Court
United States court for the Indian Territory, Second Judicial Division
Filed
Decided
Judge
Mr. Justice Harlan
Posture
Judgment entered for defendant after jury verdict
Plaintiff in error (1)
Grimes Dry Goods Company
Mr. G. B. Denison, Mr. N. B. Maxey
v.
Defendant in error (1)
Malcolm
Mr. A. G. Moseley
Other parties: Paul Waples — Interpleader
Overview
The judgment of the Circuit Court of Appeals is affirmed. No error found in the record.
Case summary
Grimes Dry Goods Company sued Malcolm to recover debt for goods sold, obtaining attachment against his property. Paul Waples interpleaded, claiming possession under an instrument executed by Malcolm that conveyed property with condition for payment of debts within 60 days. The central dispute was whether this instrument was a mortgage or an assignment for benefit of creditors. The trial court found it was a mortgage, and jury verdict favored defendants. The Circuit Court of Appeals affirmed, and the Supreme Court affirmed, holding the instrument was a mortgage under Arkansas law because it reserved an equity of redemption. The Court also rejected challenges to evidentiary rulings, jury procedures, and refusal to submit special questions.
Abstract
Plaintiff sued to recover debt for goods sold and obtained attachment against defendant's property, prompting an interpleader claim asserting possession under an instrument conveying property conditioned on debt payment within 60 days. The central dispute concerned whether the instrument constituted a mortgage or an assignment for benefit of creditors, with courts holding it was a mortgage under state law due to reservation of an equity of redemption. Challenges to evidentiary rulings, jury procedures, and refusal to submit special questions were rejected, affirming the judgment.
Opinion of the court
Majority
opinionMr. Justice Harlanjoined by All justices
opinionMr. Justice Harlanjoined by All justices
- Instrument is mortgage, not assignment
- Submission of special questions within court's discretion
- Mortgagor's statements after execution inadmissible
- No error in jury verdict procedure
Jurisdiction
not challengedStatutory basis
Act of Congress of May 2, 1890, c. 182, § 31, 26 Stat. 81, 94
Subject matter
Error to the Circuit Court of Appeals for the Eighth Circuit
Jurisdictional facts
- The case originated in the United States court for the Indian Territory
- Appeal taken to the United States Circuit Court of Appeals for the Eighth Circuit
- Writ of error prosecuted to the Supreme Court
Procedural posture
Posture at trial
Judgment entered for defendant after jury verdict
Posture on appeal
Direct appeal from Circuit Court of Appeals
Preserved issues
- Whether instrument is a mortgage or assignment
- Admissibility of evidence
- Jury verdict procedure
Subsequent history
Petition for rehearing
not filed
Petition for certiorari
not filed
Legal categories
Business
Case record
Full case name
GRIMES DRY GOODS COMPANY v. MALCOLM
Docket number
No. 60
Court
United States Supreme Court
Trial court
United States court for the Indian Territory, Second Judicial Division
Trial court judge
Not specified
Filed
Decided
Opinion author
Mr. Justice Harlan
Opinion type
published
Precedential status
precedential
Judges on panel
Mr. Justice Harlan
Issues & holdings
4
Issues raised
4
affirmed
4
Holdings
1
Whether the instrument executed by Malcolm on January 19, 1891, is a deed of trust in the nature of a mortgage or a deed of assignment for the benefit of creditors
affirmed
Standard of review
de novo
Disposition rationale
Instrument is a mortgage, not an assignment, as it reserves equity of redemption
Preservation
Issue preserved for review
2
Whether trial court erred in refusing to submit special questions to jury
affirmed
Standard of review
abuse of discretion
Disposition rationale
Submission of special questions is within court's discretion
Preservation
Issue preserved for review
3
Whether trial court erred in excluding evidence of Malcolm's statements about his intent in executing the instrument
affirmed
Standard of review
abuse of discretion
Disposition rationale
Mortgagor's statements after execution cannot affect mortgagee's rights
Preservation
Issue preserved for review
4
Whether trial court erred in handling jury verdict when juror expressed desire to change vote
affirmed
Standard of review
abuse of discretion
Disposition rationale
No error since evidence would have supported directed verdict for defendant
Preservation
Issue preserved for review
Holdings of the court
Nature of the instrument
The instrument is a deed of trust in the nature of a mortgage, not an assignment for benefit of creditors
Under Arkansas law, test is whether instrument makes absolute appropriation of property for debt payment without reserving equity of redemption. This instrument reserves right to redeem within 60 days.
