210 P. 460 | Mont. | 1922
delivered the opinion of the court.
In this case it appears that on the twenty-third day of October, 1916, in the city of Butte, the plaintiff, while walking on a street, was struck and injured by an automobile belonging to J. A. Riddell, in which the latter was riding, then being driven by his agent and servant, one Roy Williams. At the time of the accident J. A. Riddell was, and for more than ten years theretofore had been, personally conducting business in Butte under the name and style of “Riddell Paint & Art Company.” For at least one year prior to this accident J. A. Riddell, being in poor health, had in contemplation incorporating his _ business so as to be relieved of active management thereof, avoid administration on his estate, and by a gift of portions of the authorized capital stock in the contemplated corporation to his son, A. M. Riddell, and P. C. Dietler, trusted and faithful employees, recognize and compensate them for many years of service ren
On December 8, 1916, J. A. Riddell, being indebted to his wife, the defendant Kate Riddell, for money advanced by her and used in the business, aggregating about $15,000, made transfer to her of 249 shares of the capital stock by him owned, and held in the corporation, and on June 27, 1917, assigned and transferred to her the one remaining share of stock by him held in the corporation. J. A. Riddell personally paid all of the hospital bills of the plaintiff occasioned by the accident, and, when the corporation took over his business, it assumed all of the outstanding obligations of the business, but no indebtedness to the plaintiff was considered or recognized, nor was the Bulk Sales Law complied with.
The plaintiff never made any claim or demand against either J. A. Riddell or the corporation until the institution of an action for damages by him in the district court of Silver Bow county on July 17, 1917, wherein J. Alexander Riddell, doing business as the “Riddell Paint & Art Co.,” and Roy Williams, were made defendants. It will be noted that the business was incorporated just one week after the accident, and that the action was not commenced until after J. A. Riddell had
And as conclusions of law the court found: That the judgment recovered by plaintiff on the fifteenth day of November, 1917, is a lien upon the corporate property; that the transfer of the property to the corporation obstructs and interferes with the right of plaintiff to levy upon and sell at execution sale the property affected by the transfer; that the transfer was and is void and should be set aside as to the plaintiff; that execution be levied upon the property of the Riddell Paint & Art Company, a corporation, or so much thereof as may be sufficient to satisfy plaintiff’s judgment against Joseph Riddell and Roy Williams, and if the judgment may not be so satisfied, that the transfer of 150 shares of corporation stock to A. M. Riddell be set aside and subjected to execution to satisfy plaintiff’s judgment; that the interest of Kate Riddell in 249 shares of the corporate stock is subject to execution to satisfy the claim of plaintiff against Joseph Riddell, and the transfer of the shares of stock to her is void and is set aside as to the plaintiff; that all of the corporate property or so much thereof as may be necessary to satisfy plaintiff’s judgment is set aside for the payment thereof, free from any right or lien of defendants.
This appeal is from the judgment; the evidence being incorporated in the transcript by a bill of exceptions.
It is contended by the plaintiff that the bill of exceptions is not properly a part of the record on appeal, and motion is made to strike the same from the record on the ground that upon an appeal from the judgment alone the court cannot review the insufficiency of the evidence. There is no merit in the motion. The statute expressly authorized this character
This statute was in effect when the appeal in this case was perfected (March 16, 1921), the repeal not having become operative until July 1, 1921. (Sec. 20, Chap. 225, Laws 1921.) In applying this section of the statute, the same being an amendment (sec. 1, Chap. 42, Laws 1907) of section 1736 of the Civil Code of Procedure of the Annotated Codes of 1895, Mr. Justice Holloway, speaking for this court, said: “It was doubtful whether a bill of exceptions settled after trial could be used on appeal from a final judgment in any event, and, apparently for the purpose of making definite that which was uncertain, section 1736 was amended in 1907 (Laws 1907, Chap. 42). The amended Act made the record on appeal from a final judgment to consist of the notice of appeal, the judgment-roll or such parts of it as might be necessary to be considered, and any bill of exceptions upon which the appellant relies. As if io leave no possible room for doubt as to what was intended, the amended Act provides further: ‘Any statement of the ease settled after the decision of the motion for a new trial, when the motion is made upon the minutes of the court, as provided for in section 6796 (1173), or any bill of exceptions settled as provided for in section 6787 (1154) or in section 67,88 (1155), or used on the motion of a new trial,
As we view this appeal, there are but two questions presented determinative thereof, namely: (1) Does the Bulk Sales Law (sees. 8607-8611, Rev. Codes 1921) apply to the transfer made by J. A. Riddell of his business and property connected therewith to the corporation, as respects the unliquidated claim of the plaintiff at the time of such transfer? (2) Was the transfer of the business and property made by J. A. Riddell to the corporation a fraud upon the plaintiff?
