Chenault v. Bush

• Decision Date: 07 December 1886
• Citation: 84 Ky. 528,2 S.W. 160
• Parties: CHENAULT, Receiver, etc., v. BUSH.
• Court: Kentucky Court of Appeals

2 S.W. 160

84 Ky. 528

CHENAULT, Receiver, etc., v. BUSH.

Court of Appeals of Kentucky.

December 7, 1886

Appeal from circuit court, Montgomery county.

Action by Chenault, receiver, against V. W. Bush, upon notes executed by him to Williams & Stevenson, for property sold by them before they assigned for benefit of creditors.

W. H Holt and H. L. Stone, for appellant.

J. J Cornelison, for appellee.

BENNETT J.

On the eighteenth of December, 1882, J. G. Williams and W. D Stevenson, as partners, trading under the firm name of Williams & Stevenson, sold to the appellee, V. W. Bush, several pieces of property. Appellee executed to the said firm several notes for said pieces of property, due and payable at short intervals of time. Among the property thus bought were four mules, four sets of harness, one log wagon and chain, at the price of $590, for which appellee executed his note, due and payable 13 days after date. Shortly after this transaction, and before the maturity of any of the said notes, Williams & Stevenson, both as a firm and as individuals, made a deed of assignment of all of their property to-----, assignees, in trust for the benefit of their creditors. The assignees accepted this trust, and brought suit to the February term of the Clark county common pleas court for the purpose of settling the said estate, and distributing the proceeds among the creditors of the assignors. At said term of court the appellant was appointed receiver to collect all accounts, notes, and choses in action due the firm of Williams & Stevenson.

On the seventh of March, 1883, the appellant, as receiver, brought suit in the Montgomery circuit court against the appellee, in which he sought to recover judgment on the above-mentioned notes. The appellee contested the appellant's right to recover on the note of $590, upon the ground of a failure of consideration, which consisted in the fact that, at the time of the purchase of said mules, harness, etc., the sheriff of Montgomery county held in his hands an execution, which was alive and in full force, in favor of R. G. Robinson, and against the firm of Williams & Stevenson, which execution created a lien upon said mules, harness, etc.,--they being at the time in Montgomery county,-- prior and superior to the right of appellee, as purchaser of said property; and that said prior and superior lien, by virtue of said execution, was enforced by the levy, seizure, and sale of said property to satisfy said execution lien.

The execution, having been issued from a circuit court, created a lien, as soon as it came to the hands of the sheriff of Montgomery county, upon all of the property subject to execution in said county, belonging to Williams & Stevenson, which lien was superior to the appellee's after-acquired right to said property by purchase from Williams & Stevenson. The proof is clear that at the time of appellee's purchase of property it was in Montgomery county, and that said execution was in the hands of said sheriff, alive and in full force; and that the property was, after the purchase, levied on and sold to satisfy said execution. The lower court, therefore, sustained the plea of a failure of consideration, and released the appellee from the payment of said note. In this the court did right.

The appellee pleaded a set-off of $6,000 against the other notes sued on by appellant. Issue was joined on this plea. The proof shows that the firm of Williams & Stevenson, as a firm, entered into partnership with appellee, under the firm name of J. G. Williams & Co., for the purpose of buying walnut lumber,--the firm of Williams & Stevenson representing one-half interest, and the appellee the other half interest; that they purchased a large lot of walnut lumber from one Davis; that, for the purpose of taking the notes which they had executed for the price of said lumber, they, on the fifth of October, 1882, executed to the Clark County National Bank a note, due and payable four months after date, for $12,353.75, which note was signed by the firm of Williams & Stevenson, by J. G. Williams, and the appellee; that on the twenty-fourth of February, 1883, the appellee, with his own money, paid off said note in full, and took an assignment of it from the bank to himself. The foregoing facts are clearly established by the proof, as it appears in the record before us. The sum pleaded as a set-off by appellee consists of one half of the amount he paid in taking up said note.

The note, at the time of the assignment by Williams & Stevenson, was not due, nor was it paid off by appellee until after said assignment, and the acceptance of the trust by the assignees; but was paid off before the appellant, as receiver, instituted suit against appellee on the notes executed by him to Williams & Stevenson.

The appellant contends that as Williams & Stevenson, at the time of their assignment for the benefit of creditors, were not indebted to appellee on account of their joint liability with him on said note to the bank as co-principals, his subsequent payment of said liability in full, and with his own money was not an available...