Ouerbacker v. Claflin

96 Ky. 235 | Ky. Ct. App. | 1894

JUDGE HAZELRIGG

delivered the opinion of the court.

Appellees, The H. B. Clafflin. Company, and others, are attaching creditors of R. Miller & Co., a firm of retail merchants lately engaged in business in Pine-ville, Kentucky. They obtained their attachments from the clerk without an independent order granting them on debts not due. The appellants are unsecured creditors of that firm who seek to vitiate the lien of the appellees, first, by showing that prior to the issual of the attachments the members of the firm, in contemplation of insolvency, and with the design to prefer one of their creditors to the exclusion of others, assigned a part of their assets, to-wit: An account on one of their customers, J. W. Johnson, for some three hundred and twenty-five dollars to appellee J. M. Purcifull, to whom they were indebted in the sum of two hundred and thirty-six dollars. Second, because there was no order granting the attachment independent of the order of attachment itself.

The chancellor sustained the attachments and gave priority to the appellees in the distribution of the funds in controversy.

(1.) At the time of the assignment of the claim on Johnson to Purcifull, which was on October 1,1892, the firm was hopelessly insolvent, and had become so by a systematic course of fraud practiced with the express intention of failing in business. In August and September, 1892, they bought large quantities of goods in New York and elsewhere on a credit, which they sold at once for cash at a large discount, and shipped secretly to parties in Memphis and Bowling Green. They also had their clerk to ship to friends in Cincinnati trunks of fine merchandise, with instructions to him to keep the transaction a secret. Every act, therefore, of these debtors is tainted with suspicion, and the assignment of a claim on a customer who was solvent and able to pay in a few weeks at most, and who did very shortly pay the claim to Purcifull, must be regarded as having been done in contemplation of the coming failure, and with a design to favor their friend and creditor, to whom they appear to have been under some obligation.

The integrity of the creditor Purciful, which is not doubted, or in any way assailed, does not enter into the transaction, nor does the smallness of the demand secured to him affect 1he principle involved. Where the transaction is insignificant, the design to prefer in contemplation of insolvency may not be so clearly perceptible; but if the general purpose of the debtor-be otherwise clear, as it is in this case, the transaction more easily falls within the provisions of the statute. AYe are convinced that the act of transfer ring this claim to Purcifull in discharge of this antecedent debt, operated as an assignment and transfer of all the property and effects of the debtors, and must inure to the benefit of all the creditors. To the extent Purcifull may have paid cash on the claim he will be protected.

(2.) In an action brought before the maturity of the debt sued on, the clerk of the court, in which it is pending, may grant an attachment against the property of the defendant if the petition show the existence of certain grounds enumerated in the Code. (Sections 237 and 238 and amendment of April 5, 1888.) This jurisdictional power is not dependent on the absence of the presiding judge of the county court or any circuit judge, but in this respect is unlimited. Precisely the same power is conferred on him by this amendment, as is conferred on him in section 196 of the Code in actions when the debt is due. It is impossible to detect any difference in the import of the language used in the section giving him power to make the order of attachment where the debt is due, and that given him in cases where the debt is not due.

There is no more reason, when the language of the section is considered, for the contention that in actions brought pursuant to sections 237-8, the clerk should make an independent order granting the attachment, than that he should do so when the action is brought under section 196, and certainly if the language of the sections does not require it, we can conceive of no reason why the clerk shall make an order to himself directing himself to do that which the statute empowers him to do in plain terms.

Under the conditions named in section 238, the clerk “may grant an attachment against the property of the defendant.” •

Under section 196 under certain conditions, “an order of attachmment shall be made by the clerk.” In both classes of cases, the writ issued by the clerk is the “order of attachment,” and is so designated in the sections of the Code applying to actions for debt due and not due.

Before the amendment of April, 1888, the clerk was without the power to make the order of attachment until permitted to do so by the order of another officer. There is now no reason conceivable why he may not make such order, as permission from another officer is no longer required. Such a construction would be purely technical, is not demanded by the letter or spirit of the law, and certainly there is no intelligent reason for requiring the clerk to direct an order to himself.

For the reasons indicated, however, the judgment is reversed, with directions to distribute the funds in the hands of the receiver on principles consistent with this opinion.