The case was briefed and argued orally principally upon the question of the applicability of the Bulk Sales Law.
1. If the Bulk Sales Law is properly applicable to the plaintiff’s demand as an existing creditor at the time of the transfer of the property to the corporation, then a fraud in law was perpetrated upon the plaintiff, and defendant corporation is liable to pay the amount of the judgment, as the 'statute requiring a verified listing of the creditors by the seller was not complied with at the time the transfer was made to it. The statute makes it “the duty of every person who shall bargain for or purchase any stock of goods, wares, or merchandise in bulk, for cash or on credit * # * to demand of and receive from such vendor” a verified written statement containing “the names and addresses of all the creditors of said vendor, to whom said vendor may be indebted, together with the amount of the indebtedness due or owing, and to become due or owing, by said vendor to each of said creditors.” And in the form of oath prescribed to be attached to such list of creditors, made by the vendor it is recited: ‘ ‘ That the foregoing statement contains the names of all the creditors
The failure of the buyer of a stock of merchandise in bulk to comply with the provisions of the statute regulating such sale converts him into a trustee of the property bought, to the extent at least of existing creditors of the vendor at the time of the sale. (Wheeler & Motter Mer. Co. v. Moon, 49 Mont. 307, 317, 141 Pac. 665; Kohn v. Fishback, 36 Wash. 69, 104 Am. St. Rep. 941, 78 Pac. 199.) And such a sale made without compliance with the law is a fraud upon the creditors of the vendor. Question arises as to whether plaintiffs’ demand
No one would be enabled to sell his business because of possible liability arising in tort, and it would be utterly impossible for the vendee to comply with the provisions of the Act requiring him to see to it “that the purchase money # * # is applied to the payment of the bona fide claims of the creditors of the vendor.” {Id., see. 8608.)
2. As to whether the transfer of the business and property constituted a fraud in fact upon the plaintiff, we must look to the facts disclosed at the trial. Actual fraud is always a question of fact. (Sec. 7482, Rev. Codes 1921.) Fraud cannot be presumed. As any other fact, it must be established by competent evidence. One who attacks the validity of a conveyance must assume in limine the burden of proof, even though it arose out of dealings between husband and wife. A mere suspicion that it is fraudulent is not sufficient to overturn it. (Wilson v. Harris, 21 Mont. 374, 54 Pac. 46.) “In the absence of fraud, every contract of a debtor is valid against all his creditors, existing or subsequent, who have not acquired a lien on the property affected by such contract.” (Sec. 8600, Rev. Codes 1921.)
“A debtor may pay one creditor in preference to another, or may give to one creditor security for the payment of his demand in preference to another.” (Id^ sec. 8601.)
“A debtor, within the meaning of this chapter, is one who, by reason of an existing obligation, is or may become liable to pay money to another, whether such liability is certain or contingent.” (Id., see. 8598.)
“A creditor, within the meaning of this chapter, is one in whose favor an obligation exists, by reason of which he is, or may become, entitled to the payment of money.” (Id., sec. 8599.)
“One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he has some other or better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would othewise have had it.” (Id., see. 7887.)
“Either husband or wife may enter into any engagement or transaction with the other, or with any other person, respecting property, which either might, if unmarried, subject in trans
In equity this court will go further than merely a consid eration of the correctness of the findings of fact and legal conclusions made by the trial court upon which its judgment is based; and where it satisfactorily appears, as in this instance, that the execution of the Dietler note to the corporation was a fraud upon the plaintiff, it will be applied in satisfaction of the plaintiff’s judgment.
The evidence being all before us, we are authorized in equity to make independent findings of fact, respecting the rights of the parties overlooked by the trial court, and to direct entry of a proper judgment. (Sec. 8805, Rev. Codes 1921; Walsh v. Hoskins, 53 Mont. 198, 162 Pac. 960; Barnard Realty Co. v. City of Butte, 55 Mont. 384, 177 Pac. 402; Lowry v. Carrier, 55 Mont. 392, 177 Pac. 756.)
¥e have carefully weighed and viewed all of the evidence, and do not consider that the findings as made by the district court are warranted. A review of the evidence further than that already appearing in the recital of facts would serve no useful purpose. The record does not disclose the proceedings on organization of the corporation, or those had on transfer of the business and property; but it does conclusively appear that at the time of the organization of the cor
Modified.