Ex parte Kenmore Shoe Co.

• Decision Date: 21 July 1897
• Citation: Ex parte Kenmore Shoe Co., 27 S.E. 682, 50 S.C. 140 (S.C. 1897)
• Parties: Ex parte KENMORE SHOE CO. et al. v. FOSTER et al. MERCHANTS COFFEE CO.
• Court: South Carolina Supreme Court

27 S.E. 682

50 S.C. 140

Ex parte KENMORE SHOE CO. et al.

MERCHANTS COFFEE CO. v. FOSTER et al.

Supreme Court of South Carolina

July 21, 1897

Appeal from common pleas circuit court of Greenville county; I. D Witherspoon, Judge.

The Kenmore Shoe Company and others intervened in the cause of the Merchants' Coffee Company against J. A. Foster & Co. and others. From the decree, interveners appeal. Affirmed.

The decree of the circuit court is as follows:

"This case was heard by me at the November term, 1896, of the court of common pleas for said county and state, upon exceptions to the report of B. M. Shaman, special referee. The facts of the case, as gathered from the report of the referee, and the evidence in the case, are as follows: The defendant W. S. Good was during the fall of the year 1895 engaged in the business of the merchant, doing business in his own name at Marietta, county and state aforesaid, and also as a member of the firm of J. A. Foster & Co., a co-partnership doing business in Greenville city, county and state aforesaid, which co-partnership was composed of one J. A. Foster and the said W. S. Good. The said J. A Foster & Co. began business August 8, 1895, and went out of business, by reason of the foreclosure of a mortgage existing over their stock of goods, on December 16, 1895. The said W. S. Good, during the summer of 1895, executed a chattel mortgage over his Marietta stock of goods to his wife, Nannie J. Good, to secure an alleged indebtedness of one thousand dollars, which mortgage was recorded on ___ day of October, 1895; and on the 28th day of December 1895, the said W. S. Good turned over to the said Nannie J. Good the said Marietta stock of goods under a bill of sale of that date. The alleged W. S. Good Company received its certificate of charter on the 1st day of January, 1896. The purpose of the alleged corporation was that of trading buying, and selling goods and merchandise. The said alleged corporation was capitalized at three thousand dollars; the capital stock consisting of thirty shares at one hundred dollars per share. The said Nannie J. Good was the alleged principal stockholder in the said corporation, she having taken, as it was claimed, twenty-eight shares of stock; and the said W. S. Good is alleged to have taken one share therein, and one Sammons also one share therein. According to the report of the referee,--and as to this no exception has been taken,--neither the said W. S. Good nor the said Sammons paid any money for their said shares. The said Nannie J. Good claimed that the consideration of her twenty-eight shares of said stock was the Marietta stock of goods, which she claims to have gotten from her husband W S. Good, and which she claims to have put into the stock of the alleged W. S. Good Company; and also one thousand dollars in cash, which she claims to have put in said company in payment of her said shares of stock. The said Nannie J. Good was the alleged president of said corporation, and the said W. S. Good was its alleged secretary and treasurer and business manager. The said Marietta stock of goods put into the alleged W. S. Good Company was supplemented by other stock, and this stock was sold from time to time, and replenished with other stock. W. S. Good having testified in this case that when he sold goods put into the W. S. Good Company by Mrs. Nannie J. Good, the proceeds of such sale went into the business of said company, just as the proceeds from the sale of any other goods alleged to belong to the said W. S. Good Company. On the 12th day of February, 1896, while the said alleged corporation was engaged in business, the principal action herein was begun by plaintiffs therein on behalf of themselves and all other creditors of the said J. A. Foster & Co. and the said W. S. Good, in an action for goods sold and delivered to J. A. Foster & Co. between September 21 and November 4, 1895, against J. A. Foster & Co., the said W. S. Good in his individual capacity, and the said W. S. Good Company and Nannie J. Good. In the said action plaintiffs asked that the transfer of property from said W. S. Good to said Nannie J. Good--being the Marietta stock of goods--be declared fraudulent and void as against the creditors of W. S. Good and J. A. Foster & Co., and also to have the property of the said W. S. Good Company declared the property to the said W. S. Good to said Nannie J. Good, it being alleged by the plaintiffs that the transfer of said property to the said Nannie J. Good and the formation of the said corporation were all done for the purpose and with the intention of hindering, delaying, and defrauding the creditors of said W. S. Good and the said J. A. Foster & Co.; and that the property of said alleged corporation was in fact and reality the property of