35 Kan. 535 | Kan. | 1886
The facts in this case, not contradicted, are as follows: A. D. McMillan and William Quigley, under the firm-name of A. D. McMillan & Co., opened a wholesale store in North Topeka, in this state, in August, 1882, for the sale of groceries, boots and shoes, hats and caps, and clothing. They continued in business until October 7, 1882, paying for only a few of the goods they bought, and owing for nearly all of them. On October 7, McMillan, for the purpose of defrauding the creditors of A. D. McMillan & Co., sold all of their goods in lump, without invoice, to Charles Collins, through his agent, William H. Frease, for $7,500. At the time of purchasing, Frease did not inquire of A. D. McMillan whether the firm owed anything, and asked nothing whatever about their financial condition. At this time A. D. McMillan & Co. were indebted to their creditors for goods purchased, over $18,000. The stock sold by McMillan to Collins on October 7th was worth about $12,000, although some of the estimates of the value of the stock at the time of the sale were as high as $15,000 to $18,000. Collins is a cattle-dealer, residing in Reno county, in this state, and a man of considerable wealth. At the time of the purchas'e he had $20,000 on deposit in one of the banks of his county. On and prior to October 7, William H. Frease was employed by Collins as general manager of a store owned by him at Nickerson, in this state. The store carried a stock of about $6,000 of general merchandise. On October 6, 1882, Frease received a telegram from A. D. McMillan to come to Topeka. He arrived there at three o’clock on the morning of October 7th, and met McMillan at the Gordon Hnuse. After breakfast he went oveir to North Topeka with McMillan, and bought for Collins all the goods in the store for $7,500. The bargain was concluded about eleven o’clock A. M-., McMillan accepting in payment of the stock the note of Charles Collins, executed by Frease, for $7,500, due in sixty days. Frease paid $200 to McMillan on the note. He took possession of the goods
As McMillan & Co. sold their stock of goods with the intent to defraud their creditors, if Frease, the agent of Collins,
■ Among other instructions prayed for by defendant below, was one to the effect that if Collins received notice that the sale of McMillan & Co. was fraudulent as to the creditors, he would be protected only to the amount and extent of the payment made before receiving such notice, and if he had taken goods from the stock so purchased exceeding in value the amount he had paid, and converted the same to his own use, he could not recover. This instruction was refused, and the court nowhere in its charge informed, the jury that Collins could not be a bona fide purchaser unless he paid the purchase-money before he had notice of the fraud of McMillan & Co. If his note had been negotiable and had passed out of the hands of McMillan & Co. before notice of the fraud to Collins, the result would have been the same as though Collins had actually paid the money at the time of his purchase of the stock of goods; but the consideration in money, note, or otherwise, must in all cases like this, to protect the purchaser against attaching creditors, be actually passed before notice. The judgment rendered for Collins was to the amount of $9,000. As the purpose of McMillan & Co. was to defraud their creditors, and as Collins' did not pay and has not yet paid all the purchase-money, even if he bought without notice of the fraudulent intent on the part of McMillan & Co. he is not a purchaser for a valuable consideration, as to the purchase-money not paid, and is not entitled as against the creditors of McMillan & Co., to the goods seized by the sheriff upon the attachments, and the judgment is therefore wholly unsupported by the evidence. The trial court refused to inform the jury of the effect of the failure of Collins to pay the purchase-money, and the judgment must be set aside.
Upon the argument, it was insisted by the counsel of Collins
As an apology for the failure of the trial court to properly direct the jury, and for the judgment in this case, counsel of Collins insist that the subsequent arrangement entered into between Collins and McMillan as to the disposition of the note' executed by Collins, was not set forth in the answer. This was not necessary. Collins alleged in his petition that he was the owner and in possession of a stock of goods and merchandise, which the sheriff of Shawnee county had seized and taken possession of in his official capacity, and demanded damages therefor in the sum of $25,000. The sheriff filed an answer denying the allegations of the petition, and setting up that the goods and merchandise seized by him were the. property of McMillan & Co., and that upon several writs of attachment, (giving the names of the parties thereto,) he seized and took possession of the goods and merchandise in dispute, and further alleged in his answer that the sale from McMillan & Co. to Collins was fraudulent and void, and made with the intent to defraud the creditors of McMillan & Co., and especially the creditors named in the attachment proceedings. In support of this answer, the sheriff had a right to prove that
A great many other questions are presented and discussed, but in view of the undisputed fact that the sale of McMillan & Co. was to defraud their creditors, and that Collins was not a purchaser for a valuable consideration as to the purchase-money not paid, it is unnecessary to' comment upon these matters.
The judgment of the district court will be reversed, and the cause remanded for a new trial.