Hetterman Bros. Co. v. Young
| Citation | 52 S.W. 532 |
| Parties | HETTERMAN BROS. CO. et al. v. YOUNG et al. |
| Decision Date | 02 March 1898 |
| Court | Tennessee Supreme Court |
Bill by the Hetterman Bros. Co. and others against Young & Trousdale and others to set aside an alleged fraudulent sale of a stock of merchandise. From a decree of the chancellor dismissing the bill as to some of the defendants, complainants appeal. Modified.
Barthell & Keeble and Stokes & Stokes, for appellants. Chambers & Zarecor and Lellyett & Barr, for appellees.
This is an attachment bill seeking to collect certain debts alleged to be due the complainants from the firm of Young & Trousdale, and alleging an absconding of one of the defendants, the fraudulent removal of property from the county, the fraudulent concealment of property, and a probable fraudulent conveyance of certain property which had been sold by the defendant Young to the defendant J. T. Odum, and by him to the defendant William Odum, which property was attached. These two defendants answered denying any fraud in the conveyance of the property to them, and William Odum claimed the property as having been bought by him in good faith and for a valuable consideration. The chancellor dismissed the bill as to the defendants Odum, held that the grounds for suing out the attachments were not sustained, and ordered a reference as to the damage sustained by the defendant William Odum by reason of an attachment levied on his property. From this decree the complainants appealed, and have assigned errors.
It will be proper to state in more detail the frame and charges of the bill. In substance, the bill alleges that the defendants Young & Trousdale were engaged as dealers in tobacco, cigars, etc., in the city of Nashville, and were indebted to the complainants in various amounts set out in the bill, which aggregate something like $2,000; that these accounts were justly owing and unpaid; that on the night before the bill was filed (the bill being filed on January 18, 1896), the defendant Young entered the business house of the firm of Young & Trousdale, and, without the knowledge and consent of the defendant Trousdale, packed up and secretly carried away nearly the entire stock of goods, amounting to something near $3,000; that Young had left the city, and his whereabouts were unknown to the complainants or to his partner, Trousdale; that the complainants were informed that the goods taken by Young were taken and placed in a wagon and hauled away during the night, and carried to the town of Lebanon, where they were being fraudulently concealed by Young or some of his accomplices; and that the complainants believed they had been placed in the possession of the defendants William, J. T., or Ike Odum, or all of them. It was further alleged that the defendant Young was fraudulently concealing himself so that the ordinary process of law could not be served upon him; that he had absconded; that he was concealing himself and the property of the firm of Young & Trousdale; that, if he had disposed of the goods, he had done so fraudulently, for the purpose of defeating complainants and their debts; that he had secretly and privately, during the nighttime, removed himself out of the county. This, in substance, comprises all the charges and allegations of the bill. The prayer of the bill was that an attachment issue and be levied on the property of the defendants; that, on the hearing, complainants have a judgment for their debts against the defendants; that the property attached be subjected to the payment of their debts by a sale; and for general relief. The defendant Ike Odum answered, disclaiming any interest in the goods, or any connection with the transaction whatever, and no further relief was sought against him. The defendant William Odum answered, denying all charges of fraud; averring that he had bought the goods, which in the meantime had been attached, for value and in good faith, from his brother, J. T. Odum, and that he had fully paid for them before the attachment. He further said in his answer that he knew nothing about the claims of complainants, — whether they were just and due, or not. The defendant S. K. Young filed a demurrer to so much of the bill as sought to recover judgment on the debts sued for on the ground that they were not shown to be due. This defendant also filed a plea taking issue on the ground of the attachment alleged in the bill. J. T. Odum filed an answer, in which he said he knew nothing about the claims alleged to be due the complainants; admitted the purchase by him of the stock of goods in question from the defendant Young, and that he had sold them to his brother William Odum for a profit of $156, all of which had been paid by both parties. He denied all fraud. Defendant Trousdale filed an answer in which he said he admitted the debts sued on by the complainants; that on or about January 23, 1895, he had entered into a partnership with his co-defendant S. K. Young; that the business was conducted under this name until January 9, 1896, but that soon after the organization of the partnership, the respondent having failed to furnish the capital agreed on, by a private arrangement with Young respondent ceased to be a partner, and became a clerk in the business, but that this withdrawal from the firm and employment as a clerk were not published, made public, nor communicated to their creditors, or those with whom they dealt. This answer further admits substantially all the balance of the charges of the bill, and joins in the request of the complainants that the property be attached.