W. S. Good, cloaked and covered by the name of said corporation, in order to defeat and defraud his creditors. It was also alleged in paragraph 14 of plaintiffs' first cause of action, and paragraph 15 of the second cause of action, 'that the said W. S. Good Company, as plaintiffs are informed and believe, is daily selling and disposing of the property alleged to belong to it, and since its alleged organization has contracted an indebtedness of something over six hundred dollars,' and this was denied by defendants in their answer. The said complaint also asked that the defendant W. S. Good Company be enjoined from selling, disposing of, or in any way interfering with the said stock of goods or the assets of said W. S. Good Company until the further order of this court. Also asked for the appointment of a receiver, and that all creditors of the said W. S. Good and J. A. Foster & Co. be called in, and allowed to prove their claims in this action. An order for temporary injunction was also had, and served with a copy of the pleadings. Said injunction was never dissolved, but the alleged W. S. Good Company was allowed to resume business upon the execution of a bond, which it did, and on the ___ day of February, 1896, the said alleged W. S. Good Company resumed business and continued until the final order herein. The issues in the said case were referred to the master for said county and state, to take the testimony and report the same to this court. The case was heard by his honor, Judge Jos. H. Earle, who on the 8th day of April, 1896, pronounced the decree in said cause, in which he sustained the action of plaintiffs, holding that all of the allegations above noted were sustained by the evidence in the cause, and adjudged that the property transferred by the said W. S. Good to the said N. J. Good was transferred without valuable consideration, and with the intention to hinder, delay, and defraud his creditors; that the said corporation was formed with a like intent; that the value of the stock of goods put in the alleged corporation by Nannie J. Good, known as the 'Marietta stock of goods,' was twelve hundred dollars; that the said Nannie J. Good did not put into the alleged W. S. Good Company the amount of money claimed by her; that, if she put any money in the said W. S. Good Company, she would have the right to prove the amount, and recover the same, as any other creditor of the said W. S. Good or J. A. Foster & Co. He further says: 'I find and decree the stock of goods and as sets alleged to belong to the W. S. Good Company to be the property of the defendant W. S. Good, and subject to his debt.'. His honor appointed a receiver of the assets of J. A. Foster & Co., W. S. Good, and the alleged W. S. Good Company, and authorized and required him to take immediate possession of said assets, convert the same into cash, and hold the same subject to the further order of the court. He also directed and decreed that all of the creditors of the said W. S. Good and J. A. Foster & Co. be allowed to come forward, and establish their claims before the master of this court, who shall call upon them so to do by advertising the same; and that they be paid their respective claims out of the funds herein provided for as the law directs. He also referred it to the master to ascertain and report what would be a reasonable fee to be paid out of the said estate for the attorneys for the plaintiffs of record in the said case. The receiver immediately took possession of the said property, sold the stock of goods, and collected certain accounts, all of which, as stated by the referee, amounted to between eleven and twelve hundred dollars, and the same is now in his hands. A notice has been published, requiring the creditors of the said W. S. Good and J. A. Foster & Co. and the alleged W. S. Good Company to establish their claims before D. P. Verner, master; and all of said parties have proven claims before said master, as appears by his report herein, and the report of the referee, to which there is no exception. On June 6, 1896, the Kenmore Shoe Company filed a petition in behalf of themselves and all other creditors of said W. S. Good Company, asking to intervene in said cause, alleging that they are creditors of the said W. S. Good Company, and that said corporation was duly created and organized according to law, and that it reported said organization to petitioners and other creditors of the same, and that it had a capital stock of three thousand dollars, and that upon the faith of this organization and report the petitioners and said other creditors sold said corporation goods as stated in said petition. The petitioners claim that the creditors of W. S. Good Company are entitled to priority of payment in the distribution of the assets of the W. S. Good Company; that is to say, the Kenmore Shoe Company alleged that they sold a bill amounting to one hundred and six and ninety-five one-hundredths dollars on February 3, 1896. Wm. T. Beidler

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