Gordon v. Lemp

• Decision Date: 03 June 1901
• Citation: Gordon v. Lemp, 7 Idaho 677, 65 P. 444 (Idaho 1901)
• Parties: GORDON v. LEMP
• Court: Idaho Supreme Court

65 P. 444

7 Idaho 677

GORDON v. LEMP

Supreme Court of Idaho

June 3, 1901

MOTION TO DISMISS-CROSS-ASSIGNMENT OF ERRORS.-When a respondent has properly saved exceptions and is in a position to present cross-assignments of error, such assignments must be presented within the time allowed for presenting amendment to a statement on motion for a new trial.

DEMURRER-Held that the complaint stated a cause of action.

CREDITOR'S BILL.-PROCEEDINGS SUPPLEMENTARY TO EXECUTION.-When proceedings supplementary to execution as provided in chapter 2, title 9, of the Revised Statutes, will not result in the application of the judgment debtor's property or money in the payment of the judgment, a creditor's bill will lie in favor of the judgment debtor. In such cases those proceedings are not adequate, and cannot accomplish the purpose of a creditor's bill.

JUDGMENT.-It is not error to enter judgment in an action commenced by creditor's bill for the full amount or value of the judgment debtor's property found to be in the hands of the defendant.

SPECIAL VERDICT OF JURY.-The court may make findings of fact of its own and adopt the special findings of the jury so far as they are not inconsistent with those of the court.

ADVISORY VERDICTS.-When a jury is called in an equity case and a special verdict rendered by it on instructions given by the court, such instructions are not reviewable on appeal as such verdict is only advisory, although such instructions should not be given.

(Syllabus by the court.)

APPEAL from District Court, Elmore County.

Affirmed. Costs awarded to respondents.

Wyman &amp Wyman and W. E. Borah, for Appellant.

We contend that a sufficient legal remedy was afforded in this case by the statute providing for proceedings supplemental to execution, and that that course must be pursued. In other words, the proceedings supplemental to execution, under our practice, takes the place of a creditor's bill at common law. (Adams v. Hackett, 7 Cal. 187-201; McCullogh v. Clark, 41 Cal. 298-302; Bank v Robinson, 57 Cal. 520; Rand v. Rand, 78 N.C. 12.) The complaint is entirely insufficient. Before equity can be invoked in such a case, it must be shown that remedies at law have been exhausted or would be unavailing; and with certain exceptions, of which the case at bar is not one, a necessary averment in a creditor's bill is that an execution has been returned unsatisfied. (Herrlich v. Kaufmann, 99 Cal. 271, 37 Am. St. Rep. 50, 33 P. 859; Castle v. Bader, 23 Cal. 76; Hager v. Shindler, 29 Cal. 48-58; Harris v. Taylor, 15 Cal. 350; Brown v. Farrowell, 74 F. 764.) Third persons supposed to have assets of the debtor in their possession may be made parties defendants with him and required to answer. (7 Am. & Eng. Ency. of Law, 160; Freeman on Executions, 410.)

Frank Martin, Hugh E. McElroy, Wood & Wilson, D. D. Williams and Bamford Robb, for Respondents.

The demurrer admits that plaintiffs have bona fide judgments against defendant Conner. It also admits that the transaction between Lemp and Conner was nothing but a chattel mortgage, consisting as it did of a bill of sale and note given for some consideration. (Pritchard v. Butler, 4 Idaho 518. 43 P. 73.) Statutory proceedings supplementary to execution are not exclusive of the jurisdiction of equity over creditors' bills to remove fraudulent transfers and to reach equitable assets. (Williams v. Sexton, 19 Wis. 42; Swift v. Arents, 4 Cal. 390; Burt v. Hoettinger, 28 Ind. 217; Bennett v. McGuire, 58 Barb. 625; Pope v. Cole, 64 Barb. 406; Taylor v. Perses, 15 How. Pr. 417; Taft v. Wright, 47 How. Pr. 1; Goodyear v. Betts, 7 How. Pr. 187; McKeitan v. Walker, 66 N.C. 95; Abbey v. Commercial Bank, 31 Miss. 434; Martin v. Atchinson, 2 Idaho 624, 33 P. 47; Sabin v. Burke, 4 Idaho 28, 37 P. 352.) We think the amended and supplemental complaint sufficiently states a cause of action. (Rapp v. Whittier, 113 Cal. 429, 45 P. 703; Matlock v. Babb, 31 Ore. 516, 49 P. 873; Enright v. Grant, 5 Utah 334, 15 P. 269; Monroe v. Reid. 46 Neb. 316, 64 N.W. 983; Feldenheimer v. Tressel, 6 Dak. 265, 43 N.W. 94.) The record in this case is encumbered with certain instructions to the jury as well as the special findings submitted to them by the court. This being an equity case, the findings of the jury are purely advisory, and these instructions and findings are wholly immaterial. (Kelly v. Perrault, 5 Idaho 221, 48 P. 45; Schneider v. Brown, 85 Cal. 206, 24 P. 715; Hewlett v. Pilcher, 85 Cal. 542, 24 P. 781; Riley v. Martinelli, 97 Cal. 575, 33 Am. St. Rep. 209, 32 P. 579.) A pleader is supposed to know his case and state it as it is, and it is a well-known rule of law that a pleading will be most strongly construed against the pleader. Furthermore, the failure to deny a material issue is an admission of it, and the admission is conclusive evidence of the fact. (Lillienthal v. Anderson, 1 Idaho 673; Burke v. McDonald, 2 Idaho 339, 3 P. 351.)

