Best v. Fuller & Fuller Co.

• Decision Date: 17 April 1900
• Citation: 185 Ill. 43,56 N.E. 1077
• Parties: BEST v. FULLER & FULLER CO.
• Court: Illinois Supreme Court

185 Ill. 43

56 N.E. 1077

BEST

v.FULLER & FULLER CO.

Supreme Court of Illinois.

April 17, 1900.

Appeal from appellate court, First district.

Suit by the Fuller & Fuller Company against Henry Best and others. From a judgment of the appellate court (85 Ill. App. 500) reversing a decree for defendants, defendant Best appeals. Affirmed.

In a bill and supplemental or amended bill filed by appellee January 14, 1898, it is alleged that appellee on January 5, 1898, recovered a judgment against one Adolph Gaul for the sum of $1,440.51, which was for drugs sold by complainant to Gaul; that at said date it sued out execution on the said judgment, and delivered the same to the sheriff, who made a demand on Gaul, notifying him to file a schedule and return the execution, January 12, 1898, indorsed, ‘No property found, and no part satisfied.’ The bill alleges that on or about December 10, 1897, Gaul was engaged in the drug business in the store No. 657 North Clark street, in the city of Chicago, and about that date transferred to the defendant Henry Best, his father-in-law, his entire stock of drugs, furniture, and fixtures, including a soda fountain and cash register, and that Best is pretending to be in possession; that the transfer was made to place the property transferred beyond the reach of creditors, and to enable Gaul to control and enjoy the same; that since the transfer he has exercised authority as usual, and there is no evidence of change of possession, except a small card hung in the store; that the stock and fixtures were worth $8,000 at the time of transfer, and that since the transfer Best, in various conversations, admitted that Gaul owed him only $2,300 at the time of the transfer, and that he had no interest in the transferred property, except as security for said sum; that said property constituted the entire estate of Gaul, and that at the time of the transfer Gaul owed other creditors besides complainant, which facts were known to Best; that Best and Gaul conspired to defeat complainant's claim, and that the transfer was fraudulent; that the soda fountain transferred to Best was worth $3,000; that on or about September 1, 1898, Gaul and Best, or one of them, made a pretended transfer of said stock of drugs, or such portion of them as remained in the store, to John J. Johnson, who is now in possession and conducting said business, which transfer was merely colorable, etc., and on August 31, 1898, said Johnson executed to William G. King a chattel mortgage of the said property, purporting to secure a note for $2,360, which mortgage was without consideration, etc., and that J. E. Norling claims an interest in said property as a member of the firm of J. J. Johnson & Co., composed of Johnson and Norling. The bill prays that the transfer to Best and to Johnson the decreed to be fraudulent; that the chattel mortgage be set aside as fraudulent; that Best may be decreed to be personally liable for the full amount of Gaul's indebtedness to complainant, in case complainant should fail to realize its judgment because of transfers, etc. Answers were filed by all the defendants, and replications to the answers. The evidence was heard in open court, and the court dismissed the bill and the amended or supplemental bill for want of equity. The recovery of judgment by complainant, and the issuing and return of execution, as averred in the bill, and that judgment was for drugs sold by the appellee to Gaul prior to the transfer to Best, are facts proven by the evidence, and not controverted.B. M. Shaffner, for appellant.

Charles Lane, for appellee.

PER CURIAM.

In deciding this case, the appellate court, after making a full statement of the facts and evidence, delivered the following opinion (the appellant here being the appellee in the appellate court, and the appellee here being the appellant in that court):

‘There is no evidence that Best assumed to pay any part of the back rent, as part of the consideration of the sale to him. ‘A conveyance of property which is absolute on its face, but which is really intended as a mortgage or security, is well enough as between the parties, but the settled doctrine is that such a transfer of property is fraudulent and void as to creditors.’ Beidler v. Crane, 135 Ill. 92, 98, 25 N. E. 655. The reason given for the doctrine is that in such case there is necessarily a secret trust for the benefit of the vendor, and that the natural and necessary effect of the instrument, in not disclosing the trust, is to mislead, deceive, and defraud creditors. Id. That Gaul executed the bill of sale as security is proved by his own testimony. He testified: ‘There wasn't anything left for me to do but to sell him the store, to secure my indebtedness to him.’ What Best wanted was his money or security, and Best's statements to Pierce, which were not denied, show conclusively that he regarded a bill of sale as merely a security, else how could he say to Pierce that he was an honest man, and all he wanted was the $2,300; that Gaul told him the store was worth $8,000; that he thought it worth $6,000; and that, if he could sell it for that amount, he wanted to pay all creditors? And why did he state to Lane that he had no disposition to beat any one, and that he believed that if the store should be held until summer, and then sold, all Gaul's creditors would be paid? This language would be appropriate, coming from one who held the property in trust for creditors, but would be not only inappropriate, but absurd, if used by a purchaser of the property absolutely and in good faith. We are of opinion, from the evidence, that the actual intention of the parties was to hinder and delay creditors other than Best, and that the bill of sale was made for that purpose, and to secure Gaul's indebtedness to Best. The evidence shows clearly that Best knew that Gaul had other creditors; that the property in the store was all Gaul had; that he was in a ‘bad fix.’ He also believed, as he himself says, that the property was worth $6,000, and he, as well as Gaul, must have known, on the hypothesis that they were moderately endowed with common sense, that for Best to take an absolute deed of the propertymerely as security, and continue the business with Gaul as manager, would necessarily hinder and delay Gaul's other creditors. Gaul testified that at the time of the execution of the bill of sale he knew that it would delay appellant in the collection of its debt. The...