unanimousbinding precedent
Submission of special questions
Trial court did not err in refusing to submit special questions to jury
Statute gives court discretion; common law powers of judge not fettered by practice acts
unanimousbinding precedent
Admissibility of evidence
Trial court properly excluded evidence of mortgagor's statements about intent
Mortgagor's statements after execution cannot affect mortgagee's rights
unanimousbinding precedent
Jury verdict procedure
No error in court's handling of jury verdict
Evidence would have supported directed verdict for defendant, so plaintiff suffered no injury
unanimousbinding precedent
Error analysis
- Trial court refused to submit special questions to jury — procedural · no error foundSubmission within court's discretion · not applicable
- Trial court excluded evidence of Malcolm's statements about intent — evidentiary · no error foundStatements irrelevant to mortgagee's rights · not applicable
- Trial court mishandled jury verdict when juror expressed desire to change vote — procedural · no error foundEvidence would have supported directed verdict for defendant · harmless
Statutory interpretation
2Statute
Arkansas statute relating to assignments (Mansfield's Digest, 1884, p. 219)
Question
What constitutes an assignment versus a mortgage
Court's reading
Assignment requires absolute appropriation of property for debt payment without equity of redemption; mortgage reserves right to redeem
Canons applied
Plain meaningState court interpretation binding
Statute
Arkansas statutes relating to pleading and practice (§§ 5141-5142)
Question
Whether court must submit special questions to jury
Court's reading
Submission is within court's discretion
Canons applied
Plain meaningDiscretionary authority
Burden of proof
Prosecution burden
Not applicable (civil case)
Defence burden
Not applicable
Burden met
true
Standards of review
- Interpretation of instrument as mortgage or assignment — de novo Legal interpretation of documents reviewed de novo
- Submission of special questions to jury — abuse of discretion Trial court discretion in procedural matters
- Evidentiary rulings — abuse of discretion Trial court discretion in admitting evidence
- Jury verdict procedure — abuse of discretion Trial court discretion in managing jury
Timeline
Procedural path
Property conveyanceTrial conductedJury verdict returnedJuror hesitationVerdict acceptedCase arguedDecision issued
5
Events
2,142
Days, incident to ruling
—
Span
factual eventcited in opinion
Malcolm executed instrument conveying property to Paul Waples with condition for payment of debts within 60 days
Central document in dispute over whether it constitutes mortgage or assignment
Whether instrument is mortgage or assignment
trial eventcited in opinion
Trial conducted in United States court for Indian Territory
Outcome: Jury verdict for Malcolm on attachment issue and for Waples regarding property
Trial court judgment entered based on jury verdict
Jury verdict procedure
trial eventcited in opinion
Jury returned sealed verdict; juror Sheimer expressed desire to change vote; court ordered verdict read and jurors polled
Outcome: Verdict accepted despite juror's hesitation
Procedure challenged on appeal regarding jury verdict acceptance
Jury verdict procedure
appeal eventcited in opinion
Case argued and submitted to Supreme Court
Oral argument before Supreme Court
appeal eventcited in opinion
Supreme Court decision issued affirming Circuit Court of Appeals
Outcome: Judgment affirmed
Final disposition of case
Facts & evidence
Incident
Date
Location
Durant, Indian Territory
Key facts
7 facts- Grimes Dry Goods Company sued Malcolm to recover $1845 for goods sold
- Plaintiff obtained writ of attachment against Malcolm's property
- Waples interpleaded claiming possession under instrument executed by Malcolm on January 19, 1891
- Instrument conveyed property to Waples with condition that if Malcolm paid debts within 60 days, conveyance would be void
- If Malcolm failed to pay, Waples was to sell property and apply proceeds to debts
- Plaintiff claimed instrument was fraudulent assignment, Waples claimed it was mortgage
- Jury found for Malcolm on attachment issue and for Waples regarding property
Disputed questions
- Whether instrument was mortgage or assignment
- Whether instrument was fraudulent
- Whether Waples had rightful possession
Procedural history
4 steps- Action filed in United States court for Indian Territory
- Trial resulted in judgment for defendants
- Appeal to Circuit Court of Appeals for Eighth Circuit affirmed trial court
- Writ of error to Supreme Court
Evidence in the record
Testimonial
- Testimony regarding intent of parties
- Malcolm's proposed statement about intent
Documentary
- Instrument executed January 19, 1891
- Schedules A and B listing creditors
Challenged
- Evidence type: Testimonial evidence of Malcolm's statements · Challenge basis: Relevance and effect on mortgagee's rights · Trial court ruling: excluded · Reasoning: Mortgagor's statements after execution cannot affect mortgagee's rights · Challenged on appeal: true · Appellate outcome: affirmed
Jury
Verdict
For Malcolm on attachment issue; for Waples regarding property
Verdict date
1892-09-24
Jury instructions given
