50 W. Va. 660 | W. Va. | 1902
Isaac Prager and Maurice Prager, partners as Isaac Prager & Son merchants doing business in the City of Parkersburg, running three stores one known as the “Big Store” where their principal business was done on Market Street and on the op-osite side of the street their “Auction Store” and another store called “The Backet.” Though apparently doing a large and prosperous business they had become involved to the extent of total insolvency and on the 29th of December, 1896, made a deed of general assignment to Henry Keller, trustee, conveying “all and singular every and all fixtures, stock in trade, goods, wares, merchandise, book accounts, notes, bonds and evidences of debt, policies of insurance and all other property and assets of every kind, character and description owned or-by said-firm wherever the same may be situated including the unexpired terms of years or agreement for any premises occupied by said firm and especially and singular such property, goods, wares, merchandise and fixtures in and upon the premises occupied by said firm in what is known as the 'Smith Building/ Nos. 308 and 310, Market Street, 'Backet Store’ No. 313, Mar
On the 31st day of December, 1896, the First National Bank of Parkersburg filed the affidavit for attachment in the circuit court of Wood County of H. H. Moss, its cashier, and instituted suit in equity to recover its debt against said Isaac.Prager & Son, and sued out its attachment without bond and on that day levied same on the said goods in the three stores and also served the same on Henry Keller, the assignee in said deed of assignment, as being indebted to or having in his possession the effects of Isaac Prager & Son, and at the January rules, 1897, said bank filed its bill in said court against said Isaac Prager & Son, and Henry Keller as trustee and in his own right; said bill set up the claim of the said plaintiff’ being four notes of
At June Pules, 1897, plaintiff filed its amended and supplemental bill making the many creditors of the defendants Prager & Son parties defendant, including Julius Katzenstein, alleging
On the 30th of March, 1899, the defendants Isaac Prager & Son moved the court to quash the attachment sued out, on the ground that the affidavit filed in open court on March 14, 1899, was insufficient in form and substance and contains no facts warranting the issue of an attachment, which motion was sot down for argument and the same day Julius Katzenstein made a similar motion, which was also set down for argument, and said Katzenstein filed his demurrer to the original and amended and supplemental bills, and said Isaac Prager & Son filed their demurrer to the amended and supplemental- bill, which demurrers were set down for argument, and on the 5th day of January, 1900, the court overruled the demurrers to the original and amended and supplemental bills and the defendants Isaac Prager & Son, Julius Katzenstein, Henry Keller in his own right and as trustee, and Joe Keller tendered their separate answers to said amended and supplemental bill which were filed and the plaintiff took time to except and reply thereto and the court overruled the motion of Isaac Prager & Son as well as that of Julius Katzenstein to quash the attachment, and the said defendants then moved to quash the attachment for the reason that the supplemental affidavit was not sufficient in law, which motion was also overruled.
The answers of the defendants all deny fraud and all knowl
The first, third and fourth assignments can properly be considered together as they relate especially to the attachment and sufficiency of the affidavit and supplemental affidavit in support of the same. It appears from the praj^er of the original bill that one purpose of the bill was to enforce a purely legal claim under section 1 of page 106 Code. While many allegations in the bill would make it appear that the suit had a further purpose than simply to enforce said claim, and the prayer for general relief is broad enough to warrant the action of the court in overruling the demurrer and authorizing the filing of an amended and supplemental bill. As to whether the errors under consideration are well taken depends upon the sufficiency of the affidavit and amended affidavit for the attachment as well as the legality of the original levy of said attachment. First'as to the sufficiency of the original affidavit. In Hale v. Donahue, 25 W. Va. 414, (Syl. 1), it is held: “The grounds for the attachment are the conclusions of the law. The ‘material facts/ which the statue requires the affiant to state, are the allegations, from which the court may be properly authorized to conclude, that -the grounds .exist. Consequently an affidavit, which states that a debtor did an act or acts, which of them
Mr. Prager had a perfect right to take a trip to Florida, and there is no reason given why he should keep the plaintiff advised of his whereabouts. There is nothing contained in the affidavit to show there was anything improper in Katzenstein going to Parkersburg and attempting to save his debt, and the fact that Katzenstein had made oath in his affidavit for attachment that said Prager & Son had shipped-and were shipping their goods out of the state with intent to defraud their creditors did not avail the plaintiff in this case. The statement in the affidavit that said Isaac Prager & Son had withdrawn from the assets of said firm and had appropriated the same to their own use and in fraud of their creditors and were then con-
A further allegation in said supplemental affidavit is, that shortly prior to the date of said assignment, to-wit: in the month of December, 1896, the said firm shipped about seven-hundred dollars worth of goods to Max Adler at G-allipolis, Ohio, who was a fictitious person and was a mere dummy of said Isaac Prager & Son. This allegation fails to show that shipping was done for any fraudulent purpose or that the shippers knew that Max Adler was a fictitious person. In Delaplain v. Armstrong, 21 W. Va. 211, Judge SNTDee in delivering the opinion of the court, in treating of the allegations of the affidavit, says: “The first material fact is, ‘defendants are shipping staves and railroad ties out of this state, disposing of them without applying the proceeds of sale on this debt as promised by them’ ”, and says, “This statement amounts to an averment that the defendants have not paid the plaintiff’s debt as they promised to do. This is quite a common complaint. But it is certainly not of the character which authorizes an attachment. The fact that the defendants are shipping staves and ties out of the state and disposing of them does not show a fraudulent intent. The selling of staves and ties may, for all that appears, be the business in which the defendants are engaged; and if they can obtain a better price by shipping and selling them outside of the state than in it, this act is evidence of an honest rather than a fraudulent intent.”
