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Statement of the Case.

Anthony B. Norton, the United States marshal for the Northern District of Texas, and the sureties on his official bond, for levying upon and seizing, under certain attachment suits in that court, the goods, wares and merchandise of said firm which had been assigned to the plaintiffs.

The plaintiffs in their petition set up the fact of the assignment by virtue of which they asserted title to the property, reciting the main portions of the deed at length; set out the details of the various levies under the attachment suits; and prayed judgment for the amount and value of the goods levied on, which were alleged to be something over $34,000. Upon demurrer to the petition, the court below held the deed of assignment null and void, and, accordingly, rendered a judg. ment in favor of the defendants. 19 Fed. Rep. 719. To reverse that judgment this writ of error was prosecuted.

The deed of assignment was as follows:

“Know all men by these presents that we, Louis Goldsal and Benjamin Hassberg, doing business as merchants in Denison, Grayson County, Texas, under the firm name and style of 'Louis Goldsal & Co.,' for and in consideration of the sum of one dollar, to us in hand paid by Fred. Muller and A. Jacobs, of same place, the receipt of which is hereby acknowledged, and for the further purposes and considerations hereinafter stated, have this day assigned, bargained, sold and conveyed, and by these presents do assign, bargain, sell and convey, unto the said Fred. Muller and A. Jacobs all the property of every kind owned by us, or either of us, individually or as a firm, either real, personal or mixed, said property consisting of our stock of merchandise situated in our place of business known as Nos. 204 & 206, south side, Main Street, in Denison, Texas, being composed of dry goods, clothing, boots, shoes, hats, caps, trunks, valises, gents' furnishing goods, show-cases, book accounts, etc., worth about twenty-seven thousand dollars, and all other property owned by us or either of us not herein mentioned, except such of our or either of our property as is exempt from execution by the laws of the State of Texas and no other; to have and to hold unto them, the said Fred. Muller and A. Jacobs, their assigns and successors, forever.

Argument for Defendants in Error.

This conveyance is made, however, for the following purposes, to wit: We, the said Louis Goldsal and Benjamin Hassberg, doing business as aforesaid under the firm name of Louis Goldsal & Co.,' are insolvent, being indebted beyond what we or either of us are able to pay, and desire to secure a just and proper distribution of our and each of our property among our creditors, and this assignment is made in trust to the said Fred. Muller and A. Jacobs for the benefit of such of our creditors only as will consent to accept their proportional share of our estate and discharge us from their respective claims; and for said purpose the said Fred. Muller and A. Jacobs are hereby authorized and directed to take possession at once of all the property above conveyed and convert the same into cash as soon and upon the best terms possible for the best interest of our creditors, and execute and deliver all necessary conveyances therefor to the purchasers, and to collect such of the claims due us or either of us as are collectible, and to bring and prosecute such suits therefor as may be necessary, and to execute and deliver all proper receipts, releases and discharges to our said debtors on the payment of said claims, and to do and perform each and every act and thing whatsoever requisite, necessary and proper for them to do in and about the premises for the proper and lawful administration of this trust in accordance with the law; and the said Fred. Muller and A. Jacobs shall pay the proceeds of our said property, according to law, to such of our creditors as shall legally consent to accept their proportional share of our estates, property and effects as aforesaid, and discharge us from their respective claims, and no others, he first paying the expenses of administering this trust, and a reasonable compensation to himself for his services."

Mr. W. Hallett Phillips for plaintiffs in error. Mr. Sawnie Robertson also filed a brief for same.

Mr. D. A. McKnight (with whom was Mr. John Johns on the brief) for defendants in error.

I. The deed of assignment is void, as against non-consenting creditors, for the reason that it authorizes the assignees to sell

upon credit.

Argument for Defendants in Error.

“To convert into cash” is obviously not the equivalent of " to sell for cash.” The fair meaning of the clause, convert the same into “cash,” is to convert the same into “money." It necessarily involves the authority to sell on credit, for if the clause is not a direction to sell for cash, it must be an authority to sell on credit. This view is enforced by the addition of the phrase “on the best terms possible.” In the following cases, wherein the assignee had authority to fix the “terms” of sale, it was held that a sale on credit was implied. Sumner v. Hicks, 2 Black, 532; Hutchinson v. Lord, 1 Wisconsin, 286; S. C. 60 Am. Dec. 381; Keep v. Sanderson, 12 Wisconsin, 352; Beus v. Shaughnessy, 2 Utah, 492; Moir v. Brown, 14 Barb. 39; Schufeldt v. Abernethy, 2 Duer, 533.