SULLIVAN, J. Quarles, C. J., concurs. Stockslager, J., did not sit in the case.

OPINION

SULLIVAN, J.

This action is in the nature of a creditors' bill, whereby creditors of defendant Conner sought to subject a certain stock of merchandise which was in the possession of appellant Lemp, to the payment of their judgments against Conner. It is alleged in the complaint: That the defendant Conner on March 25, 1896, was the owner of and in the possession of a stock of merchandise, furniture, and fixtures situated in Boise City, and was there conducting a retail mercantile business and on that date executed to appellant, Lemp, a certain promissory note for $ 7,740; with interest due one day after date, and also at the same time, and for the same consideration, executed to appellant, Lemp, a written contract, marked "Exhibit 'A,'" purporting thereby to sell and convey to said Lemp said stock of merchandise. That said contract had attached thereto the affidavit and acknowledgment of defendant Conner, as required by law in case of chattel mortgage. That said contract has never been filed for record, and had been kept secret and was not disclosed to plaintiffs until after the delivery of the possession of said stock of merchandise by said Conner to appellant, Lemp, on or about the eighteenth day of November, 1896. That said possession was demanded and received under and by virtue of said contract, Exhibit "A." That by the terms of said contract the said Conner was appointed the agent of Lemp to take charge of said property, to hold and dispose of the same in regular course of trade, and to keep up said stock of goods, as near as could be, to its then quality and value, and every six months to render an account and pay over to said Lemp all the receipts arising from the sale of any of said merchandise, less the actual expense of carrying on and operating said business. That Conner remained in possession of goods from March 25, 1896, to November 18, 1896, conducting a retail business therewith, and added goods thereto by purchases amounting to $ 8,000; $ 3,042.70 thereof being included in the judgments against Conner aforesaid. That execution was duly issued on several of said judgments against the property of Conner, and returned nulla bona. That Conner remained in the possession of said stock of goods until November 18, 1896, at which time he was insolvent and hard pressed by his creditors, which Lemp well knew, and thereupon Lemp demanded and received from Conner the possession of said stock of goods, together with the goods purchased by said Conner subsequent to the execution of the said contract dated March 25, 1896, and that the value of the goods so purchased by Conner and delivered to Lemp was $ 4,500. That Lemp had never foreclosed said contract as a chattel mortgage. That, after taking possession thereof as aforesaid, he engaged in selling the same at retail, and so continued to the date of the commencement of this action, and refused to account for the proceeds thereof either to Conner or the plaintiffs, and that Lemp had realized from said sales the sum of $ 14,000, and that a considerable portion of said goods remained unsold and unaccounted for to Conner. That said contract and promissory note were executed and kept secret for the purpose of enabling Conner to continue in business while insolvent, purchasing goods on credit, and applying the proceeds of sales to his own use, until such time as Lemp should consider himself insecure, when he should claim and take possession thereof under said contract; the same to be taken in consideration of any balance due Lemp. That, in pursuance of said purpose, Conner made purchases from plaintiffs without revealing the existence of said contract, thereby keeping his stock replenished, and continued in business, and converted the proceeds of sales to the amount of $ 5,000 to his own use, all of which was done with the knowledge and consent of Lemp. That on the eighteenth day of November, 1896, Conner delivered his books of account kept in said business to Lemp, which books evidence accounts due to said Conner to the amount of $ 800, and that Lemp claims to be the owner thereof. That said transfer is without consideration and in trust for Conner. Plaintiffs pray that said contract be adjudged to be a chattel mortgage upon the property described therein, and not upon the subsequent additions thereto, and that the court determine the amount of the consideration of said mortgage, and the balance due thereon; that the court adjudge said mortgage void as against the claims of plaintiffs, and that plaintiffs' claims be adjudged to be a prior lien upon the whole of the property turned over to Lemp on November 18, 1896, as well as upon the proceeds thereof received by him; that the court determine the priority of liens as between pla...