It is then further alleged in the affidavit, “that just prior to making said deed of assignment and after 'having committed said fraudulent acts hereinbefore alleged, the said Isaac Prager left the State of West Virginia and went to Florida and thereby avoided the service of process in the suits of creditors against said firm.” There is nothing in either affidavit showing that any suits were instituted except the original affidavit mentions an attachment sued out by Katzenstein. Maurice Prager, the partner of said Isaac Prager, was left in charge of the stores, and the property left subject to the process of the court. The supplemental affidavit further alleges that Isaac Prager & Son
Another allegation in said affidavit is that shortly prior to said assignment said firm of Isaac Prager & Son discounted certain notes of customers of said firm at the "Wood County Bank in Parkersburg and thereby raised the sum of seven hundred dollars, which said firm of Isaac Prager & Son withdrew from the assets of said firm and concealed from their creditors and appropriated to their own use. This is the most definite allegation in the affidavit, but it is further alleged that the fact of this transaction was known to affiant at the time of making his former affidavit but through inadvertance was omitted from the same, so. that this was not a fact which had come to his knowledge after the filing of the original affidavit. It seems strange indeed that with all the material which enables the pleader to get up a bill of some forty pages filled with allegations of fraud, that he could not prepare an affidavit sufficiently definite and explicit to support an attachment, but such is the case. The said original and amended bills attack directly for fraud in fact the assignment of December 29, 1896, and the sale made by the trustee thereunder'to Katzenstein, which being sustained entitles the plaintiffs to a lien on the property so assigned and sold from the date of the filing of their original bill. Richardson v. Ralphsnyder, 40 W. Va. 15; Wallace v. Treakle, 27 Grat. 479; section 2, chapter 133, Code; Foley v. Ruley and Wilson v. Carrico decided at Fall term, 1901, this Court. And having the parties and the fund arising from the property sold under the order of court as well as the property assigned all before the court and no other creditor appearing in this suit to set up his claim, it becomes immaterial as to the sufficiency of the affidavits for the attachment as well as of the attachment, and the appellant is not prejudiced by the sale of the goods under the order of the court.
