Butler v. White

• Decision Date: 23 January 1879
• Citation: 25 Minn. 432
• Parties: LEVI BUTLER and others <I>vs.</I> CHARLES WHITE.
• Court: Minnesota Supreme Court

25 Minn. 432

LEVI BUTLER and others vs. CHARLES WHITE.

Supreme Court of Minnesota.

January 23, 1879.

Plaintiff brought this action, on May 9, 1873, in the district court for Cottonwood, Murray and Pipestone counties, to recover possession of a large quantity of lumber, taken by the defendant as sheriff of Cottonwood county on execution on a judgment in favor of the St. Paul Lumber Co., against Ahimiaz E. Wood. A jury was waived, and the action tried by a referee, who found the facts, in substance, as follows: On June 8, 1872, A. E. Wood was engaged in the lumber business at Windom in Cottonwood county, where he owned a lumber-yard and the lumber therein. On that day, being insolvent and indebted, among other creditors, to the St. Paul Lumber Co., he transferred to his brother, J. H. Wood, all the lumber in his yard, and other personal property, and at the same time, and as part of the same transaction, received from J. H. Wood certain promissory notes, including those afterwards turned over to plaintiffs, as stated below. This transfer was made by A. E. Wood, with intent to hinder, delay and defraud his creditors, including the St. Paul Lumber Co., and was therefore void as to such creditors.

On June 22, 1872, the St. Paul Lumber Co. brought suit against A. E. Wood, and caused a writ of attachment to be issued, which was, on the same day, levied by Hosea Eastgate, then sheriff of Cottonwood county, on the property so transferred to J. H. Wood. On January 15, 1873, the St. Paul Lumber Co. recovered judgment in that action against A. E. Wood, for $11,363.77, which judgment was on January 18, 1873, docketed in Cottonwood county. On January 27, 1873, execution on this judgment duly issued, directed to the sheriff of Cottonwood county, which was, on February 8, 1873, delivered to the defendant White, who, on January 1, 1873, had succeeded Eastgate as sheriff of the county. On February 10, 1873, White, with the knowledge and consent of the St. Paul Lumber Co., endorsed on the execution a return that he had made diligent search, etc., and could find no property of the judgment debtor on which to levy the execution, and that he therefore returned it wholly unsatisfied. On April 1, 1873, the defendant filed the execution, with this return thereon, in the proper clerk's office. Eastgate, who, as sheriff, had levied the attachment, and whose term of office expired on January 1, 1873, continued to hold the writ of attachment and the attached lumber and other property, until about April 1, 1873, when he turned over the writ, and all the property attached, to the defendant, his successor in office. Ever since he went out of office, Eastgate has continued to reside in the county, and is entirely competent mentally and physically to perform the duties of sheriff.

On April 1, 1873, an alias execution duly issued on the judgment of the St. Paul Lumber Co. against A. E. Wood, and was on the next day delivered to the defendant as sheriff, who on April 3, 1873, levied the same on all the property which had been attached, and which had been delivered to him by his predecessor in office, Eastgate, and which he still held in his possession, and proceeded to advertise for sale the property so levied on, when it was replevied by the plaintiffs. The defendant rebonded the property, and on May 16, 1873, sold it under the execution for $3,024, which sum, less his fees and expenses, he turned over to the St. Paul Lumber Company.

At the time of the fraudulent transfer to his brother, and when the attachment was levied, A. E. Wood was indebted to the plaintiffs in an amount exceeding $3,000. Afterwards plaintiffs applied to him for payment or security of this debt and thereupon it was agreed between the plaintiffs, A. E. Wood and J. H. Wood, that A. E. Wood should transfer to plaintiffs, as collateral security for such debt, six of the notes made to A. E. Wood by J. H. Wood on the transfer of the lumber-yard, and that these notes should be secured by a special assignment and transfer of all the lumber and property which had been attached in the suit brought by the St. Paul Lumber Company. To carry out this agreement, A. E. Wood endorsed and delivered the six notes to the plaintiffs, and J. H. Wood executed and delivered to plaintiffs the following instrument:

"Whereas I, Jonah H. Wood, of Windom, Cottonwood county, Minnesota, am indebted to L. Butler & Co., a firm composed of," (giving names of all partners,) "in the sum of $3,000, and interest, upon six promissory notes, each dated June 8, 1872, and in the sum of $500, payable respectively in 60 days, 90 days, 4, 5, 6 and 7 months after their said dates to A. E. Wood or bearer, with interest after the maturity of the same respectively, at ten per cent. per annum, and made by said Jonah H. Wood, and by him delivered, endorsed and transferred for value to said L. Butler & Co., and now held and owned by them: and whereas the whole amount of said notes and interest is now due to said L. Butler & Co.: Now this agreement made by and between said Jonah H. Wood, of the first part, and said L. Butler & Co., of the second part, witnesseth: That in consideration of said indebtedness, said party of the first part hereby sells, transfers and delivers to said second party and their assigns, all the goods and chattels and personal property belonging to said first party, and situate in the town of Windom, in the county of Cottonwood, in said state, a full description of which is given in the schedule marked exhibit A, hereto annexed and made a part of this agreement, the same being intended to include and cover all the lumber, timber, lath and shingles, of every character, now being in an enclosure in said town of Windom, and occupied formerly as a lumber-yard by one A E. Wood, as well as other personal property designated in said schedule: to have and to hold the same as the absolute property of said second party, and for the uses and purposes following: Said second parties are hereby authorized to take full possession and control of said property, and to sell and dispose of the same on the best terms and in such a manner as in their judgment shall seem best and most advantageous to said respective parties, and from the proceeds thereof, after paying all reasonable expenses in selling the same, pay the said notes hereinbefore specified and the amounts due thereon, returning the overplus, if any, to said first party."

The schedule referred to was attached to the instrument, which was executed and delivered at the day of its date, was duly acknowledged, and was filed in the office of the town clerk of the town of Windom, on March 29, 1873.

At the time the plaintiffs received this instrument, they knew that the transfer by A. E. Wood to J. H. Wood was fraudulent as to the creditors of the former, and knew that the sheriff had endorsed the return of nulla bona on the execution in favor of the St. Paul Lumber Co., and that he was about to file the same with the clerk of the court, and were advised by their counsel that the effect of such return would be to release the lien of the attachment; and they relied upon such return in taking the transfer.

Immediately after the attachment was levied, and about July 22, 1873, J. H. Wood brought a suit against the deputy of Eastgate (the then sheriff) who made such levy, and against the St. Paul Lumber Co., for damages for the taking of the attached property. The defendants therein answered, justifying the taking under the writ, and on November 11, 1873, the action was dismissed by plaintiff, of his own motion, and an order of dismissal entered. On May 21, 1874, on motion of the defendants therein, judgment was rendered in such action that the plaintiff take nothing thereby, and that the defendants recover their costs.

Upon these facts, the referee found that the plaintiffs were entitled to judgment for the return of the property, or for the sum of $3,024, the value thereof, in case a return could not...