11 La. Ann. 563 | La. | 1856
Lead Opinion
(Lea, J., dissenting — Merrick, C. J., took no part in this decision). This is a revocatory action'. The plaintiffs allege that the commercial firm of Hogan & Tureaud, now in liquidation, are indebted to them on two promissory notes, one for the sum of $192 89, with 7 per cent, per annum interest from the 4th of March, 1853, and the other for the sum of $203 43, with like
The answer of Samuel Lock contains a general denial, and an admission that he did, in the winter of 1853, purchase of J. S. Hogan, his co-defendant, a quantity of hardware, which said purchase he alleges to have been made legally and for a good and lawful consideration, and without any fraud or shadow of fraud, as falsely alleged.
In his answer, Hogan also pleaded a general denial, except the sale to Lock, which he admitted to have been made in good faith; that said plaintiffs were aware of the sale being made, and have acted through malice in making false and unfounded charges to their personal knowledge, and done for the purpose of injuring, if possible, his reputation in the community.
Upon the pleadings and evidence adduced the case was submitted to a jury, who returned a verdict in favor of the plaintiffs for the amount of their claim against the firm of Hogan Jc Tureaud, declaring the sale from Hogan to Lock to be null and void, and the property sold subject to their execution, and Jeremiah S. Hogan guilty of fraud, etc. From a judgment thereon rendered by the court below against the defendant, whereby Jeremiah S. Hogan was also condemned to two years imprisonment in the parish jail, said Hogan and Samuel Lock have taken the present appeal.
The alleged agreement between Hogan & Tureaud and their creditors is in the following words:
This instrument appears to have been executed in January, 1852. Shortly afterwards Tureaud retired from the firm and Hogan continued to carry on the business in his own name and on his own account, purchasing goods from time to time to beep up his assortment, and to liquidate the business of the partnership. In June following, an inventory of the goods of the firm was taken, and amounted to the sum of $14,434 11, at cost price, exclusive of $4963 15 for ploughs held on consignment for sale. When Hogan & Tureaud established their firm they owned no capital. Hr. Thibaut aided them by endorsing their notes — so didJfr. Tureaud, of St. James. The notes thus endorsed by Thibaut, and discounted by the banks, at the time of their suspension amounted to between $5000 and $7000, and were to be paid in full, according to the understanding of the parties. Independently of these notes, the liabilities of the firm amounted to about $30,912 70. The loss sustained by bad debts was about $10,000. It does not appear that any other assets belonged to the firm than those set forth in the above inventory at that date.
As evidence of fraud on the part of both Hogan and Lock, it is argued by the plaintiff’s counsel that Look was a creditor of Hogan & TureaufL at the time of the respite for $2554 68 ; and, from the 1st of January, 1852, was familiar with their whole business relations; that he was compelled, under an execution, to pay Twibill & Edwards, as endorser, the note of Hogan & Tureaud for $775 93; that he was continually dealing with Hogan, selling him goods and taking his notes; that he finally took Hogan into his employ; that under his influence and advice, his notes, given in part payment of the sale to him, were given in payment to Busby & Little for a debt due by Hogan individually; and that some time after the suit of Twibill & Edwards had been brought against him, he consummated his bargain with Hogan by paying McNeely two of these notes.
We are of opinion that the charge of fraud is unsupported by the evidence. Finding himself unable to continue business any longer with a reduced stock, an impaired credit and a heavy annual expense for rent, salaries of clerks, &c., Hogan made known his condition to several of the creditors of Hogan & Tureaud, and his intention to sell out. Some of them advised, hut none of them appear to have disapproved of his determination. His negotiation with Lock for the sale of the goods was openly spoken of previous to the date of the sale: Lock appears to have communicated his intention to make the purchase to some of the creditors, and his inducement for doing so. After Hie contract was concluded between the parties, it took four or five weeks to make the inventory of the stock, and this to the knowledge of several of the creditors who occasionally visited the store during that time. The inventory of the goods, at cost price, amounted to $7965 85, which appears to have been paid as follows, to wit: ten notes, each for $517 57, dated the 10th of March, 1853, drawn by Lock to his own order, and endorsed by him and payable at 12,18,24, 30 and 36 months; three notes given by Hogan for goods sold to him by Lock after the dissolution of the firm, amounting to $1295 90. And here it may be observed, as we infer from the evidence, that Lock, in common with the other creditors, Yredenburg,
Under the agreement it is evident that the creditors acquired no other privilege or lien on the stock of Hogan & Tureaud, their debtors, than that which the law had already conferred upon them. After the dissolution of the partnership, we think it may be fairly inferred from the testimony of Tureaud, that his partner Hogan was fully invested, if not with the ownership, at least with the authority to sell the stock under the circumstances disclosed by the record; at all events, he carried on the business in his own name and for his own account. It was not only known but approved by the creditors, who continued to deal with him on terms of credit. It is shown that during the time he thus continued in business, he purchased goods, to keep up his assortment, to the amount of $11,000 and paid for them; that he received consignments of ploughs, carts, wagons, &c., for sale on commission; and that the money arising from this sale of his goods and such consignments was applied indiscriminately to the payment of all his liabilities. It is shown that he has paid on account of the debts due by the firm $16,345 72, exclusive of $1778 65, the amount paid the Mechanics’ & Traders’ Bank, and the indorsement of Thibaut and Tureaud, amounting to upwards of $10,000. We think the evidence shows conclusively that he has faivly accounted for his liability to the creditors resulting from the management of the assets of the firm of Hogan & Tureaud. But it is said that he has misapplied the notes of Lock given as the price of the goods sold. It is in proof that he was largely indebted to Busby, Little & Co. for consignments, and gaVe in part payment thereof six of the Lock notes; he also gave two others in payment of the claim of B. E. Exly, a wheelwright and wagon-maker, and the remaining two appear to have been transferred to Julia D. Bean. Upon the whole, after a careful perusal of all the evidence which is voluminous but not contradictory, we are of opinion it is insufficient to sustain the charge of fraud against Hogan under the statute of 1840. Lock, wasclearly not a creditor of the firm of Hogan & Tureaud at the date of the sale, as charged in the plaintiffs’ petition; he had ceased to be so for more than a year before in relation to the two notes which he had endorsed to the Mechanics’ & Traders’ Bank; and as to the third, endorsed to Twibill & Edwards, which he was compelled to pay since the date of the sale, it appears that the two last instalments thereon are still due him. The allowance ofhis claim in part payment of the price, as it placed him upon the same footing with the other individual creditors of Hogan, should not, in our opinion, affect the validity of the sale.
It is therefore ordered, adjudged and decreed, that the judgment of the court below, so far as it decrees the defendants Jeremiah S. Hogan, Joseph P. Tureaud and Lion Séré to pay, in solido, to the plaintiffs, three hundred and ninety-six dollars and thirty-two cents., with interest on one hundred and ninety-two dollars and eighty cents., from the 4th of March, 1853, at the rate of seven per cent, per annum, and like interest on two hundred and three dollars and forty-three cents., from the 4th of January, 1854, till paid, he affirmed with, costs; and that in every other respect said judgment be avoided and reversed, the said plaintiffs to pay the costs of appeal, and so far as relate to said Samuel Lock also those of the court below.
Dissenting Opinion
dissenting I think a sale made by an insolvent debtor of his entire stock in trade, on terms of credit, to a creditor who is fully aware of his insolvency, ought not to be protected, especially where the creditor takes the goods in part payment of his own claim. Í am not satisfied, from the evidence, that the plaintiffs are estopped by having consented to the sale.