In the case at bar, the court below held that the assignment authorized a sale on credit, and that for that reason it was void against non-consenting creditors. Muller y. Norton, 19 Fed. Rep. 719. In fact it appears to be a settled rule in most of the States that an authority to the assignor to sell upon credit renders the deed of assignment void on its face. In addition to the above cited cases see McLeary v. Allen, 7 Nebraska, 21; Collier v. Davis, 47 Arkansas, 367; Bagley v. Bowe, 105 N. Y. 171. The ground of the ruling is that an authority to sell on credit tends to hinder or delay creditors, and is obnoxious to the statute of 13 Eliz., which is substantially in force in most of the States. See Jaffrey v. McGehee, 107 U. S. 365; Robinson v. Elliott, 22 Wall. 513; Means v. Dowd, 128 U. S. 273.

Under the statutes of Texas, and the decisions of her courts, a deed of assignment authorizing a sale upon credit is voidable by non-consenting creditors. When the assignment in question was made, there were two statutes in force which governed it, namely, the statute against fraudulent conveyances, substantially the statute of 13 Eliz., in force from an early day (Rev. Stats. 1879, Art. 2465, p. 363) and the act regulating assignments for the benefit of creditors, approved March 24, 1879 (Id. App. p. 5). The act of 1879 is silent as to the time, terms and manner of sale; and where the statute is silent, the assignee must be governed by the deed of assign

Opinion of the Court.

ment. Ogden v. Peters, 21 N. Y. 23; S. C. 78 An. Dec. 122; In re Lewis, 81 N. Y. 421; Adler v. Ecker, 1 McCrary, 256; Hopkins v. Ray, 1 Met. (Mass.) 79; Collier v. Davis, 47 Arkansas, 367. Wert v. Schneider, 64 Texas, 327, arose under the act of 1879. On the authority of this case we contend that the court would have held the assignment void on its face if it had found there authority to sell on credit. See Blum v. Welborne, 58 Texas, 157; Donoho v. Fish, 58 Texas, 164; Keating v. Vaughn, 61 Texas, 518; Keller v. Smalley, 63 Texas, 512. See also Bagley v. Bowe, ubi supra; Eicks v. Copeland, 53 Texas, 581, 590; Baldwin v. Peet, 22 Texas, 708; S. C. 75 Am. Dec. 806; Carlton v. Baldwin, 22 Texas, 724; Nave v. Britton, 61 Texas, 572. These Texas rulings were made under the statute against fraudulent conveyances, which is in force as to deeds of assignment under the act of 1879. La Belle Wagon Works v. Tidball, 59 Texas, 291. In view of the state of the law in Texas and other States, a Federal Court may hold this assignment void on its face, where the rights of non-resident creditors are involved. Schoolfield V. Johnson, 11 Fed. Rep. 297; Heelan v. Hoagland, 10 Ne braska, 511; Bonns v. Carter, 20 Nebraska, 566; Edwards v. Mitchell, 1 Gray, 239; Pike v. Bacon, 21 Maine, 280; S. C. 38 Am. Dec. 259; Raleigh v. Griffith, 37 Arkansas, 150; Churchill v. Whipple, 41 Wisconsin, 611. This case is distinguishable from Cunningham v. Norton. The contention there related to paying over to the debtor the surplus remaining after paying consenting creditors.

II. The deed of assignment is void as against non-consenting creditors, for the reason that it is not made to one assignee as required by the statute.

MR JUSTICE LAMAR, after stating the case as above reported, delivered the opinion of the court.

The validity of the above deed in view of matters apparent on its face constitutes the only question for consideration. We think that question is determined by the principle laid down in Cunningham v. Norton, 125 U. S. 77, which reversed

Opinion of the Court.

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the judgment on the authority of which the one now under review was rendered by the court below. That case involved, as does this, the validity of an assignment under the Texas statute just referred to, which was sought to be set aside on account of a provision in the deed alleged to be not in conformity with that statute. The assignments in the two cases are very similar; the main difference being, that the one in the Cunningham case contains two provisions, neither of which occurs in the instrument under consideration. The first of these provisions reserves to the assignor the surplus of the property assigned after the payment of all the debts of the consenting creditors. The second expressly authorizes the assignee to sell such property on credit, according to his discretion. This last provision, however, was not called to the attention of the court in that case. The main contention was, that the deed in controversy was rendered void by the clause directing the assignee to pay over to the assignor the surplus after paying in full all the creditors who should accede to the deed. This court decided that the said clause did not affect the validity of the assignment, but was itself alone invalidated by reason of its being in violation of the statute. The decision was based upon the general construction of the whole act taken together, in view of the main object designed to be subserved by it, and of the decisions of the Supreme Court of Texas upon many of its express provisions, in which line of decisions the court indicated its full concurrence. That policy the court declares to have been the appropriation of the entire estate of an insolvent debtor to the payment of his debts, and as a means thereto to favor assignments, and to give them such construction that they may stand rather than fall; that its manifest purpose was to provide a mode by which an insolvent debtor, desiring to do so, may make an assignment simple and yet effective to pass all his property to an assignee for the benefit of such of his creditors as will accept a proportionate share of the said property, and discharge him from their claims; that it further manifests the intention to transfer to the assignee all the property of the debtor for distribution among all the creditors; that no act of the assignee or of the

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