15S
RDERAL
vol 48.
SANGER et··
t,z. f,. FLOW et ale Ootober Te"" i891.)
Court of Appeals,
.E:tu"'th Oircuit.
L .SsIdhB,NT :roB BBNlIJ'JT OJ' ORlIlDI'lOB_VALJDlTY-INVENTORT. Mauaf. Dig. Ark. S 805, provides that before an assignee fortb,e benefit of oreditI)rs shJ!Jl be entitled to take possessiqn ,0tfJr 'in anr wise control the assigned property he,sh'aIlfile a complete inV'entoty of the property, and a bond in double its estimated 'value.. .H6Zd. that a provision .In the. de.ed of assignment that th.e .assignee shall Dot pO\lsession.uptll he files therequ,ired bond is surplusage, and will be constrUed as authorizlllg him posse8810n before he files an inventory, in vio'la1liohof the terms of the ': I
,Where' a deed of assignment prefers certain oreditors, and l'rovides that the 8neleof tbefund shall be paili to all the remaining creditors pro rota, its validity is , not dected by the faUurUo. Jive in the desd in any schedule attached thereto the names of the creditors' or the amo)lnts due tliein, 8. fU)tlt-TIIlllll OJ' APPLioiTlott OJ' 'PROOBBDS. ' '. : Ndr: ilthe validity of such l'8lJigument a1fectedby fallure'tQ ba,ltmit ot time tor , · to apply the ,ropeed.s oftha assignE1d property.,
.....U.NPBEPBRRED CRBDI'/lORs-SOJIlilDULB.
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... 'SUTtrl'IIil-CQltsTBUOTION'-ADOPTIOl!'QJ' Bun LI.WR BY CONGR)jSS.
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. Since A.ct Congo .May9j 1890, (26U.. s: Bt. 0.182, ,5 81,) adopt" auid plltllln torce In the Territory of .the. state of Arka",sas, it will1?O presqmed that the oonstruptiou and intllrpretatIon placed onthes8 statutes by the "aupl'8ineoourtt>f the.tatbrpI'ior:thereto were adopted at the, time.
sam'
7. ,4.TTAOJJIlBNT-'-CuiMs BY Tmu PBRSj)Ns-WI#nSSBs-EumNATION. : Whereah 'attachment Ii levied 011' the grolind thatdefendantilhave disposed of their of a. interven,es, claiming,the attach'ed'Jlroperty under an as'sfgnment for the oenefit.of creditOrs, it is within the discretibli Of the coun, on the trial of the intervention, to refuse to allow plainti1f questions to,theassig,nors., . , ,to
pO'AA8llionof or in ,any theassigne,4 property, "ill Dot invalidate t)i.e of assignment as.against'an ,attachment levied after it was executed. Followbig ·OU.l1Iton.y. J'ohnBort, '86 Ark. . , . , .'. . lL 8.uI:E., , , I ' , " '. WheM .1. levied the aellignell ili ab1l!l make aninventorY, anQ".the property ililold' by the marshal as being perishable, an.' inventory by tjleaasJgnee, :whi'Clh adOpts the delOription.undllr Which the propertywu sold by the marsha,)., sufticieut. " :. ' ."
'alialgJmi propeny, as MauSt. Dig. A.rk.S 805,requires him' to do before be takes
The
:roB BBNEI'IIi',0"
of an
for the benefit. of credltors.to file an Inventory otthe
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111 not grop.d for a demurrellto his 'petition, but only for a motion for a more specUla statement. On an issue as to the validity of this assignment, evidence that theassignol'8--4 partnership-preferred and provided for the payment of an individual debt of one of them, is irrelevant where there is no allegation that the assignee knew of or participated in this arrangement. 8A.MB-INsnuOTIoNs-ILuWLESS ERROR. ANOY.
The failure of the intervenel"to We the deed of aSSIgnment under which 'he olaiml
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t 10.
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Where the only objection to the assignment Is that the failed to conform to the requirements of the statute, an instruction that it is the duty of a failing debtor to assign all his property for the benefit of his oreditors is harmless error. Where plaintiff in the attachment denies the validity of the assignment under which the intervener claims, the burden of showing ita validity is thrown on the intervener, and he has the right to open and close.
SAMII-TRIAL-RIGHT TO OPEN AND CLOSE.
Error to the United States Court in the Indian Territory. Action by Sanger Bros. against Flow & Foster, in which L. P. Ander, IOn intervened. There was judgment on verdicts for defendants and intervener, and plaintiffs bring error. Affirmed.
SAKGER
'V.
FLOW.
153
Before CALDWELL, NELSON, and HALLETT, JJ. W. O. Davis, for plnintifl's in error. W. B. Johnson, 'A. O. Oruce, and E. Mitchell, for defendants in error.
a.
