First Nat. Bank v. Asheville Furniture & Lumber Co.

• Decision Date: 17 May 1895
• Parties: FIRST NAT. BANK OF SPRINGFIELD et al. v. ASHEVILLE FURNITURE & LUMBER CO et al.
• Court: North Carolina Supreme Court

21 S.E. 948

116 N.C. 827

FIRST NAT. BANK OF SPRINGFIELD et al. v. ASHEVILLE FURNITURE & LUMBER CO et al.

Supreme Court of North Carolina

May 17, 1895

Appeal from superior court, Buncombe county; Armfield, Judge.

Actions by the First National Bank of Springfield, Ohio, and the Mad River National Bank, against the Asheville Furniture & Lumber Company, were consolidated. Property of defendant was attached by plaintiff in each action, and the National Bank of Asheville and others intervened, claiming the property. From a judgment for interveners, the plaintiff in each action appeals. Reversed.

The treasurer of a corporation engaged in the manufacture of furniture, who had general charge of its business, with power to sell goods, purchase material, borrow money, and pay debts, took the entire stock of furniture and a large quantity of lumber belonging to the company, agreed on a value for it with certain corporate creditors, and turned it over to them, to be applied on the company's debts to them, some of which were not then due. Held, that the treasurer exceeded his authority, and the attempted sale was void.

F. A Sondley and Moore & Moore, for appellants.

W. W Jones, C. M. Stedman, and M. E. Carter, for appellees.

MONTGOMERY J.

The plaintiffs, at the time of commencing their actions (afterwards consolidated and tried as one against the defendant, a corporation), issued and levied attachments upon certain real and personal property which they alleged belonged to the defendant. The National Bank of Asheville the Battery Park Bank, and the Western Carolina Bank, the appellees, intervene, and claim the personal property attached by virtue of an alleged purchase by them from the defendant, on the 4th of November, 1891 (20 days before the attachments were levied). The only matter for our decision is whether that sale and purchase constituted a valid transaction, and passed the title to the property to the interveners. The interveners, having to show by preponderance of testimony their title to the property, took upon themselves that burden, and attempted to show a valid sale to them, at a fair price, by an agent of the defendant. The verdict of the jury establishes the sufficiency of the price agreed on as a fair one, and there is no contention over that matter. It is admitted by all parties that the property which the interveners claim under the alleged sale embraces the entire stock of manufactured goods (furniture) which the defendant had on hand at the time of the sale, valued at about $19,000, and also a lot of flooring, valued at about $3,000. W. W. Avery, the defendant's agent, who made the alleged sale to the interveners, testified that he got a full price for it, but explains that the interveners were creditors of the defendant, some of the debts not being due at the time of the sale, and that they took the property at the price agreed on ($22,081.11) "as a payment on their debts." The witness Avery, in writing to the secretary of the defendant corporation, two days after the alleged sale, made the following statement of the transaction: "Asheville, N. C., Nov. 6th, 1891. Mr. Wm. Edminston, Knoxville, Tenn.--Dear Sir: As telegraphed you last night, the three banks here, acting together, attached for the overdue debts due them. But they have not sued us individually, and I do not think they will, if we can make the property pay them out. They were all cocked and primed for me when I went up yesterday afternoon to meet them at five o'clock; had all the papers issued and ready to serve. I wanted to get some time, but they would not consent to give me any, as they seemed to be afraid some other creditor would come down on us and get the drop on us before they did. They were going to attach everything we had, and I knew that if they did so, and got all our property into the hands of a receiver, it would be sacrificed to such an extent that it would never come anywhere near paying our debts. As all of the creditors of the concern would be treated alike by the receiver, there would be a great deal of paper left unpaid with our personal indorsement on it, and on this paper we would be sued, and none of us ever get out from under the load of debts and judgments that would be piled up against us. So I asked them if they would be willing to take our furniture and lumber as a payment on the paper which they held against us, and on which we were individually indorsed, and give us an opportunity to sell it for them, and get as much out of it to pay on these papers as we could. After consulting some time, they agreed to do this, and I made the sale to them, as it was the only thing left for me to do, and seemed to be the best thing I could do for all of us. *** But they still insisted upon attaching our real estate and personal property for the overdue debts, in order, as they said, to make themselves secure. This they did yesterday afternoon, and our factory is now in the hands of the sheriff. To-day they seem to feel that their debts against us are secure, and, while I do not know positively, I think they will be inclined to let us work it out, if we feel so disposed, and make the property pay them as much as we can of their debts; but they have come down on us so suddenly and unexpectedly that I have no confidence left in any of them. ***"

The question now arises, did W. W. Avery have authority to dispose of the property in the manner in which he did? As to his general powers, he was the treasurer of the company, and he testified that he "sold all the furniture manufactured at the works of the company," and "used the proceeds of sale for the benefit of the company in carrying on its general business"; that it was agreed that he should stay at Asheville, and run the business; that from the formation of defendant company he had charge of it, managed it, sold its furniture, borrowed money for it, and paid its debts; that he had done this "for two years, and up to the date when the furniture in question was sold to the interveners, without any objection from the directors or stockholders or corporation, but with their full knowledge and consent, and that he managed all the affairs of the company." And it is also contended for the interveners that if the alleged sale by Avery was outside the scope of his general powers, described as above, his conduct was, nevertheless, authorized by the directors of the defendant corporation, who afterwards met at Cincinnati, and ...