It is claimed by appellant and by Keller, the trustee, under
The fifth assignment of error, that the court erred in overruling the separate demurrers of Isaac Prager & Son, Henry Keller and Keller, trustee, and the appellant to the original and amended and supplemental bills. It is claimed that as the deed of assignment conveyed all the property of the assignors, wherever situated for the general benefit of all creditors without priority or preference and that it was in form and effect the only kind of deed of assignment which a debtor, under the assignment law of West Virginia, could make either under chapter 72 or chapter 74 of the Code, and does not appear fraudulent on its face, that the same cannot be attacked for acts of fraud committed previous or subsequent to the execution of said deed. Section 1, chapter 74, Code, provides that “Every gift, conveyance, assignment, or transfer of, or charge upon, any estate, real or personal, :|! * * with intent to delay, hinder, or defraud creditors, purchasers or other persons, of or from what they are or may be lawfully entitled to, shall as to such creditors, purchasers or other persons, their' representatives or assigns, be void.” In Loos v. Wilkinson, 110 N. Y. 195, at page 210, the court say: “Frauds upon tire assignment either by the assignor or assignee do not necessarily avoid the assignment but that may be considered in determining whether there was any fraud in the assignment and frequently furnish very convincing and sometimes very conclusive evidence upon that point.” And in Aaronson v. Deutsch, 24 Fed. Rep. 465, it is held: “The rule that a deed valid in its inception will not be rendered invalid by any subsequent fraudulent or illegal act of the partios has no application when the fraudulent or illegal act is the consummation of an illegal agreement made contemporaneously
Schultz v. Hoagland, 85 N. Y. 464. In Parker v. Valentine, 27 W. Va. 677, it is held: “Fraud may be inferred from the facts and circumstances of the case and if these facts and circumstances are such as to make a prima facie'ease of fraudulent intent, they are to be taken as conclusive evidence of such intent, unless rebutted by other facts and circumstances in the case.” And in the case of Douglass v. Laird, 37 W. Va. 687, a deed of trust was held to be fraudulent but not on its face, and the trustee held to have notice of the grantor’s fraudulent intent. In Richardson v. Ralphsnyder, cited (Syl. 4), “Where an assignment of personal property is made'in fraud of creditors, they, or any of them, may, in a court of equity, have the same set aside. The creditor who first files his bill obtains thereby a priority, and is entitled to be first paid from the proceeds of the sale of the property, if there are no valid prior liens.” Reilly v. Barr, 34 W. Va. 95; Sturm v. Chalfant, 38 W. Va. 248. It is contended by appellees that by the act of 1891, amending section 2, chapter 74, Codé, “the whole policy of the laws relating to ‘Insolvent Debtors’ was changed.” The change there made related solely to transactions between debtor and creditor and was intended to prevent the preference of creditors and was not intended to, and did not affect section 1, chapter 74, relating to fraudulent conveyances. Section 2, chapter 133, Code, provides: “A creditor, before obtaining a judgment or decree for his claim, may institute any suit to avoid a gift, conveyance, assignment, or transfer of, or charge upon, the estate of his debtor, which he might institute after obtaining such judgment or decree, and he may in such suit have all the relief in respect to said estate, for the claim, which he may be entitled to recover.” In Bank v. Parsons, 42 W. Va. 137, under the ruling of which appellant claims, if the assignment is set aside it would result in giving plaintiff an illegal preference under section 2, chapter 74, Code. The question alone of unlawful preference was there involved and S}d. 5, “The creditor who is first to assail the fraudulent conveyance of an insolvent debtor does not thereby acquire as the reward of his diligence a preference over the other creditors,” could only apply in such case as was there before the court, and cannot be construed to apply in a proceeding to set aside a gift, conveyance, assign
The bill having sufficiently charged fraud and the amended and supplemental bill being based upon the former and to carry out the same purpose was properly filed and were both good on demurrer.
The sixth assignment that the decree of April 23rd erroneously sustained the plaintiff’s exceptions to the several answers of appellant, and Henry Keller and Henry Keller, trustee, and of Isaac Prager & Son because appellant says the answers were full, complete and adequate answers to every material; allegation of the bill. As to exception No. 4 to the answer of appellant, the allegation -of the bill was, that the debts of the appellant were fictitious as to the greater part'thereof, and that because of the fraudulent concealment of the books and accounts of said assignee it was not advised how much said firm did owe said ICatzenstein, if anything, but that they did not owe him the sum of thirty-seven thousand, nine-hundred and eighty-three dollars, the amount for which judgment by default was obtained and called for full proof of the exact amount, if any, ovred on said debt at the time of the assignment with all particulars in regard thereto. Eespondent answered denying that the deed was fictitious that he did not know what the books of account of the firm showed in relation thereto, but to the best of his knowledge and belief the firm owed him every dollar of the amount for which he recovered judgment; that he still held the evidence of the debt set forth in his declaration in his suit brought against the firm; that said-debt was in part of long
The seventh assignment that “Court erred in striking out the amended answer of Henry Keller and Henry Keller, trustee, the answer being filed in pursuance of the rule of the court and the'same being properly verified.” Keller was charged in the bill with being a conspirator and with many specified acts on his part, especially in his capacity of trustee, which required to be answered and explained by him personally under his oath; the bill being verified by the oath of the cashier of the plaintiff bank; verification by defendant’s attorney could not properly be substituted, the conscience of the defendant trustee was not in the keeping of his attorney, nor could it be reached through an answer verified by his attorney, and the plaintiff was entitled to his personal response.
