ That is, that where an insolvent debtor, or one in embarrassed circumstances, in good faith executes a mortgage upon substantially all of his property to secure the payment of a bona fide debt due to one or more of his creditors to the exclusion of others, that it is ipso facto an assignment for the benefit of his creditors with attempted preferences, and therefore void under out statute regulating assignments, and a fraud upon the unsecured creditors, whether the debtor at the time of its execution contemplated or had determined upon a general assignment for the benefit of his creditors- or not, or whether he in good faith retained the full possession and control of the mortgaged property .subsequently to the execution of the mortgage and with it or out of its proceeds in good faith hoped, expected and intended to work out, earn, realize and pay his indebtedness or not. We cannot follow the Alabama courts to this length, and for reasons founded in a sound public policy. If a man owning large and valuable properties,' but embarrassed for available cash, cannot make a bona fide mortgage upon the whole of it for the purpose of raising ready cash to pay debts, to carry forward business enterprises, or perhaps, to put the property mortgaged in profit yielding shape, or salable condition, without being held to have made an absolute assignment of it for the benefit of
Section 1981 Florida Revised Statutes of 1892, declares that: “All deeds of conveyance, obligations conditional or defeasible, bills of sale or other instruments of writing conveying or selling property, either real or personal,
There is nothing in the proofs to indicate otherwise than that this mortgage was executed in good faith for the honest purpose of securing the creditors therein provided for iñ the payment of tona fide detts then due them and to secure them in further advances of money then made ,or thereafter to be made, by them to the mortgagors to enable.them to carry forward their saw mill and lumber operations, and to enable them to pay off other unsecured debts. Neither do we think that there is anything in the proofs, -or on the face of the mortgage itself, to indicate that at the -time of its execution it was done with any intention, wish or design to hinder, delay, defeat or defraud any other creditor jn the collection of any claim against the mortgagors. Neither do we think from the proofs that the mortgagors had any intention or design at the time of the execution of this mortgage of making an absolute disposition of their property for the benefit of either the secured creditors or of their creditors generally, or of evading -or defeating the statute forbidding preferences in a general assignment for the benefit of creditors. On the contrary the proofs show that for nine months after the execution of the mortgage they retained possession and control of the mortgaged properties and endeavored during that time to
It must bé borne in mind that the business of this corporate mortgagor was that of manufacturing lumber ■with saw mills and other machinery from the timber oh a large area of land, and in connection therewith operating a railroad for transporting both logs and manufactured lumber, and that the mortgage covered all of this
From the authorities cited our conclusion is that the instrument in question is not an assignment for the benfit of creditors either in fact or in its legal effect, but that it is a mortgage merely, and that the corporate mortgagor had the power and right to make it under the circumstances in which it appears to have been made, and that it has not been shown by the proofs to be either an actual or constructive fraud upon the other creditors of the mortgagor not provided for therein, and that it is a valid subsisting lien upon all of the properties covered thereby, having legal priority over the claims of the other creditors, appellees herein, not provided for therein. It follows that the decree of the court below appealed from herein must be and is hereby reversed, with directions