International Harvester Co. v. Gully
| Decision Date | 11 March 1940 |
| Docket Number | 33912 |
| Citation | 188 Miss. 115,194 So. 472 |
| Court | Mississippi Supreme Court |
| Parties | INTERNATIONAL HARVESTER CO. v. GULLY, STATE TAX COLLECTOR |
APPEAL from the chancery court of Bolivar county HON. R. E. JACKSON Chancellor.
Proceeding by J. B. Gully, State Tax Collector, against Meyer Lafkowitz wherein an attachment was issued and levied on a certain motor truck as the property of Lafkowitz and wherein the International Harvester Company interposed a claim to the truck. From a decree in favor of the State Tax Collector, the International Harvester Company appeals. Reversed and judgment entered for the International Harvester Company.
Reversed and judgment here for the appellant.
Shands Elmore, Hallam & Causey, of Cleveland, for appellant.
Under Section 3428, Code of 1930, and the cases of Third National Bank of St. Louis v. Reeves Grocery Company, 113 Miss. 35 and Thornhill v. Gilmer, 4 S. & M. 153 the burden of proof was on appellee to show that the International truck was the property of Lafkowitz at the time when the attachment was levied and when the decree rendered against him and that such property as belonging to Lafkowitz was liable to execution or to be subjected to the payment of that decree. Appellee in order to prevail must show a right superior to that of appellant, and if he fails to do so, then the property cannot be subjected to the decree, regardless of whether appellant does or does not have any title or claim thereto.
Appellant contends that the proof in this case, consisting solely of the agreed statement of facts, does not sustain the appellee, and that he has not met the burden of proof required of him to show that the property belonged to Lafkowitz and was liable to his execution, or that appellant's claim was inferior to that of the appellee.
Lafkowitz had no interest in or possession of property attached when the writ was levied. Appellee's lien, if any, arose when writ was levied.
Slattery v. Renoudet Lbr. Co., Ltd., 125 Miss. 229; Sec. 130, Code of 1930.
Conditional sales contracts need not be recorded in Mississippi and are enforceable in favor of conditional vendor against all parties dealing with truck. Conditional vendee has no title until indebtedness is paid in full.
U. S. F. & G. Co. v. Northwestern Engineering Co., 146 Miss. 476; Am. Hoist & Derrick Co. v. Lynn, 167 Miss. 93; Mitchell v. Williams, 155 Miss. 343.
The Mississippi Sign Statute is not applicable here as state is not credited within statute.
McCulley v. Blanchard, (W.Va.), 169 S.E. 746; General Electric Co. v. Martin, 130 S.E. 299; Hamblett v. Steen, 65 Miss. 474; Bank v. Studebaker, 71 Miss. 544; State v. Marshall, 100 Miss. 626.
Truck was not in possession of Lafkowitz when lien arose by levy of writ of attachment on March 6th, and therefore sign statute is not applicable.
Capitol Motor Corp. v. Lasker, Inc. 123 S.E. 376; McCulley v. Blanchard (W.Va.), 169 S.E. 746; U.S. F. & G. Co. v. Northwestern Engineering Co., 146 Miss. 476; Mitchell v. Williams, 155 Miss. 343; Am. Hoist & Derrick Co. v. Lynn, 167 Miss. 93.
Bill of sale from M. Lafkowitz to Dora Lafkowitz filed for record on March 4th, prior to levy of writ of attachment on March 6th, constituted notice to appellee of the true ownership of the International truck and was a compliance with the sign statute.
Sec. 3352, Code of 1930; Binder v. Wineberg, 94 Miss. 817; Dead River Fishing and Hunting Club v. Stovall, 147 Miss. 385; Parker v. Foy, 43 Miss. 260.
Lafkowitz's right to use and possess the truck in his business ceased on March 1st, and thereafter his use thereof was not with the permission of International Harvester Company and the use of the truck by him, if within the sign statute, is in violation of the conditional sales contract and not with the permission or consent of International Harvester Company.
Bankston v. Hill, 134 Miss. 288; Archibald v. G. M. A. C., 172 Miss. 278.
The truck was not used in business which sold liquor and the operation of which business gave rise to the claim of appellee.
Orr v. Jackson Jitney Co. et al., 115 Miss. 140.
Lafkowitz perpetrated a fraud upon Planters' Equipment Company and International Harvester Company through which he obtained possession of the International truck, and International Harvester Company rescinded the entire transaction promptly upon learning the true facts--Lafkowitz acquired no interest and neither did Gully as against International Harvester Company in property the possession of which Lafkowitz acquired by that fraud.
This court has held that a defrauded vendor who retains the title and grants only the possession of personal property to a fraudulent vendee may rescind that transaction upon learning the truth. Appellant did this "promptly" as appears from the agreed statement of facts.
Mays v. Thompson, 128 Miss. 561, 572; Frank, Herman & Co. v. Robinson et al., 65 Miss. 162; Williston on Contracts (Rev. Ed.), Secs. 1520, 1589.
