Am. Stores Corp. v. Atkins

• Decision Date: 15 March 1923
• Citation: 116 S.E. 373
• Parties: AMERICAN STORES CORPORATION . v. ATKINS.
• Court: Virginia Supreme Court

116 S.E. 373

AMERICAN STORES CORPORATION .

v.ATKINS.

Supreme Court of Appeals of Virginia.

March 15, 1923.

Appeal from Chancery Court of Richmond.

Suit by Sue Rose Atkins against the American Stores Corporation. Decree for plaintiff, and defendant appeals. Affirmed.

This is a suit in chancery instituted by the appellee, Mrs. Sue Rose Atkins, against the appellant, the American Stores Corporation, a corporation, and its president, to enforce the lien of a certain writing, which was signed on the part of the appellant corporation by its president and secretary and treasurer, and had the corporate seal of the corporation affixed thereto, and which was by its terms in effect a chattel mortgage conveying certain personalty belonging to the corporation to secure the payment of a certain note of the same dated December 23, 1918, for the sum of $1,500, payable 60 days after date to the appellee, Mrs. Atkins, or her order, signed on the part of the corporation, as maker, by the same two officers, its president and secretary and treasurer, who signed the chattel mortgage and note as aforesaid; which note was given, as alleged, for $1,500, money loaned by the appellee to the appellant corporation; and to obtain a personal decree against the appellee corporation for any deficiency should there not be realized from the sale of the aforesaid personalty a sufficient amount to satisfy the said note.

The appellant corporation, by its original and amended and supplemental answer, made, in substance, only three defenses, viz.:

(1) That $1,425 of the $1,500, for which said note was given by the appellant, although represented to the latter at the time of the execution and delivery of the note, asbeing the money of the appellee, Mrs. Atkins, was In truth, as the appellant afterwards discovered, the money of the appellant, derived from a certain bank of Victoria certificate of deposit of $1,425, payable to the order of John H. Atkins, the husband of appellee, which $1,425 was the net proceeds of the sale of 150 shares of treasury stock of the appellant corporation to one Fowlkes, by said husband of appellee, as agent of the corporation, and that these facts were known to the appellee, Mrs. Atkins, at the time of the execution and the delivery to her of said note.

(2) The defense set up by the following allegations contained in the said amended and supplemental answer, namely:

"On December 23, 1919, the said Atkins, by reason of his transactions as salesman of the stock of respondent, was indebted to respondent in a large sum, to wit, the sum of $* * * in addition to the sum of $1,500, the proceeds of the sale of the aforesaid 150 shares of respondent's stock to said Fowlkes.

"The said Atkins was then, and had for a long time prior thereto been, wholly insolvent, and whatever property he had had been placed in the name of the complainant, Sue Rose Atkins, his wife.

"Contriving to hinder, delay and defraud this respondent in the collection of its indebtedness, he placed in her possession the certificate of deposit aforesaid, she then and there well knowing that the said Jno. H. Atkins was the sales agent of respondent and that the same represented the proceeds of the sale of certain shares of the capital stock of respondent sold by Jno. H. Atkins as its agent. And when the said Jno. H. Atkins procured from the said A. B. Dickinson the note in the bill mentioned under pretext of a loan of $1,500 to the respondent, and delivered it, as it is claimed, to the complainant, his wife, and procured from her the said certificate of deposit in return therefor, the whole was done with the intent to hinder, delay, and defraud respondent in the premises, and to secure to the complainant, his wife, the payment out of the assets of respondent of the sum of $1,500, without any consideration whatever."

And,

(3) That the appellant, while admitting the aforesaid execution of the chattel mortgage on the part of the appellant corporation by its aforesaid officers and the aforesaid purpose of it, yet, as set forth in said amended and supplemental answer—

"does not admit that said paper was executed pursuant to any lawful authority then vested in said officers; on the contrary, respondent expressly denies that¹ the officers aforesaid of respondent acted with due authority in the premises, and this respondent is advised, avers, and charges that said instrument is not valid and is not binding upon it either at law or in equity."

The case was heard by the court below upon the aforesaid pleading and the depositions of witnesses filed in behalf of appellant and appellee and a number of exhibits filed in evidence.

The decision of the court below, as appears from the opinion of the learned and painstaking judge of that court, which is made a part of the decree under review, was as follows:

"I am of opinion:

"(1) That the certificate of deposit for $1,425 issued by the bank of Victoria to J. H. Atkins was for 150 shares of stock belonging to J. H. Atkins and by him sold to J. W. Fowlkes and that, therefore, the certificate was, when issued, the property of J. H. Atkins.

"(2) That thereafter J. H. Atkins indorsed and transferred this certificate of deposit to Sue Rose Atkins for money due her by J. H. Atkins.

"(3) That Sue Rose Atkins with this certificate and $75 in cash loaned the American Stores (Inc.) $1,500, for which loan the note in suit was given.

"(4) That no part of this note has been paid, and, therefore, the complainant, Sue Rose Atkins, is entitled to the relief sued for in her bill."

. The decree under review was entered accordingly, directing the sale of the property, unless the appellant, within ten days from the entry of the decree, pay to the appellee the said sum of $1,500, with interest from February 21, 1919, and her costs, etc., and that the proceeds of such sale be deposited to the credit of the court in this cause.

Scott & Buchanan, of Richmond, for the appellant.

F. T. Sutton, Jr., of Richmond, for the appellee.

SIMS, J., after making the foregoing statement, delivered the following opinion of the court.

Of the questions presented by the assignments of error, which are all based on the above-mentioned defenses, we will first consider the following,, namely:

1. Did the learned chancellor below err in holding that the certificate of deposit for $1,425, issued by the Bank of Victoria to John H. Atkins was for the proceeds of sale of 150 shares of stock belonging to said Atkins and by him sold to J. W. Fowlkes; and that this certificate was therefore the property of said Atkins when it was issued; and that the latter thereafter indorsed and transferred this certificate to the appellee, Mrs. Atkins, who used the transfer of the same to the appellant, together with $75 in cash, to make up the amount she lent to the appellant, for which the note was given, the payment of which was secured by the chattel mortgage which is sought to be enforced in this cause?

The question must be answered in the negative.

There is no serious controversy over the correctness of any part of this holding ex-cept the holding that the certificate mentioned was, as claimed by the appellee, for the proceeds of the sale of 150 shares of stock belonging to John H. Atkins—the claim of the appellant being that this certificate was for the proceeds of the sale of 150...