Jaffray v. McGehee

The statutes of Arkansas contain the following provisions:

'Sec. 385. In all cases in which any person shall make an assignment of any property, whether real, personal, or choses in action, for the payment of debts, before the assignee thereof shall be entitled to take possession, sell, or in any way manage or control any property so assigned, he shall be required to file in the office of the clerk of the court exercising probate jurisdiction, a full and complete inventory and description of such property, and also make and execute a bond to the state of Arkansas in double the estimated value of the property in said assignment, with good and sufficient security, to be approved by the judge of said court, conditioned that such assignee shall execute the trust confided to him, sell the property to the best advantage, and pay the proceeds thereof to the creditors mentioned in said assignment, according to the terms thereof, and faithfully perform the duties according to law.

'Sec. 387. Said assignee shall be required to sell all the property assigned to him for the payment of debt, at public auction, within 120 days after the execution of the bond required by this act, and shall give at least 30 days' notice of the time and place of such sale. And any person damaged by the neglect, waste, or improper conduct of such assignee, shall be entitled to bring his action on the bond in the name of the state for the use and benefit of such person.' Gantt, Dig. 207, 208.

While these sections were in force, to-wit, on December 19, 1878, James C. Moss and John S. Bell, partners under the name of Moss & Bell, doing business as merchants at Pine Bluff, Arkansas, conveyed, by an assignment in writing, all their goods, wares, and merchandise, and choses in action, to the defendant James M. Hudson, as trustee in trust for the payment of their debts. The deed of assignment preferred certain creditors, who afterwards became the complainants in this suit, and required the trustee to pay them in full, if the proceeds of the property assigned should be sufficient for that purpose, and if there should be any surplus to pay it share and share alike to other creditors. The powers conferred on the trustee were as follows:

'To sell and dispose of all of said property for cash, as he should deem advisable and right, and to this end to use his own discretion, subject to the supervision of the creditors, * * * and to conduct and transact all of the business as he may deem proper in the exercise of a sound discretion, and as he shall deem most advisable for the benefit of creditors and their trust; and he shall have power to appoint such assistants, agents, and attorneys as in his judgment may be necessary to enable him to fulfill this trust,' etc.

Hudson accepted the trust, and on December 21, 1878, gave bond according to law, and filed in the office of the clerk of the probate court an inventory of the property conveyed to him by the deed of assignment.

On December 21, 1878, the defendants McGehee, Snowden & Violett recovered against Moss & Bell, in the United States circuit court for the eastern district of Arkansas, a judgment for $10,992, on which execution was issued on January 12, 1879, and the same came into the hands of the marshal of the district on that day. The marshal levied the execution on the goods and chattels assigned by Bell & Moss to Hudson, and took them into his possession, and was about to advertise and sell the same to satisfy the execution, when the bill in this case was filed by the complainants, who were the preferred creditors named in the assignment. The bill recited the foregoing facts and prayed an injunction against the marshal and McGehee, Snowden & Violett, forbidding them to interfere with the property assigned to Hudson, and that they might be decreed to return the same to him, etc.

The defendants demurred to the bill for want of equity. The circuit court sustained the demurrer on the ground that the deed of assignment was void on its face, and dismissed the bill. The purpose of this appeal is to reverse that decree.

Sol F. Clark and S. W. Williams, for appellant.

U. M. Rose, for appellee.

WOODS, J.