888 DODD
FEDERAL REPORTER.
and others
'V. MARTIN
and another.
(Oircult Oourt, E. D.Arkansa8. October Term, 1882., 1. ASSIGN)fENT FOR BENEFIT OF CREDITORS - DEED OJ' ASSIGNMENT - FAILURE TO A'l'TACH ,SCHEDULE.
The failure to attach the schedule of property described in a deed of assignment, renders the deed ,inoperative and void as to all property intended to be embraced in the schedule, and not otherwise described than by reference to it. 2. SAME-STIPULATIONS.
A deed of assignment containing a stipulation that no creditor shall participate in the proceeds of the property assigned unless he accepts t)le same in full satisfaction ()f his debt, is valid in Arkansas; but a deed containing such a stipulation, to he valid, must convey all the debtor's property. '
On the twenty-sixth of December, 1882, the defendant executed and delivered to Allison, as assignee, a deed of assignment for the benefit of creditors. Two days afterwards the plaintiffs sued out: an a;ttachment against, Martin., which on a stock of goods in, the possession of Allison, the assignee, and which had belonged to Martin. Martin traversed the plaintiff's affidavit, upon which the attach. ment was sued out, and Allison filed an interplea claiming the goods attached as assignee un4er ,the deed of! llssignment. Both issues were tried before the court. That patt of the deed of assignment material to the case reads as follows: "I, John A. Martin, do hereby grant, bargain, and sell to T. J. Allison, assigneeln'tli Ii8t,i'fm.t the ·benefit of a:11 'my creditors,the goods, wares; dise, and property hereto attached in Schedule A, made apart (If thisOODWWallce, to have and to hold to him in trust as aforesaid forever; I conveying also to the said T. J. Allison, assignee, for the use aforesaid, all notes, books, accounts, and e\'ery class and character of evidence of debt to me belonging, or relating to my business in any manner whatever. with full authority in said '1'· .T. Allison, assignee, to collect the same and apply thew to the uses of this trust in manner and form as is by 'law prescribed in thai behalf. TIle said T. J. Allison, assignee, shall prpceed to collect and dispose of goods, wares, merehandise, and chdses in action, and apply the same to the of myereditors,share and share alike: provided. no creditor herein prOVided for shall participate in the assets herein assigried, unless he accepts th6sarn'e in TuIlOf his .'This aSSignment to be closed under' the direction of 'creditors assenting to the s a m e . ' " "Decembe1' 26, 1882. [Signed] ii",. ,J . . . .T.4,",:MAR,TIN."
ilp
j
The deed was acknowledged and delivered, and the keys of the store, house, and possession of the stock of goods delivered to Allison as assignee under the deed at its date; but the assignee did not ilia
DODD
v.
llrIA:RTIN.
839
the inventory and give 'the bond as required by section 3S5,Gantt's Di· gest, and had not done so down to tbe day of trial; and the schedule mentioned in th'e deed as being' attached thereto and made part thereof was not attached, and was not made out at the time the deed was executed and delivered, nor until sometime after.the levy of the attachment. 'U·. M. eX G; B. Rose, for plaintiff.' The deed is void for the following reasons:' f.It exacts releases and by implieatio11 reserves the Burplus to the grantor. Mal(U)lm v. He'dges, 8 Md. 418; Whidbee v. Stewart, 40 Md. 414; Ingraham v. Whedeh 6 Conn. 277; Bump, Fraud. Cony. 430; Burrill, Assignm. § 207: ".' . 2., No time is specified within which. "creditors are to ac;ceptaud release. Bump, Fraud. Cony. (2d Ed.) 433; Burrill, Assignm. § 197; Henderson v. Bliss,S Ind,'100; 2 Kent, Comm. 533. 3; Ths Sch.edule A mentioned in the deea not having been attached the.reto, the assignment was ineffectual' to convey the property intended to be embraced ill the schedllie. Barkman v. Simmons, 23 Ark. l;:·Moir v. Browll, 14 Barb. 39. !assignment took effeot as to the choses in 'action at the time of its delivery. CltliyWn v.Johnson, 36 Atk. 406. At the time of the levy it was, therefore, a· partialassfgnment, exacting releases, and void. Burrill, Assignm.(4th Ed.) 278; Bump, Fraud. COnv.(2d Ed.