Chipman v. Stern

• Decision Date: 08 April 1890
• Citation: 7 So. 409,89 Ala. 207
• Parties: CHIPMAN ET AL. v. STERN ET AL.
• Court: Alabama Supreme Court

7 So. 409

89 Ala. 207

CHIPMAN ET AL. v. STERN ET AL.

Supreme Court of Alabama

April 8, 1890

Appeal from chancery court, Mobile county; THOMAS W. COLEMAN Chancellor.

Suit in equity by Stern & Co. against Chipman, Calley & Co. to set aside a sale of goods by A. Curtis & Co. to defendants for fraud. On submission of the cause for final decree on the pleadings and proof, the chancellor decreed that complainants were entitled to the relief prayed, and set aside the sale as fraudulent. Defendants appeal.

M Wickersham and R. P. Deshon, for appellants.

llans, Torrey & Hanaw, for appellees.

CLOPTON J.

On November 30, 1887, Adam Curtis, a merchant engaged in the retail boot and shoe business in Mobile under the name of "A. Curtis & Co.," sold and transferred his entire property, not claimed as exempt, to Chipman, Calley & Co. Appellees, who were, prior to and at the time of the sale, creditors of A. Curtis & Co., by the bill assail the transaction as fraudulent. The consideration paid was the payment and satisfaction of an indebtedness due by Curtis & Co. to Chipman, Calley & Co., and their promise and agreement to pay debts due by him to other named persons, amounting in the aggregate to $6,445.43. The transaction was evidenced by three different written instruments.-a bill of sale to the stock of goods, book-accounts, and store fixtures and equipments; an assignment of the leasehold interest in the store-house then occupied by Curtis; and an agreement for the satisfaction and payment of the specified debts. Complainants do not controvert the rule, well settled by repeated decisions of this court, that an insolvent debtor may prefer one or more his creditors to the exclusion of others, and that an absolute sale of the whole of his property in payment of an antecedent bona fide debt, at a reasonably fair price, not reserving or securing to himself any benefit or trust by which he may be benefited, is valid, and will be sustained, whatever may have been his intentions, and whatever notice the preferred creditor may have of such intentions. Neither is the transaction rendered fraudulent by reason of an express stipulation that the purchasing creditor will pay debts due to other specified creditors, and such debts are in fact paid. Hodges v. Coleman, 76 Ala. 103; Levy v. Williams, 79 Ala. 171; Rankin v. Vandiver, 78 Ala. 562.

In the original bill the main attack was made on the alleged grounds that the value of the stock of goods, accounts, and fixtures was greatly in excess of the amount of the indebtedness to Chipman, Calley & Co., and of the debts assumed to be paid, and that a secret understanding existed whereby a benefit was reserved to Curtis. The amendment to the bill specifically charges that the transfer of the leasehold interest was upon a secret consideration to be paid to Curtis, or was without consideration, and operated to secure a benefit to him, and to put the leasehold beyond the reach of his creditors. The amount and bona fides of the debts, the payment of which constituted the consideration price of the property, are not controverted. The amended bill alleges that at the time of, and contemporaneously with, the making of the bill of sale, Curtis, in addition to the goods and other property mentioned therein, sold or transferred to Chipman, Calley & Co. the leasehold interest in the store-house; and the evidence shows that all the written instruments were executed on the same day, and constituted one and the same transaction, and that the property mentioned in the bill of sale and the leasehold were included in the sale. In the trade the stock of goods was estimated at 75 cents on the dollar of the invoice or cost price, the book-accounts at $250, and the store fixtures and equipments at $388.08, making an aggregate of $5,997.43.

Having carefully considered the evidence relating to the value of the property, we are forced to differ with the chancellor as to his conclusion in this regard. The weight to be given to the opinion of witnesses of the value of property depends on their experience in dealing in such property, and their knowledge of its condition. All the witnesses, with one exception, examined on part of complainants as to value, and several examined by defendants, were unacquainted with the stock of goods or its condition. It therefore becomes material to ascertain as nearly as practicable the real condition of the stock at the time of the sale. The evidence shows that part of the stock on hand consisted of goods recovered by Curtis after being burned out, in 1886; that the goods which he purchased prior to March, 1887, had been on hand from 8 to 14 months, sales having been made therefrom which were not replenished, and a portion shop-worn, and the amount of the goods purchased from the 1st of August to the time of the sale was about $2,000. From the fact that the part of the stock taken by Curtis as exempt was valued by him at 5 per cent. less than the original cost, it is evident that they were selected from the new goods. From the testimony of the witnesses who knew the stock, and of those who examined the portion shipped to Boston, it sufficiently appears that the stock of boots and shoes, at the time of the sale, consisted of several hundred dollars' worth,-about $900,-which were greatly...