Carter v. Richardson

• Decision Date: 16 January 1901
• Citation: 60 S.W. 397
• Parties: CARTER et al. v. RICHARDSON et al. [1]
• Court: Kentucky Court of Appeals

60 S.W. 397

CARTER et al. v. RICHARDSON et al. ^[1]

Court of Appeals of Kentucky.

January 16, 1901

Appeal from circuit court, Warren county.

"Not to be officially reported."

Consolidated actions by Hilpp Richardson & Co. and others against Max Cohn on accounts. Judgment denying claim of George A. Carter & Co. to attached property, and they appeal. Affirmed.

W. L Dulaney and W. S. Pryor, for appellants.

W. E Garth, Byron Renfrew, and Wright & McElroy, for appellees.

O'REAR J.

Appellees Hilpp Richardson & Co. sued Max Cohn in the Warren circuit court to recover $228 on a bill of merchandise sold him, and took out attachment against his property in October, 1895. About the same date the following other appellees, as creditors of Cohn, filed their respective suits in the same court, taking similar process, viz.: H. & G. Feder, on a debt of $482.75; Isaac Strauss & Co., on a debt of $88; Fliesher Bros., on a debt of $1,052.50; Falls City Manufacturing Company, on a debt of $551; and Mayfield Woolen Mills, on a debt of $317. Many of these debts were not due, and all of them were for bills of merchandise sold and delivered to the defendant, Max Cohn, a clothing merchant then at Bowling Green, Ky.; the plaintiffs all being wholesale dealers. The attachments were levied on the stock of merchandise, which was being removed from defendant's (Cohn's) place of business, and had been loaded in a railroad car to be shipped to appellants in Virginia. Appellants executed bonds under section 214, Civ. Code Prac., as claimants of this property. They waived appraisement required by section 215, Code. There is no question here as to (1) the indebtedness of defendant Max Cohn, to the respective plaintiffs, as charged in their petitions; (2) nor to the grounds of attachment in each case; (3) nor to the priority of attachments. In each of the suits mentioned, after the execution of the claimants' bonds, appellants presented their petitions to be made parties, under section 29, Code, claiming that, at the times of the issuance and levy of the respective attachments, they were the owners and in the actual possession of the property levied upon, having previously purchased and fully paid for it. Each of the plaintiffs filed replies denying that appellants had bought or paid for the property before their respective attachments were sued out and levied, and pleaded affirmatively that appellants' taking and holding of the property was with full notice and knowledge of defendant's (Cohn's) fraudulent intent to cheat, hinder, and delay his creditors in making this pretended sale; the facts constituting the fraud, notice, and knowledge being set out at length, and which will be more particularly referred to hereafter. Issue was joined as to these allegations, and the cases, by order of the court, were consolidated, prepared, and heard together. Though objected to by appellants, this order of consolidation appears proper.

After preparation, the cause was ordered submitted, and before judgment one of the plaintiffs, the Rankin Manufacturing Company, dismissed its suit without prejudice. Judgment was then rendered by the circuit court, sustaining all the attachments in the other cases, adjudging the sum each plaintiff was to recover, denying appellants' title, and adjudging their liability to plaintiffs, respectively, on the claimants' bonds above referred to, and adjudging against appellants the cost of the suits incurred by reason of the assertion of their claim. Appellants prayed an appeal to this court, and filed the transcript here August 30, 1898 judgment having been rendered apparently on March 15, 1898. Of the facts relied on by appellees as constituting the fraud of defendant, Cohn, and the legal participation in it by appellants by reason of their knowledge or notice of Cohn's guilty interest, we find the following to be sufficiently proven: Max Cohn inherited, in fall of 1894, by the death of a brother, a stock of clothing merchandise at Bowling Green, of the value of about $6,000, and $1,000 in life insurance money. He continued the business, advertising as the "Successor of A. Cohn," purchasing small bills from divers of the appellees, discounting his bills. In at least one instance he furnished a statement to the wholesale merchants in which he showed his assets to be about $8,000, and liabilities not exceeding $1,600. An invoice taken in the spring of 1895 showed stock of value of $7,432. All the bills sued on were bought in the spring and summer of 1895, for fall delivery, and post dated. They began to mature about middle of October to 1st of November, 1895. Cohn had a brother-in-law. His name was Messenger. Messenger lived in Virginia, and knew a man there by the name of Tate. About October 9, 1895, after Messenger had told Tate that Cohn wanted to sell his stock of merchandise as an entirety, and Tate had agreed to mention the matter to appellants (who appear to own numerous stores in Virginia, doing a mining, banking, and mercantile business), and after Tate had mentioned to Mr. Carter, of appellants, the fact of Cohn's owning and wanting to sell such a stock, Tate came to Bowling Green, he says, to buy a horse. Messenger was there when Tate arrived, and introduced Cohn. Tate telegraphed appellants, and they sent their confidential man, Jordan, to inspect the stock, and close the trade if satisfactory. Jordan was an experienced buyer. Tate remained at Bowling Green five or six days,--till these goods were ready for shipment. Jordan and Cohn had no difficulty in agreeing on terms. Jordan says Cohn asked two-thirds of original cost, which he declined. He failed to state what basis was adopted in the trade. He says he paid about $2,800 for the stock, and took an invoice after Cohn left. Cohn disappeared the night of the sale, though Jordan says Cohn agreed to stay and assist in packing the goods. Cohn absconded in the night, paying nobody, not even his clerk or his rent. Jordan paid the rent the following morning before moving the goods. And before Cohn left Jordan consulted a lawyer, and had him prepare a bill of sale of the stock of merchandise, which Cohn signed. Jordan says he knew nothing of Cohn's indebtedness, nor of his purposes, nor his reasons for selling, nor did he make any inquiry, nor inspect, nor ask to inspect, his invoices or books. Jordan asked no questions. He gave the check of appellants for about $2,800 on Pulaski Loan & Trust Company, a banking concern of Pulaski, Va., of which George L. Carter, one of the appellants' firm, was the president. This check appears to have been delivered to Cohn on October 10, 1895, at Bowling Green, Ky. On the following morning a salesman of the Rankin Manufacturing Company and Mr. Renfrew, attorney for numerous of the attaching appellees, visited Cohn's store, and finding him gone, and goods being boxed for shipment, inquired the cause, and were told by Jordan that he had bought the goods, paying cash for them, and was shipping them to Virginia. He was there and then informed by Renfrew and the salesman of their claims, and of Cohn's evident purpose in making the sale and decamping. The front doors of the store were then locked, and goods were taken out the back way, loaded on cars, and prepared for immediate shipment. One of the appellee firms, having sued out an attachment early in the day of October 11th, Jordan applied to Mr. Potter, of Bowling Green, to execute a bond for the forthcoming of the property. Potter agreed to do it if "the president of the Pulaski Loan & Trust Company" would wire indemnity, etc. Messages were sent to the president of the Loan & Trust Company, who responded to make any bond Mr. Jordan needed. Before the first bond could be executed (although claimants [appellants] expressly waived appraisal of the goods), the other attachments were issued and levied. Appraisal was waived in each instance, and bond executed in each case. The proof of Cohn's fraudulent intent to cheat his creditors is ample, and the fact is not questioned in argument by appellants' counsel.

Was appellants' knowledge or notice such as to render them parties, in contemplation of law, to Cohn's fraudulent transaction? It is contended in argument for appellants that neither Mr. Carter, who is the only one of appellant firm shown to have even known of the...