Stix v. Keith

• Decision Date: 11 December 1888
• Parties: STIX ET AL. v. KEITH.
• Court: Alabama Supreme Court

5 So. 184

85 Ala. 465

STIX ET AL. v. KEITH.

Supreme Court of Alabama

December 11, 1888

Appeal from circuit court, Jackson county; JOHN B. TALLY, Judge.

Pope W Keith sued Louis Stix & Co. for trespass. Judgment for plaintiff, and defendants appeal. The two charges referred to in the opinion were asked to be given by the defendants, and were in the following language: "(13) When circumstances exist raising a doubt of the fairness of the transaction, the vendee must prove an adequate consideration, when the fairness is attacked by creditors; and if you believe from the evidence that Keith paid forty-six hundred dollars for the stock of goods worth six thousand dollars, that would be a circumstance to which you would be authorized to look in determining the fairness of the transaction between Keith and Fennell." "(18) If the jury believe from the evidence that Keith and Fennell were partners in the mercantile business prior to and at the time of the alleged purchase by Keith from Fennell, that is a circumstance to which the jury would be authorized to look in determining the question as to whether Keith knew of Fennell's insolvency, or by reasonable diligence had opportunity to know it. And if you believe from the evidence that Keith knew of Fennell's insolvency, or had opportunity to know it by the exercise of due dilligence at the time he purchased from Fennell, you would be authorized to find a verdict for the defendants."

Humes, Walker, Sheffey & Gordon and R.C Hunt, for appellants.

Brickel, Brown & Kirk, for appellee.

STONE C.J.

On the 19th day of December, 1884, Keith purchased from Fennell a half interest in a stock of merchandise, and became his equal partner in the business. Twenty days later-January 9, 1885-he purchased the other half interest, and continued the business in his individual name. He did not purchase any interest in Fennell's bills receivable, nor is there testimony in the record tending to prove their amount or value. It is neither proved nor claimed that Keith assumed Fennell's debts in either of these purchases. The uncontroverted testimony is that Keith, for the undivided half interest, promised and paid $2,200, and for the remaining half interest $2,470, all done and completed within a few days after the respective purchases. The invoice value of the goods was between five and six thousand dollars, and witnesses cover the same margin in fixing their value. On the 19th day of January, 1885, the appellants, Louis Stix & Co., sued out an attachment against Fennell, on the alleged ground that he had fraudulently disposed of his property and effects, claiming that he owed them something over $800. Under said attachment, the goods were levied on, and the store taken possession of, the same day by the United States marshal. While the goods and store were so in the hands of the marshal, other attachments, at the suit of other creditors of Fennell, were placed in his hands, and were also levied on the goods. The aggregate of the attachment thus levied equaled or exceeded the value of the merchandise. No part of the merchandise or its proceeds was ever restored to Keith. The attachment suits were prosecuted to judgments, and the goods were sold in satisfaction of them. The sale of the goods yielded $3,500, $880 or more of which were applied to the satisfaction of the judgment in favor of Stix & Co. The balance went to the later attaching creditors of Fennell. The present action of trespass de bonis asportatis was instituted by Keith, and counts in damages for taking and carrying away the entire stock of goods. The defendants attempted to justify under process, not against Keith, but against Fennell. Of course, to make such defense good, it was necessary to show that Keith's purchase was fraudulent; or, what is the same thing, that Fennell, by the transaction, attempted to delay, hinder, or defraud his creditors; and that when Keith purchased he knew such was his intention, or had information of suspicious circumstances which ought to have led him to make inquiry; and that if he made such inquiry, and followed it up, it would have led to knowledge of Fennell's fraudulent intent. The legal principles applicable to this question have been so often stated that we deem it unnecessary to repeat them. Crawford v. Kirksey, 55 Ala. 282; Hodges v. Coleman, 76 Ala. 103; Lehman v. Kelly, 68 Ala. 192; Levy v. Williams, 79 Ala. 171; Shealy

v.

Edwards, 75 Ala. 411; Leinkauff

v.

Frenkle, 80 Ala. 136; Hoyt

v.

Turner, 84 Ala. 523, 4 South. Rep. 658; 3 Brick. Dig. 679, § 10; Wait, Fraud. Conv. § 376.

The circumstances of the transaction brought to view in this case go very far to show that Fennell, in selling his merchandise to Keith, had the intent to defraud his creditors. So the most important inquiry was whether the latter, when he purchased, had notice or knowledge that such was his intention, or was cognizant of such suspicious circumstances as were calculated to put him on inquiry which, if entered upon and followed up, would have led to a discovery of his fraudulent intent. If these constituent elements are shown to have co-existed, then, notwithstanding Keith may have promised and paid the full value of the merchandise, his title is worthless against the claims of Fennell's creditors. No man should aid another in a dishonest effort to defraud his creditors, and any intentional assistance thus rendered is a legal wrong, which it would be a reproach to the law to say it could not redress.

But it is not every assistance rendered a failing debtor in defrauding his creditors that the law condemns or punishes. We live in a commercial age, and the right to sell is one of the attributes of property. It is only when this inherent right is perverted to unlawful or dishonest uses and purposes that it deserves condemnation, and only when it is knowingly assisted, or assisted under circumstances which render ignorance of the evil intent wicked or culpable, that the law lays its chastising hand on the accomplice or helper. To do more than this would greatly embarrass that free commerce which our institutions and the age we live in have done so much to encourage and promote. Such questions as we deem it necessary to notice we will now consider in detail. We do not consider there is anything in the motion made to quash the panel from which the struck jury was to be selected. Harrington v. State, 83 Ala. 9, 3 South. Rep. 425.

J. P. Stewart, a witness for plaintiff, was asked "What was Fennell's commercial standing during the time he [witness] was with him." This question was objected to on several grounds, among them, "because no proper predicate was laid for asking the witness such question." The objection was overruled, and the witness answered, "It was good." The ruling on question and answer was, as to each, excepted to. This witness was a salesman in the store when each of the sales was made. There was no proof offered, save the fact that the witness was such salesman, tending to show he had knowledge of Fennell's commercial standing, and he was not interrogated as to such knowledge.

We do not think a sufficient predicate was laid for letting in the testimony. It could not, from the facts shown, be assumed, as a matter of law, that the witness was sufficiently acquainted with Fennell's business standing to express his judgment or opinion upon it. He stated that he had never examined the books. The court erred in admitting this testimony. Pollock v. Gantt, 69 Ala. 373; Wood v. Brewer, 57 Ala. 515; Baucum v. George, 65 Ala. 259.

This testimony was material, on the single, yet very important inquiry, whether Keith, when he purchased from Fennell, had or was chargeable with having notice that the latter was in failing circumstances, or contemplated defrauding his creditors. As testimony tending to prove notice, it is only general reputation, or recognized commercial standing, which can be made the basis of evidential opinion. To give such opinion, the witness must have knowledge of the commercial standing of the person about whom he testifies. The credibility of parol testimony is a pure question of fact for the trying body to determine. The intelligence of the witness, his manner in testifying, the consistency, probability, or improbability of his narrative, all enter into and make up the probative force of his testimony; and, when known, the character of the witness becomes a factor in producing, or failing to produce, conviction. Few, if...