Emmons-hawkins Hardware Co v. Sizemore

• Citation: 145 S.E. 438
• Decision Date: 30 October 1928
• Docket Number: (No. 6218.)
• Court: Supreme Court of West Virginia
• Parties: EMMONS-HAWKINS HARDWARE CO. v. SIZEMORE.

145 S.E. 438

EMMONS-HAWKINS HARDWARE CO.

v.SIZEMORE.

(No. 6218.)

Supreme Court of Appeals of West Virginia.

Oct. 30, 1928.

(Syllabus by the Court.)

Error to Circuit Court, McDowell County.

Action by the Emmons-Hawkins Hardware Company against O. K. Sizemore. Plaintiff recovered judgment against defendant, and after execution thereon proceeded against the Superior-Pocahontas Coal Company, as garnishee, by suggestion. Judgment dismissing the suggestion, and plaintiff brings error. Reversed and remanded.

F. C. Cook, of Northfork, and Samuel A. Christie, of Keystone, for plaintiff in error.

HATCHER, J. On July 30, 1924, O. K. Sizemore sold to the Superior-Pocahontas Coal Company a stock of merchandise and fixtures for $3,420.18, which amount is agreed to have been the full value thereof. No attempt was made to comply with the requirements of the Bulk Sales Law (Code 1923, c. 74, § 3a). The coal company paid $3,417.90 of the purchase price to certain creditors of Sizemore, and turned over to him the remainder of $2.2S. Afterwards other creditors of Sizemore recovered joint judgments against him and the company in the aggregate.amount of $1,736.48, which the company settled. The merchandise and fixtures so purchased have been disposed of. Sizemore owed the plaintiff $369.18 at the time of the sale, which is unpaid. It recovered a separate judgment against him for that amount, had an execution issued thereon, and then proceeded against the coal company by suggestion, under section 10, c. 141, Code. In answer thereto, the company denied being indebted to Sizemore in any amount. The lower court found that the coal company was not liable to the plaintiff, and dismissed the suggestion.

Garnishment is an ancillary statutory proceeding which has long been resorted to in aid of the collection of judgments. Its purpose is to divert to the judgment creditor a payment due the judgment debtor by a third person. Therefore it is generally held that the plaintiff can recover on a suggestion only when the garnishee is liable to the defendant. Shinn on Attachments and Garnishments, § 516 (a). This court has subscribed to that doctrine. Swann, Adm'r, v. Summers, 19 W. Va. 115. The rule is subject, however, to a well-recognized exception. Where there has been a fraudulent conveyance of the defendant's property, garnishment is held to be a proper procedure, irrespective of the grantee's liability to the defendant. Shinn, supra, § 588; Drake on Attachments (6th Ed.) § 458; 2 Moore on Fraud, Conveyances, pp. 743-745; 14 A. & E. Ency. 351; 27 C. J. 708, § 549. The courts find no logical distinction in the effect of actual fraud and statutory fraud, and afford the same remedy in each case, unless an exclusive statutory remedy is provided. Rothchild Bros. v. Trewella, 36 Wash. 679, 683, 79 P. 480, 481, 68 L. R. A. 281, 104 Am. St. Rep. 973; Hartwlg v. Rushing, 93 Or. 6, 21, 182 P. 177, 182. Garnishment is therefore uniformly favored in violations of the Bulk Sales Law. 12 R. C. L. p. 529, § 58; 27 C. J. p. 889, § 899; Joplin Supply Co. v. Smith, 182 Mo. App. 212, 226, 167 S. W. 649; Jaques & Tinsley Co. v. Warehouse Co., 131 Ga. 1, 62 S. E. 82; Owosso C. & S. Co. v. McIntosh & Warren, 107 Tex. 307, 179 S. W. 257, L. R. A. 1916B, 970, which has a valuable annotation commencing on page 974. The status of the purchaser in such case, as well as the remedy, is clearly stated in Interstate Rubber Co. v. Kaufman, 98 Neb. 562, 153 N. W. 585, as follows:

"The purchaser of a stock of merchandise transferred to him in violation of the Bulk Sales Law holds the property as trustee for the seller's creditors, and his liability in that capacity may be enforced by...