CALDWEJ.L, J. On the 24th of Novenioor, 1890, the plaintiffs in error brought suit in the court below agairrstFlow & 'FoSter upon account fc,r $2,171.67. On the same day the plaintiffs filed an affidavit for an l\.ttachment against the defendarits, upon the ground that they had disposed of their property with the intent to defraud their creditors. An order of attachment was issued On the 24th of No....ember, and on the same- day levied on a stock of general merchandise, store fixtures, safe and contents, books, accounts, and notes, which had been the property of the defendants. Upon the application of the plaintiffs the court made an order directing a sale of all the property attached as perishable property, and on the 5th of J antiary, 1891, it was sold by the marshal. On: the day the plaintiff sued out the attachment, but some hours before. the order of attachment was issued Or levied, the defendants executed a deed' Of 'assignment to. the Jnterpleader, Anderson, conveying to him, 'rl trust for their creditors, the identical property afterwards seized by hemarslilil on the order of attachment against the defendants. The fleedi"of 'assignment Was duly acknowledged and delivered to thenssignee, 'and filed for record before the order of attachment reached the hands of 'the marshal. The assignee appeared,and filed an interPlea, claiming the attached property under the deed6fassignment, and the defendants filed an affidavit denying the grounds of the attachment. The plaintiffs filed an answer to the intei'plea, denying the execution'of t4e deed of assignmellt, and alleging thant was void on its face, fraudin fact, and executed after the issue and levy of the writ of attachand on the attachment were submitment. :l'he issues on ted'to tHe same jurywhq-foundtheissues on the interplea: in favor of the interpleader, and on the attachment in favor of the defenda.nts., , Judgment was in favor of the interpleader for the proceeds of the sale of the atta¢hed prcperty, and in favor of the defendants quashing the attachment: 'The specificationsdferiors filed,'below'and relied' u pori in counsel'sbrief will be considered. The act of congress approved May 2, 1890, (26 U. SO st; c. 182, § 31,) adopteri and put in: force in the Indiitn Territory the body of the statutes of the state of Arkansas, as contained in Mansfield's Digest of the laws of that state. Among the statutes thus put in force wae, chapter 8 of that Digest relating to assignments for the benefit of creditors. Section 305 of the Digest provides that before the assignee shail be entitled to take possession, sell, or ill ,any way manage or control the assigned property he shall file in the office of the clerk exercising chancery jllrisdiction a full and complete inventory of the property, and a bond double its estimated value. The deed of contai'nlJ" this ,elause:"The said L. P. Anderson notto bike possessIon ofsaidpl'operty until he shall have filed' a good and sufficient bond, as insueh ",oases
in
FEDERAL
vol. 48.
made and provided." > rphe deed no reference to an inventory, and the contention is that the clause prohibiting the assignee from takuntil he'gives bond"js to providing thlithe shall take possession before making and filing the requisite inventory. Itis the settled construction of this act by the supreme court of Arkansas i.Qat l1deed of assignment, which in terms or by necessq,ry implication,prqvides that the assignee shall take possession of the assigned propand files the required inventory and bond, is repugnant tothe statnte, .andvoid. .:I;3utit is not essential to the validity of a qf assignment it should require the assignee .to make and file the andboml. The law lmposes that duty on the assignee. The clausejp the deed requiring the assignee to give bond before taking possession of. the property is, therefore, surplusage. A useless provision, relating to giving the bond, which is in harmony with tl;:le statute, cannotb& construeda,s or directing the assignee: to take possession :before he makes an inventory, in violation of the statute. The d,eed ofas£iignment prefers certain named creditors, and provides that, trust and the preferred creditors, the J:>alancw of the trust fppd shall1;>e paid "to all our remaining creditors prorata,l¥lCording to indebtedness." ,The names .and amounts d,ue the unpreferredcredjtO,rs are not given in the deed or in any schedule attachljld thereto. .It:is claimed t.hat the failure to attach such a 84heduleaiV9ids the deed. ' The law is .otherwise. Burrill, .Assignm. pp. 186,2Qi}. Such a. schedule, iffiled, would not be conclusive as to who were creditors, or the amount of their debta. If any surplus remains to be distributed. to such creditors, and tlwre is any doubt as to who they are, or theamQunt of their debts, the assignee should refer the matter ,to the cQurf of chancery the trust, and that court will, by proceeding, determip.e these questions, and order the fund distributed accordingly. If the asl!ignee fails to act, any creditor :IJlay compel him do so.. Nor does. the failure to