87 Ky. 357 | Ky. Ct. App. | 1888
Lead Opinion
delivered the opinion of the court.
M. H. Johns, on the twenty-first of March, in the year 1884, made an assignment for the benefit of his
Johns, the debtor, was engaged in buying and selling timber in the same part of the State, and for years prior to the transactions adjudged' to be within the act of 1856, had sold and contracted to sell to these appellants large quantities of timber, the appellants advancing him the money to purchase the timber, fell it in the forests, and prepare it so as it could be rafted to the appellants at their place of business, or at points where they desired it to be delivered.
In August and September, in. the year 1883, • there was a written and also verbal contracts 'made between Johns and these appellants for timber. On the eighth of August, 1883, they made a written contract with Johns as follows: “1 have sold to Vinson, Goble & Prichard five hundred trees thát I purchased of Blankenship, Wm. Conly, Clay Farly and others, (ax Little Rockcastle, a tributary of Wolf creek, in Martin county, at two cents per lineal foot, and agree to deliver it at Catlettsburg by June 17, 1884, for fifteen cents for twenty-inch timber at the top, forty feet long, and one cent off or on. No raft to be less than seventeen inches in diameter.
“M. H. Johns.”
Under these contracts Johns, in February and March, 1884, delivered timber of the value of near seven thousand dollars to these appellants, the money for which, had been paid to Johns by the appellants in advance, to enable him (Johns) to pay for the timber, paying his hands, furnishing them. provisions, and to enable him to comply with his contract. It is alleged and not denied that these appellants were, under the agreement with Johns, to make him these advances, and that such was the agreement, regardless of the averment in the pleadings, is clearly inferable from the proofs. The contracts are clearly established, and the money actually advanced is made manifest by the proof, and the sole question is, Johns being insolvent, when the contract was made and the moneys advanced, did the delivery of this timber in payment of the advances made bring the transactions within the act of 1856? ' The chancellor so held, and of this the appellants complain. It seems that, at the date of the contracts, the timber sold was in trees then not severed from- the ground, with no marks or other identification so as the title -passed to the purchaser.
The contracts were ptirely executory, the appellants to make advances to enable Johns to cut the timber and deliver it in compliance with his undertaking. The timber, liowever, was cut and delivered to-these appellants, and it is therefore immaterial whether the title passed at the time of the sale or not. It was.
In Napper v. Yager, reported in 79 Ky., 241, creditors sought to set aside a deed executed by one of the parties, as was alleged, in contemplation of insolvency,etc. Napper had executed a deed to Ludwick under a parol agreement, by which Ludwick had advanced to Napper several hundred dollars for which he was to convey the land. It was held that the transaction did not create the relation of debtor and creditor, and that Ludwick could not be regarded as a creditor until the parol contract had been repudiated by Napper. In the present case the facts refute the idea of any intention to prefer, and the fact that an account was exhibited by the appellants showing the state of accounts between them, with credits and debits, does not affect the question involved. The appellants had to keep an account of moneys advanced, and because kept in the usual way, did not create the relation of creditor and debtor, and destroy the relation of vendor and vendee that existed by virtue of the contracts between the parties. It is attempted to be shown by A. H. Goble that one of the appellants denied having-purchased any timber from Johns, and while this may be so, it is plain that it was purchased, and much of it had been delivered before the alleged conversation
There is a question remaining, however, that brings a branch of the case within the insolvent act. Some four hundred and eight dollars of the claim paid on this timber was the balance due on an old account, or for advances made on other timber. It was a plain indebtedness, and the promise to pay it in timber or money, under the circumstance, with an actual payment made in 1884, was a preference, and must be so construed. The payment in timber was the preference, and this the appellants must account for, but nothing more, as the timber purchased, and upon which the advances were made, cdn not be construed as a preference within the meaning of the statute.
Judgment reversed, and remanded for proceedings consistent with this opinion. .
Rehearing
To a petition for rehearing,
delivered the following response of the court:
When the opinion in this case was delivered the case of Fuqua v. Ferrell, reported in 80 Ky., 69, was not considered, and we now fail to see any analogy between these two cases. There a mortgage was executed to secure the debt by an insolvent debtor, and operating as an assignment, the estate then passed to creditors, and any subsequent transfer by the debtor could not divest the creditors of title unless made to a bona fide purchaser. In Southworth v. Casey, reported in 78
Petition overruled.