As to the eighth assignment which relates to the final decree of January 9th, it was error to decree that the general deed of assignment of December 29, 1896, Avas made with intent to delay, hinder and defraud creditors; that the sale of the goods by the trustee, Keller, to Katzenstein was made for the same purpose, both of which were erroneously set aside as fraudulent. Perry on Trusts, s. 590, says “general assignments will be void if affected by actual fraud: as if the purpose is to hinder, delay, and defraud the creditors, or any one or more of them.” Foley v. Bitter, 34 Md. 646. That the purpose of the defendants, Prager & Son and Katzenstein, with the full knowledge and aid of the defendant, trustee Keller, was to get the goods into the hands and control of the said Katzenstein, thence indirectly into the hands of the Pragers to the exclusion of all other creditors is well demonstrated from the facts and circumstances and evidence in the case. Isaac Prager & Son AArere doing a large and apparently prosperous business in Parkersburg carrying a heavy stock of goods in one store called “The Big Store” from which they supplied goods to the amount of five thousand dollars or more to a store called “The Backet” and also carried on an auction store. It is admitted as well as proven that shortly before the holidays in 1896 they bought large stocks of goods and placed in said stores and made, what is termed in these proceedings a slaughter sale, selling goods for cash, taking in large sums of money and discounted claims against citizens of Parkersburg for cash or notes, some of which notes they ad
Another; phase of the case which makes it look very suspicious on the part of Keller as being in collusion with Katzenstein and the Pragers is the -fact of his pushing through a sale of the goods when there were clouds upon the title in the way of suits pending and attachments levied upon the goods. In Rosette v. Fisher, 11 Grat. 498, the court says: “A trustee in a deed of trust is the agent of both parties and bound to act impartially between them; nor ought he to permit the urgency of the creditors to force the sale under circumstances unjust to the debtor at an inadequate price.” In Livey v. Winton, 30 W. Va. 554, at page 560, in referring to the duties of trustees, says; "He may and ought, on his own motion, to apply to a court of equity to remove impediments to a fair execution of his trust, to remove any cloud hanging over the title, 'and to adjust accounts, if necessary, in order to ascertain the actual debt which ought to to be raised by the sale, or the amount of prior incumbrances; and he will be justified in delaying, for these preliminary purposes, the sale of the property, until such resort may be had to a court of equity.” It is charged in the bill that about the time of .the assignment four wagon loads of goods were taken from the store of the Pragers to Henry Keller’s. While this is denied in the answer of Keller, it is proven by witness George N. Pribble, who was then a salesman in Kellar’s store, that four wagon loads of goods were brought to Henry Keller’s and divided and a part of them taken by Joe Keller and a part left at Henry Keller’s store where they were put in stock and sold in the regular course of business; witness says this was about the time of the assignment but could not say whether it was before or after. In Blackshire v. Pettit, 35 W. Va. 547, (Syl. 2) it
It is charged by plaintiffs that the claim of Katzenstein against the Pragers was fictitious as to a large part thereof, and this is borne out by the action of Katzenstein himself. When he sued out his attachment on the 29th of December, 1896, he filed his affidavit, in which he says: “That the amount, at the least, which affiant believes he is entitled to recover in said action is the sum of forty-one thousand nine hundred and eighty-six dollars.” He afterward, on the 17th day of February, 1897, took judgment by default for the sum of thirty-seven thousand nine hundred.and eighty-three dollars and eight cents. It is hardly probable that four thousand dollars of his debt had been paid in the meantime. Why he should make this abatement is not explained. lie could just as well have taken his judgment for the amount claimed in his affidavit for attachment, as the defendants entered no appearance and made no defense. And there was other evidence tending to show the fictitiousness of the claim of Katzenstein.
It is complained that the court erred in considering on the hearing of the cause the illegal evidence of plaintiff, including the exhibits therewith and particularly the exhibits of testimony taken in other causes to which appellant and many of the other parties to this suit were not parties. The court did not pass upon appellant’s objections and exceptions thereto and it does not appear that the court considered at the hearing any of such testimony which was illegal, and it is presumed to have ruled out all which was illegal or improper to be considered, especially as the decree is so thoroughly supported by the facts and circumstances and by the evidence, which is unquestioned. “Wren a case is tried by the court in lieu of a jury, it is not error in the court to hear illegal testimony, the court being fully competent to discard the illegal evidence.” Wells-Stone Mercantile Co. v. Truax, cited; Mutter v. Sydanstricker, 11 W. Va. 535; State for lose of Crumbacker v. Seabright, 15 W. Va. 590; Abrahams v. Swann, 18 W. Va. 274. There being no reversible error the decrees complained of are affirmed.
Affirmed.