Singletary v. Boerner-Morris Candy Co.

| Ky. Ct. App. | Oct 2, 1908

Opinion op the Court by

Judge Lassing —

Reversing.

Appellee and 15 other firms, claiming to be creditors of tbe firm of B. A. Boone & Son, filed tbeir joint petition in the Hickman circuit court against Boone & Son and Flint Singletary, J. M. Ringo, and J. T. Hile. Eight of the plaintiffs were asserting claims of less than $50 each, while the remaining 8 plaintiffs’ claims were each more than $50, but less than $800. The petition, after asserting the claims in favor of each plaintiff, alleged that on the 27th day of April, 1906, B. A. Boone & Son, without notice-to the plaintiffs, sold their stock of goods in hulk to the defendant Flint Singletary, in violation of the provisions of an act of the Legislature which became a law March 8, 1904. They claim that under this law the sale was void as to them. They prayed judgment-against Boone & Son for their debts, and asked that the stock of goods and merchandise, which they alleged to be worth $2,000, be subjected to the payment of their debts. The petition further alleged that Boone & Son had paid to J. M. Eingo the sum of $1,000 in satisfaction of an old debt, for the purpose of preferring him to the exclusion of other creditors, and that a note of $950 had been fraudulently assigned and transferred by Boone & Son to J. M. Eingo and J. T. Hile for a similar purpose; that this latter transaction, to wit, the payment of the $1,000 and the transfer of the $950 note, was in violation of the act of 1856, and fraudulent in law. They prayed that the transactions between Boone & Son and Eingo and Hile be declared preferential, and that they be required to pay any money which they had received from Boone & Son, within the six months next preceding the institution of their suit, into court for the-benefit of all of the creditors of Boone & Son. The-defendants Boone & Son answered, admitting the indebtedness to most of the plaintiffs as alleged, and pleaded, further, that the payment to J. M. Eingo of $1,000 was in satisfaction of a mortgage debt against the stock of goods which they sold to Flint Singletary; that this said mortgage had been made long-before the purchase-by them from the various plaintiffs, and was duly recorded. They further pleaded that the goods bought by them of the plaintiffs were-not in the stock at the time of the sale to Flint Singletary, but had been sold in the usual course of business to the customers of Boone & Son before the sale to Flint Singletary. They denied that the payment of this mortgage debt was made for the purpose of defrauding any of their creditors, and especially the plaintiffs, or in contemplation of insolvency. They denied that any payment was made to J. T. Hile, and denied that the sale to Singletary was fraudulent or void, or in violation of the act of 1904.

In an amended petition the plaintiffs alleged that Boone & Son had transferred to J. M. Ringo a note, which they held against Flint Singletary and Don Singletary, as a part of the. purchase price of said stock, for the purpose of cheating, delaying, and hindering them in the collection of their debts against Boone & Son. They asked that he be required to account to them and the creditors of Boone & Son for said $950 note. The allegations of this amended petition were denied by Boone & Son in an amended answer. In a reply the plaintiffs denied that the defendant Ringo had a mortgage upon any of the property which was sold by Boone & Son to Singletary. The defendant Singletary, it seems, was not represented by counsel, but appeared in court and filed his answer, in which he denied that he had purchased the stock of goods of Boone & Son on the 27th day of April, 1906, or at any other time in April of that year, and denied that he was responsible for the debts of Boone & Son, and asked to be dismissed. The depositions of Flint Singletary, Don Singletary, and J. M. Ringo were taken, and the case, on the pleadings and these depositions, was submitted for judgment. The court adjudged to the plaintiffs their respective claims against Boone & Son, found that the sale of the stock of goods, fixtures, etc., by Boone & Son to Flint Singletary, in gross, was fraudulent as to the plaintiffs and other creditors, and directed that said stock of goods be subjected, to the extent of $1,000, to the payment of the claims of the creditors of Boone & Son. The stock of goods was ordered to be sold in salisfaction of the .judgment. No relief was granted to the plaintiffs as against the defendants Hile and Ringo. From this judgment the defendant Singletary appeals.