W. W. Venable, of Clarksdale, and Denman & Everett, of Greenwood, for appellee.
The conveyance by defendant to his wife was void as an effort to hinder, delay, and defraud.
A conveyance made to hinder a creditor in collecting what is due him is just as void as one made to defraud.
Harman v. Hoskins, 56 Miss. 142; Henderson v. Downing, 24 Miss. 102; Shapiro v. Wilgus, 287 U.S. 348; 77 L.Ed. 355; Means v. Dowd, 128 U.S. 273, 32 L.Ed. 429.
If the intention to delay or defraud exists, it may not be the debtors primary, active, and controlling purpose. It is sufficient if it be one of the purposes.
24 Am. Jur., Fraudulent Conveyances, Sec. 11 and cases cited, notes 4 and 5.
Direct evidence of fraudulent intent is not essential. It may be proved circumstantially.
Parkhurst v. McGraw, 24 Miss. 134; Bank of Brunson v. Graham, 335 Mo. 1196, 96 A. L. R. 399.
Such a finding may be arrived at by way of inference from the facts and circumstances attending the transaction.
Evans v. Cheatam, 183 Ark. 82; Van Raalte v. Harrington, 101 Mo. 602, 11 L. R. A. 424; Note: 90 A. S. R. 505.
In considering the issue of fraud the relationship between the parties may properly be considered.
Russel v. Davis, 133 Ala. 647, 31 So. 514; Annotations 32 L. R. A. 67; Seitz v. Mitchell, 94 U.S. 580, 24 L.Ed. 179; Shaner v. Alterton, 151 U.S. 607, 38 L.Ed. 286.
The court below found as a fact that the intent existed to hinder, delay, and defraud appellee and in his finding ignored the transfer of Lafkowitz to his wife.
A finding of fact by a chancellor will not be disturbed if supported by some competent evidence unless it is against the overwhelming weight of the evidence.
Louis Werner Sawmill Co. v. Northcutt, 161 Miss. 441; Northern Assur. Co. v. Lbr. Co., 105 Miss. 688; Sykes v. Sykes, 162 Miss. 487; Partee v. Bedford, 51 Miss. 84.
It is to be borne in mind that Mrs. Lafkowitz, if she were an innocent purchaser for value, got title to the truck free from any right of appellant to rescind. Where a seller is induced to sell by a buyer's fraud, he can only rescind and recover possession of the property while it remains in the buyer's possession.
Mays v. Thompson, 128 Miss. 561; Lee v. Portwood, 41 Miss. 109.
As commonly expressed, a bona fide purchaser for value of the voidable title of the fraudulent person acquires an indefeasible title.
Lee v. Portwood, 41 Miss. 109; Restatement of Contracts, Sec. 476, Comment E; Restatement, Restitution, 172, Sec. 13; Restatement of Trusts, Sec. 284; 5 Williston and Thompson on Contracts, Sec. 1531.
It is submitted that in view of the facts the decision by the chancellor that the conveyance to her was made to hinder, delay, and defraud creditors and also that the rescission had like effect is amply supported by the evidence.
If the sale of Lafkowitz to his wife was a fraudulent conveyance as found by the chancellor, it may be ignored and the creditor may pursue his process for satisfaction as though the title were unincumbered by the invalid conveyance.
Thomason v. Neeley, 50 Miss. 310; Shaw v. Millsaps, 50 Miss. 380; Peters Branch International Shoe Co. v. Gunn, 121 Miss. 679.
It follows that at the time appellee levied upon the truck, as far as he was concerned, it was the truck of defendant and liable to be taken for his debts.
An attaching creditor has the same rights as an innocent purchaser for value, it is held by some courts.
Bridgham v. Hinds, 120 Me. 444, 21 A. L. R. 1031; Lanfear v. Sumner, 17 Mass. 110, 9 A. D. 119.
Appellee's rights had accrued prior to the attempted rescission and could not be affected thereby.
The sale of Lafkowitz to his wife being void and to be ignored, appellant cannot predicate any right upon its title retention contract.
Paine v. Hall's Safe and Lock Co., 64 Miss. 175; Fitzgerald v. Mfg. Co., 114 Miss. 580; Lyons v. Steel, 86 Miss. 261; Young v. Terry, 192 Miss. 286.
It is settled in Mississippi by a long line of decisions that a title retention contract in its legal effect is a chattel mortage. It is true that the seller retains the legal title, but this is to be used only to gain possession for purposes of sale.
U. S. F. & G. Co. v. North West Engineering Co., 146 Miss. 476; Mitchell v. Williams, 155 Miss. 343.
In Gumbel v. Koon, 59 Miss. 264, this court decided expressly that reliance upon apparent ownership was not necessary and further decided that actual knowledge or notice on the part of the creditor that the one conducting the business did not own it did not prevent the application of the statute. The court held that it would not engraft exceptions to the terms of the statute as written.
Meridian, etc., Co. v. Ormond, 82 Miss. 758.
The statute in its language is not confirmed to commercial creditors. A non-commercial...
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