} 492; In re Wilson, 4 Po.. St. 430; Graves v. Ray, 13 La. 454; Hen· nes]} v. Bank,'6' Watts & S. 300; Olayton v. Johnson, sUpra·. '5.'The provision that theallsigmnent shall beclosed'tl'l;l under the of the creditors assenting to the' same the assignee the mere agent of those creditors:' The assenting creditors are by this clause invested with plenary powers over the· estate, 'and yet they are governed by no law, give no bond, take no oath, and are answerable to"'no one for an abuse of these powers. Nor would the assignee be responsible for obeying itbeh ordenl to the prejudiee of the rights of other creditors, because one of the conditions of his bond is that he "will execute the trust confided to him · · · according to the terms of" the 8,ssignmertt," one of whick is tha.t he shall close it up under the direction of the assenting creditors. Section 43 of the bankrupt. act (section 5103, Rev. St.) authorized three'..follrths in· value of the creditOrS who ha.dproved their debts to""willd up and settle" the bankrupt's estate bytruatees appointed »yth:em. These words werEfheldAo"be large enough to embrace the management of 'the bankrupt's l!lsta.te, and the entire
840
direction of thE! committee of creditors to the trustee in regard to the settlement-of the estate was held to be conclusive and binding on the bankrupt· court and all other creditors. In re Dorby, 4 N. B. R. 211; In re Jay Cook Co. 11 N. B. R. 1. And if this deed is held valid, the clause in question has the effect to deprive the assignee of all control over the administration of the trust. The clanse is not only without any statute authorizing it, but is in derogation of the statute, which points out specifically how the assignee that he shall discharge his trust. It is not for the debtor to can devise a better mode of administering the trust than that preWhenever he has a.ttempted to do so, the assignscribed, by ment has been adjudged void. Raleighv. Grijfi.th,87 Ark. 150; Teak v. Roth, M. S. opinion, No:v. Term, 1882; Schoolfield v. Johnson, 11 FED. REp; 29.7. , .' 6. The statute prohibits the assignee from taking possession of th.e property assigned until he has filed the inventory and given ,the. pond required bylaw. :Parties cannot 4;1efy the law with impunity. .The objectof ,th statute waS to. put it out of the power of an' irresponsi. hIe or dishonest assignee selected by the debtor, t.o defraud thecreditors. T,he;.j:prQhibitioIl is addressed to the debtor as well;&,& the An aot knQwingly done. i.1l violation .of 8tD express command of a,statute, enll.cted to prevent fraud, is itself a fraud in law. No inquiry,1s .permissibleto :show .the statllte was violated through iguora,nce,or for a good. purpose. 7. The,caae of Cluyton v. Johnson does .notdeoide that the <;lead in that ;was a valid deed;, Objection to the introduction of the .below; but after: it was introduced deed was. not made il). .the an instruction was that tl).e deed be diaregarded because it contain,eq. a clause exaQting releasee, 'J.'his wastbe'J>:Q.!y question of law reseryeil, and, of COUl'se, the su.prE;looe court c6u14 not pass upon any Qtherpotnt. Itis,clear.that the deedwa,s bad for severaI'reasons,and thatit must if the points had been raised in the trial court. Joseph W.. Martin; for defendant and interpleader.· 1. ,The any purpose till the transaction was .by, attaching Schedule A to. the. deed as cQntemplated by the parties. , .2. This deed.is aliter-al copy of tbat in: Clayton v..J ohnsof!., ,8f!, Ark. 406, eiXcept.thie clause,: "The'said-JohnsQn shall proceed to aeU said goods, eto., on the best terms, he can in his direction,". which is omitted. That deed was held valid. True, the tj1ain;question in
· D01>DV. HAaTIN. '