The first question which presents itself is the right of appellant to prosecute this appeal. ■ Each of the judgments in the lower court being for a sum less than $200, it is insisted for appellees that no right of appeal lies; and the case of Covington Bros. Co. v. Jordan is cited as authority. In that case several creditors, each having a claim for less than &200, instituted separate actions against the defendant Jordan, and garnisheed a fund in the hands of the railroad company, which they claimed was’ owing to him. There was no concerted action in that case on the part of the claimants. The defendant, Powell, intervened and claimed the fund in the hands of the railroad company, and upon final hearing he was adjudged to be. the owner of it, and from that judgment each of the creditors appealed. So far as the appellants in that case were concerned, the amount in controversy was the value of their separate claims. Had the court decided against Powell, and adjudged that the fund which he was claiming was subject to the payment of the claims which were asserted against Covington Bros. Company, he would unquestionably have had' the right to appeal, for, so far as he was concerned, the amount in controversy was the sum total which he was claiming, and of' which the court, by its judgment, was depriving him. We are of opinion that this case is not controlled by the authority cited by appellees, but that the amount involved, so far ás the appellant in this case is concerned, is the sum for which the trial court ordered appellant’s property sold, to-wit, $1,000. Appellees united in one action and sought a common relief against appellant. They succeeded in having appellant’s property, to the extent of $1,000, subjected to-the satisfaction of their several claims. He owed them individually nothing. Their claims were against-Boone & Son; but the court adjudged that to the extent of $1,000 his property was subject to the debts-of the creditors of Boone & Son. It would, indeed, be a strange, not to say harsh, rule that would permit, appellee to recover in a joint action a judgment directing the sale of $1,000 worth of appellant’s property,, and then deny to appellant the right of appeal because-each of the claims of appellees was less than $200. Appellees are in no position to raise such a question.. However, we are of opinion that the amount in controversy in this case, so far' as appellant is concerned, is the amount for the payment of which his property was ordered to be sold.

We come next to the consideration of the main question in the case, to-wit-: Did the chancellor err in subjecting the property of appellant to the satisfaction of the debts of appellees? The proof taken in the case bears chiefly upon those allegations of the petition and its amendment which sought to have the transactions between Boone & Son and Ringo declared a fraudulent preference under the act of 1856; and, the chancellor not having so found, that branch of the litigation in the lower court is not now before us. In the pleadings it is not charged that the sale and transfer of the stock of goods of Boone & Son to> Singletary was an actual fraud, but that it was a constructive fraud by reason of the operation of the statute of 1904. For appellant it is insisted that the allegations of the petition, as amended, did not support the charge, for the twofold reason that the suit was not instituted within the 90 days from the date of the transfer, as the statute provides, and, second, that it is not alleged, that the goods, which the appellees sold to Boone & Son, were at the time of the sale included in and a part of the stock of goods so sold.

As to the first contention, the petition alleges that the sale was made on April 27, 1906. ' That suit was filed on July 23,1906, which would bring it within the statutory requirement. The answer filed by the defendant Singletary attempted to put the date of sale in issue, and denied that it was made on the 27th of April, or any other date in April. This, however, under the well-recognized rule that a pleading must be construed most strongly against the pleader, is not a sufficient answer; for under it the sale could have been made at any time within the months of May, June, or July, up to the date of the filing of the petition, which would have brought it clearly within the provisions of the statute.

The last clause of Acts 1904, p. 74, c. 22] is as follows: “Nothing contained in this act shall apply to sales made under any order of a court, or to any sales made . by executors, assignees, administrators, receivers, or any public officer in his official capacity, or by any officer of a court: Provided, that nothing in this act shall be so construed as to give any manufacturer, wholesale merchant or jobber any right to or lien on any merchandise or article in any stock of goods, except goods sold and delivered by such manufacturer, wholesale merchant or jobber.” Appellees' right of recovery being based solely upon the provisions of this statute, they must, by pleading and proof, bring themselves within the provision of the statute. Russell v. Muldraugh’s Hill, Campbellsville, etc., Turnpike Co., 13 Bush 307" court="Ky. Ct. App." date_filed="1877-09-19" href="https://app.midpage.ai/document/russell-v-muldraughs-hill-campbellsville--columbia-turnpike-road-co-7379489?utm_source=webapp" opinion_id="7379489">13 Bush 307; Smith v. Brew, 5 Mass. 516.

In the case at bar appellees neither alleged nor proved that any part of the goods.which were sold by them to Boone & Son constituted a part of the stock of goods which Boone & Son sold in bulk to appellant; whereas appellant in his deposition conclusively shows that at least a part of the fixtures was purchased by Boone & Son of parties other than appellees. The absence of such an allegation in the pleading, and proof in support thereof, is fatal to appellees’ right of recovery, in so far as they sought to subject, the stock of goods to the satisfaction of their judgment against Boone & Son. The aggregate of appellees’ debts, for which they got judgment against. Boone & Son, is $728.54, and, if they were entitled to-a judgment for any sum, it should not have been in excess of this amount; for certainly appellant’s stock of goods, if liable at all to be subjected to the claims, of appellees,, would not be liable beyond the amount of those claims, and the court clearly erred in adjudging the sale thereof for a sum in excess of the sum total of said claims.

Appellant also complains that the circuit court had no jurisdiction over eight of the claims which were-set up in this suit and that there was a misjoinder of parties. No objection was made either to the jurisdiction of the court or the misjoinder in the circuit court, and the defendants Boone & Son, who alone could be affected by these questions, are not appealing; hence they are not passed upon.

The ease is reversed, and remanded for a new trial, with the right given either party to file snch additional pleadings, and take such proof, as they desire.