fix a limit of time for the 8ssign,e. to apply tbe proceeds ·,.of the property affect the validity of the deed ofassignmeI)t. Burrill, Assignm. p. 323. If the 8!l$ignee not. pay over; the trust to the creditors as quickly as should, the court under whose supervision he is administering the trust, or any court of chancery having jurisdiction, will (lompel him to '«l()' 80 on the ·of ap.y creditor. Several asa,iWlments oferror rest.c;mJpe pr9position that the failure of the assignee W.make and file the required inventory and. bond before the property was attached by the plaintiffaavoids the deed as against such .attllchment. In adopting the Arkansas Iltatutes for the Indian country it will be. presumed that they were adopted with the construction and interpretatiQp placed by.thesupreme cQurtofth{l.t state prior ,tQ their adoption by: congress. .It has long beeq. settled by the decisions 'Qf the. court constr1;1ingthe statqte under considerand delivery of tQedeed of assignment to the the title to the assigne4property; that t.be failure of the assiinee to make filetbe giv!,! does not affect
155 the validity of the ,or theassignee'!ltitle to tlie:property thereunder, but that the assignee is notl'entitledto take possession, sell, or in any way manage or cootrol» the assigned property until he makes and files the inventory andgivEls the requited bond, though he may have "access" to the property for the purpose of making his inventory. Claywililv.Johnson, 36 Ark.406j Thatcher v.Franklin, 37 Ark. 64jRice v. FraiySCf'j 24 Fed. Rep. 460. If fol' any reason the assignee does not make the inventory and give the bond within a reasonable time, the debtor, or anyone of his creditors, may apply to the proper court for the appointmant of an assignee who will qUalify and execute the trust. Ow/yfxm.v. Johnson, supra,'422. In thiscll.se the llttaehmentof the assigned property by the plaintiffs put it out of the power of the assignee to make any more exaot and complete inventory than was made. It seems that he finally adopted as his own the inventory made by the marshal under the order of attachment. As to item, it is said that the inventory is not. sufficiently specific, viz.: "One iron safe, books, accounts" and notes, $1,500." But tht> property was seized by the ma:r..: shal on the order of attachment before the assignee had had time to make aD inventory, and it was afterwards sold by the marshal upon an order of the <Jourt, and assumed the shape of in the hands of the marsh'81.61' in the registry of the court. The aasignefl could, therefore,' do nobetfedhan accept the marshal's description of the property which he and sold. As this condition of'things was brought about by the attachment sued out by the plaintiffs, they will not be heard to complain of the neceseary results of their own action. The inventory, being the best and only one that could· be made· imder the circumstances,· was sufficient. Now that the property has been converted into money in the manner stated, an inventory of that would be sufficient. The case seems to have been tried below by the plaintiffs in error on the theory that the interpleader could not maintain his claim to the property unless he had made and filed the reqUired inventory and bond before he filed his interplea, and that, if he had not done so, the plaintiff's attachment should be sustained. But neither of these propositions is sound law. The interpleader might make and file therequiredinventory and bond during the trial, and they would have the same legal effect as if they had been made and filed on the day the assignment was executed; and, if the assignment was otherwise valid, a total failure to make and file the inventory and bond would not invalidate the assignment, 01' sustain the plaintiff's attachment of the assigned property. .In such Case the property should be discharged from the attachment, and returned to the custody from whence it was taken, there to remain until the assignee qualified himself to receive it, or until a court of chancery, on the application ofthe debtor or aome creditor,'appointed an assignee to execute the trust. It is assigned for error that the plaintiff "proposed to propound to the assignors leading questions," and the court refused to permit them to do so. This was a DIatter resting in the sound discretion of the trial court, and not reviewable in this court. In the trial of the issue between the
156
I'EDERAL REPORTER,