- Court's charge to jury
Jury instructions requested
- Special questions presented by plaintiff
Jury questions
- Juror Sheimer asked if he could change vote
Jury instructions challenged
- [object Object]
Objects of relevance
Storehouse and fixtures attachedStock of general merchandiseGin house and saw mill
Policy considerations
- Importance of respecting state law interpretations
- Need for certainty in commercial transactions
- Judicial discretion in trial management
Authorities
Cited authorities (9)
Rainwater-Boogher Hat Co. v. Malcolm, 10 U. S. App. 249; 2 C. C. A. 476; 51 Fed. Rep. 731, 737
followedprecedentPrior case involving same instrument, held to be mortgage
Richmond v. Mississippi Mills, 52 Arkansas, 31
appliedquotedprecedentArkansas precedent defining test for assignment vs. mortgage
Fecheimer v. Robertson, 53 Arkansas, 101, 104
appliedquotedprecedentArkansas case affirming Richmond test
Robson v. Tomlinson, 54 Arkansas, 229, 233-234
appliedquotedprecedentArkansas case clarifying mortgage vs. assignment distinction
Appolos v. Brady, 4 U. S. App. 209; 49 Fed. Rep. 401, 403
appliedquotedprecedentSummarized Arkansas test for assignment vs. mortgage
Little Rock & Fort Smith Railway v. Pankhurst, 36 Arkansas, 371, 378
followedprecedentHeld submission of special questions discretionary under Arkansas statute
Mutual Accident Association v. Barry, 131 U. S. 100, 119
followedprecedentHeld practice acts do not fetter judge's common law powers
Winchester & Partridge Mfg. Co. v. Creary, 116 U. S. 161, 165
followedprecedentHeld mortgagor's statements after execution cannot affect mortgagee's rights
Delaware, Lackawanna &c. Railroad Co. v. Converse, 139 U. S. 469, 472
appliedprecedentSupported directed verdict standard
Related cases (9)
Rainwater-Boogher Hat Co. v. Malcolm, 10 U. S. App. 249; 2 C. C. A. 476; 51 Fed. Rep. 731, 737
prior appealHeld same instrument was mortgage
Richmond v. Mississippi Mills, 52 Arkansas, 31
precedentDefined test for assignment vs. mortgage
Fecheimer v. Robertson, 53 Arkansas, 101, 104
precedentAffirmed Richmond test
Robson v. Tomlinson, 54 Arkansas, 229, 233-234
precedentFurther clarified test for mortgage vs. assignment
Appolos v. Brady, 4 U. S. App. 209; 49 Fed. Rep. 401, 403
precedentSummarized Arkansas test
Little Rock & Fort Smith Railway v. Pankhurst, 36 Arkansas, 371, 378
precedentHeld submission of special questions discretionary
Mutual Accident Association v. Barry, 131 U. S. 100, 119
precedentHeld practice acts do not fetter judge's common law powers
Winchester & Partridge Mfg. Co. v. Creary, 116 U. S. 161, 165
precedentHeld mortgagor's statements after execution cannot affect mortgagee
Delaware, Lackawanna &c. Railroad Co. v. Converse, 139 U. S. 469, 472
precedentSupported directed verdict standard
Statutes
- Act of Congress of May 2, 1890, c. 182, § 31, 26 Stat. 81, 94 (applying Arkansas law to Indian Territory)
- Arkansas statute on assignments (Mansfield's Digest, 1884, p. 219)
- Arkansas statutes on pleading and practice (§§ 5141-5142)
Standards & doctrines
- De novo review for instrument interpretation
- Abuse of discretion for trial court rulings
- Arkansas test for mortgage vs. assignment from Richmond case
Legal principles applied
- Arkansas law governs interpretation of instruments in Indian Territory
- Mortgage reserves equity of redemption; assignment does not
- Trial court has discretion over procedural matters like special verdicts
Notable quotes
“The fundamental question in this case is whether the instrument of January 19, 1891, executed by Malcolm is a deed of trust in the nature of a mortgage, or a deed of assignment for the benefit of creditors.”majority — Introduction of central legal issueFrames the entire appeal
“The controlling guide, according to the previous decision of the court, is, was it the intention of the parties, at the time the instrument was executed, to divest the debtor of the title and so make an appropriation of the property to raise a fund to pay debts?”majority — Quoting Arkansas precedent on mortgage vs. assignmentStates key legal test
“Clearly, this instrument, upon its face, is nothing more than a security for certain debts — an equity of redemption remaining in the debtor.”majority — Court's analysis of the instrumentConclusion that instrument is mortgage
Index terms111
Summary terms
Legal mechanisms
Various actions
Various actors
Legal concepts
Legal outcomes
Legal issues
Legal procedures
Legal remedies
Legal evidence
Legal arguments
Legal defenses
Legal penalties
Legal procedural steps
Geo locations
Judges
Attorneys
Procedural terms
Substantive offenses
Entities and documentation
Legal actions
Action type
affirmed
Target
Judgment of Circuit Court of Appeals
Appealed from
Circuit Court of Appeals for the Eighth Circuit
Context
Supreme Court affirms lower court judgment that instrument is mortgage and trial court rulings were proper
Scope
full
Disposition vote
unanimous
Action type
affirmed
Target
Trial court judgment
Appealed from
United States court for Indian Territory
Context
Circuit Court of Appeals affirmed trial court; Supreme Court affirms that affirmation
Scope
full
Disposition vote
unanimous
Search facets
Parties
Judges
Harlan
Courts
Locations
Practice areas
Other index terms