that case was the validity:of theclauseexMting releases; the court could render the judgment they did, they had to find the deed was not constructively fraudulent for any, '1'eason. 3. There is no such resulting trust or implied reservation of the surplus to the debtor as will render the deed void. Brashierv. West, 7 Pet. 615;,Skepwith v. Ounningham, SLeigh, 271; Gordonv. Gannon, 18 Grat. 394; McFa,rland v. Birdsall, 14 Ind. 129; 11 1.11.. 3 Watts, 198; 8 S. 304;5 Watts & S. 223; 8 Grat. 457; 58 Ala. 659 j 1 Paige, 305 j 17 Ala·. 659; 1 Ired. 453; 4 WlItsh. O. C. 232. ' 4:, elause. the aBsignment shall becloe,ed up nnder the direction of the creditors assenting to' same does the deed void. Kellog v. Slawson, 15 Barb. 56. It does not authorize the creditors to exercise any power inconsistent with the rights of all the creditors and the duties of the assignee and the rules of law. t\)l3 wquld be bound (0 observe the The creditQrs constrnotion which law. will render them lawfuL Julian v.Rathbone, 39,Barb. 102; Oardegan v. Kenneth, 2 Oowp. '432'; Jur.§ 258.' It would be to, say this clause was designed to 'perpetrate a a fran<l;' l,iasno tendency a result. Th'e ooqrt will'riQt assume'that the 0reditors mightro'ttempt .to t4eir unlawfdlly, but will rather indulge the prEl!mmpti()n' tha;t they would act ofalt' 1 " ',' according to CALDWELL, J. It will be observed'that the deed 'On it's face does not purport to aU'the .assignor's property. Thepropellty,cpnveyed is limited by the terms ofJthedeed trotbat mentioned and describeli in 'SchedUle A,:aildLtG the<om:oses in action which .a,re 8ts/ligned by an indepelldent clause ,in the: deed l and ,s,s;tQ,whichtha deed took effect nn its delivery., ",:, : Ji'J ,: IJ 'Ii' , . : r :., The :failureto· attaoh'theschedulerenders the deed and void as toallip1'qpertyintendeqi.to be embraced in theisame;:ltnd·:p.ot otherwisedelCrHbM·than bJlIlt rElferencetoit. .Barkman v. Simmons, 23 Ark. 1; Mair'·v, Brown,; 14oBllrb..39. that the deed ofoosignment, a,UbeJiimedif its: eXiooution:and qel;ivery, conveyed Ot:l1y'Il'part of the, r&ssignor7s property· The supxe.mec9urt, of this sta,tapin Glayt6n v; ·SV"Ark.4Q6, .hold that] 81 deed-of assignment' oontaininga stipulation: that..no,creditor. in tll6'pfocee& of tlia. Property. assigned unless ;he J,hEJ8.i\me in :ftill''satisfaction of his debt,. is valid.Bb t.a.deed a' stipu1a.tloDi, to be vali4,must c<mvey all the debtor's (
842
FEnERAL REPORTER.
is held in Qlaytonv. Johnson, Bupra, and is 'the doctrine of most of the courts which maintain'the validity of such a stipulation. "It is held," Mr. Burrin, "almost withont exception, that such a stipulation iii 'art assignment of part of a. debt.or's property is fraudulent." Burr. Assignm. {4th Ed.j 273; The deed, therefore, stipulating for a reloase and conveying only a part of the debtor's property, is fraudulent and void. It imparted no title to'the assignee as" against an attaching creditor, and justifietl the plaintiffs in attaching the a,Bsignor. The conclusion arrived at in this point is decisive of the case, and renders it unnecessary to decide the other questions so ably argued by counsel.
'...
LOOK,MANuF'a Co. v. SOOVILL . l:fA.wJ"a Co. ,.,. ',' . . . ' .
'.
.,"
f;
.,
(Oircutt Oourt, D. qonnecticut. February 15,188'3.) I 'i'ii
PA'l'ENT8-VIOLATIQNOP !INJUNCTION.
The plaintiff's mQtion for an attachment against the defendant for vlQlation of an injunctiQn restraining the defendant from the infringement of plaintiff's compel Qbedience of thetnaster's order to file an account of the articles which Il,l'e fhll,subject of the motion fQr an attachment, and which have been made since the service Qf theinjunctiQn order, llenied, on the ground that , articlecQmplained of is not an infringement. " '
Frederick H. Betts and Causten; Browne, for plaintiff. R. Ingersoll, for defendant. SHIPMAN,J. These are two motions: 'one for an attachment against the defendant on account· of the alleged violation of an injunction order of this court, which restrained the defendant from the infringement of the first ands6cond claims of reissued letters patent, No. 8,783, dated July 1, 1879, for an improvement in post.office boxes; and the other, to compel obedience to an order of the master directing the defendant ,to file an account of the post-office boxes which are the subject of the motion for an attachment, and which have been made since the service of the injunction . The .opinion of the court upon the final hearing describes the plaintiff's and the de. fendant's structures which were in controversy, and construes the reissued patent. 18,Blat¢hf. C.C.248j [B.a. 3 FED. REP. Thedefendant/s new boxes are made as before, except that the top, bottom, ftnd sides of each box are separated from the corre'i Charles l