The undisputed facts of this transaction appear to be about as follows: Young and Trousdale had formed a partnership, going into the business of selling tobacco and cigars, about January 1, 1895. Young had furnished all the money that was put into the firm, though Trousdale had agreed to put in his share. Trousdale says he was to put in $1,000; Young says more. Trousdale failed to put in his share, and, on that account, soon after the firm was organized, as between the partners the arrangement was changed. Trousdale dropped out, and was to have no further interest, but was employed as a clerk on a salary, and was paid during the year about $900. The business, however, was conducted in the name of Young & Trousdale, and the public, creditors, and those with whom they dealt were not informed of the change. Some weeks prior to January 17, 1896, it appears that Young desired to close out the business, and had determined to sell the stock of goods. He had tried to sell this stock of goods to other parties, residing in Lebanon, Tenn., where the defendant J. T. Odum resided at the time of this transaction. He had for some days prior to the 17th negotiations with the defendant William Odum, brother to J. T. Odum, in reference to purchasing the stock. On the night of January 17th a trade was completed by which Young sold almost the entire stock of cigars and tobaccos then in the store to the defendant J. T. Odum. The goods were loaded up in wagons which left Nashville at 12 o'clock at night, and were taken to Lebanon, which point was reached about 8 o'clock the next morning. The goods were placed in the store of Odum & Hamah, the Odum of the firm being another brother of defendant J. T. Odum. J. T. Odum paid Young $700 in currency for these goods at Nashville, and paid him $550 about noon the next day at Lebanon. About noon or early in the afternoon of the 18th, and before the attachment was levied, J. T. Odum sold and delivered these goods to his brother, the defendant William Odum, who paid him for them. J. T. Odum bought the goods from Young at a discount of 33 1/3 per cent. of their cost price, and paid him therefor, as above stated, the sum of $1,250. J. T. Odum sold to his brother William Odum at an advance of about $148, receiving therefor $1,398. Thereafter the goods were levied on by the attachments sued out in this case. At the time of this sale, according to the evidence of the defendant Trousdale, the firm was insolvent. The defendant Young received the entire cash paid by J. T. Odum, placed the same in his pocket, and left the country, going to Texas, and, so far as this record shows, applied only about $100 so received to the payment of the firm debts. After the goods were attached, a receiver was appointed, who sold the goods, and received therefor $1,367, — a little over $100 more than J. T. Odum gave for them, and about $31 less than William Odum gave for them, — and the receiver was engaged about two months in selling them. These, as we say, are the undisputed facts in connection with this transaction. The disputed facts and issues are about as follows: It is insisted by the complainants that, at the time J. T. Odum bought these goods from Young, Young and Trousdale were partners, and that Young had no right to sell out this entire stock of goods, and virtually put an end to the business, without the consent of Trousdale. This is a mixed question of law and fact. On the other hand, on this point, the defendants insist that, as a matter of fact, Trousdale was not a partner, but had many months before parted with his interest in the firm; and they insist, as a matter of law, that, in any event, Young had full power to dispose of the partnership assets. It is next insisted on behalf of the complainants that at the time of this transaction J. T. Odum knew (at least, he had sufficient to put him upon notice) that Young was making this sale for the purpose of perpetrating a fraud upon his creditors, hindering and delaying them, and for the purpose of turning these assets, which were subject to the claims of his creditors, into cash, in order that he might put the money into his pocket, and thus defeat and delay his creditors, and that in consequence he must be held to have participated in the fraud, and be liable to the creditors of the firm, and that this...
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