plaintiffs and interpleader the plaintiffs, no more than the interpleader, had a legal right to ask the assignors leading questions. A demurrar to thejnterplea was overruled, and tb.at ruling is assigned for error. We see nO'objection to the sufficiency of the interplea. It was sufficient in substance.-,, ,If a copy of the deed of assignment should have been attached\to plea, the failure to do so was not ground ofdemurrer, but only of a. motion fora more speciticstatement. Such a motion was afterwardstiled, butH did not ask that the interpleader be required to file a copy of the of assignment. The plaintiffs offered to prove· by the witness Betts.that a note which the and held in his, band, for $360, and purporting to be signed'M,.J. Foster" and "p. D.Flow," and payable to ope Lewis, was given forlanimprovement sold by Lewis to Foster, and which improvement had· since been occupied by Foster as, ,his home!jteadj and that said MteW8S signed by Foster alone; and that Flow's name was,added llfter witness purchased the note from Lewis. This evidence was eXAtudad: upon the ground,as stated in the bill of exceptions, that the pote-,Wfl.s ,the best evidence as to whp were its makers. The object of ,this evidence was to show thattbe ,assignors had preferred and provided t'or,-,the payment out of the firm assets or an individual debt of. O,ne of,the partners. Tlle evidence was rightly excludecl,but not for the rea&onassigned in the bill of exceptions·. It was irrelevant, and did not tendHtQ.impeacij.·the Ilssignment, unless; ,the assignee had knowledge of and i in ·tlle arrlingement. Emerson v. 8elJ,ter,118 lJ. S. 3, 981.. ,The courtfjxpresses no opinion question on -thE! p\trt of, the assignee tim,E1' he acwould avoi,dthe deed. question is not in the case cepteq,tlw upon the The' answer to the setting, up this does not a party, to the transactiQn,.or had any it whatever; nor was iLproposed to otrerl;luchproof. was irrelevant to the issjle, ,and rightly F.orthese v. Se'(lt,lr,':8Up'I'(}'. . ',... in,errpr 13xqepted .to every.paragrnph of the charge to P9."."u qsta,n.tial. er,roJ.'.:i.n the charge for. w.hiqh the the jury.. N. ;lase shoU)<;1,.be pE!\",erS;lilcl;IQ the course oLthe charge the Qourt told the Jury that ",it ljlas,peen decided by judicial au.thorities, both ,tIl tbis cotlntrY,,and in England, that a Jailing debtor qasnot only the privilege,j:>Ut itis ,his duty, to make an. assignment of aU pis property for the .9fhisqreditqrs." The law imposes no such duty on a failing .the statement that it does was erroneous; but, as it was an Pfqp,osition, which cou1dno,t affect Or influence the vernQt £.or casesh,ould be reversed. , Jt is that the interPlellder was penllitted to open and close the argument to the jury. The plaintiffs denied the execution and validity Q(theassignment. This the burden on the interpleader ()r proving the execution of the deed and .his title to, the assigned prC)p.ElJ:'ty,and entitled him and close on thatissne. collcerned on The interpl,ea,<;lel'w&+!.
BEUTTELL fl. MAGONE.
157
That was an issue between the plaintiffs and the defendants, triable before the court. Holliday v. Cohen, 34 Ark. 707, 716. It was, however, submitted to toe the issue between the interpleader and the plaintitrs, because it w.as known its fate must be determined by the rl\sultof that issue.. There was no ground for the attachment other than the t,Dll-king of the deed qf assignment. If the assignment was valid, the attachl,l1;nt was confessedly wrongfully sued out, and vice. versa. The ".ea.l.1.·. ... .. w.as. o.n the in.terplea, and the interpleader'.s rights could. no.t . be the and defendants agreeing to submit to jurY issue between them 9n the attachment· . There was an error in the. mode of impaneling the jury in the case. llauwaYqCo; ,v. lames, Rep. 148,Cdecided at the present ter!l1.) But are lill :of opinion that upon the state of the pleadings and the pl'oofs in this case there was nothing for the court to submit to the jury, and i that the court. should have directed a verdict for the interpleader. Chandler v. Von Roeder, 24 How. 224; Commissioners v. Clark, 94 U. S· .278. '1'here was.no evidence tending in the slightest degree to impeach the An appellate court should not reverse a judgment for an el10Fwhen it plainly, appears from the record that the error worked complaining party no. harm. Deery v. Cray, 5 WalL. 795, 807; $mjth v. Shoemqker, 17 Wall. 630; Gregg v. Moss, 14 Wall. 564; West U. S. 507,521,10 Sup. Ct. Rep. 838. As the verdict rendered. w.as the only verl1ict that could have been rendered in the maMer how the jtiry was impaneled or constituted I the plaiJ;ltiffs were not harmed by Judgment affirmed.
BEUTTELI. tI. MAGONE, t,,,
Collector.
,. r
(Circuit Oourt, S. D. New York.. January 29,1890.
OVSTOl\JB LAWS-RUGS-TOURNAT VELVET CARPETS.
rugs and Dag. Dag. rugs of like qhar<.cter or descriptioll- to TOurl?aY 'vehtet carpets, though not, Or not made from, portions of· such carpets, are, under ScheduleK'of the.ta:riff !!oct of March 3,1883, (22 U. S. StASS,) dutiable at the rate pf duty illlPosed by that Bchedule npon Tournay .
.' During November and December of the year 1887 the plaintiff made six importations from Halifax,Englund, into the port of New York,of mercpandise as Daghestan rugs anll Dag.. -'ago rugs. These rugs classified for duty by the defendl,lnt, as collector of that pqrt,a./3 rugs of like character or description to TotirnaY,velvet carp.ets, that "mats l rugs, screens, covers, hassocks, bedsides, otber portions, of carpets, or carpetings, shall be subjected, to the.rate 'of dp,tY,hewin imposed Qn:carpets or like chllracter or dein, Kof the tafiff,.act of)4arch 3,