Krippendorf-Dittman Co. v. Trenoweth

• Decision Date: 11 March 1901
• Citation: 16 Colo.App. 178,64 P. 373
• Parties: KRIPPENDORF-DITTMAN CO. et al. v. TRENOWETH et al.
• Court: Colorado Court of Appeals

64 P. 373

16 Colo.App. 178

KRIPPENDORF-DITTMAN CO. et al. v. TRENOWETH et al.

Court of Appeals of Colorado

March 11, 1901

Error to district court, Gilpin county.

Suit by the Krippendorf-Dittman Company and others against Charles Trenoweth and others. From a decree in favor of defendants plaintiffs bring error. Reversed.

O.M Kendall, for plaintiffs in error.

H.M. Orahood and Chase Withrow, for defendants in error.

THOMSON J.

In July, 1897, Charles Trenoweth, a merchant doing business in Central City, being unable to meet his obligations, and being indebted to the Rocky Mountain National Bank in the sum of $6,000, and to certain other parties in sums aggregating $7,350, executed to Thomas H. Potter, the president of the bank, the following instrument in writing: "Know all men by these presents that I, Charles Trenoweth, of Central City Colorado, in consideration of the sum of thirteen thousand three hundred and fifty dollars ($13,350), to me in hand paid by Thomas H. Potter, of same place, the receipt whereof I do hereby acknowledge, have sold, assigned, transferred, and set over, and do hereby sell, assign, transfer, and set over, to said Thomas H. Potter, all my stock of goods, wares, and merchandise, clothing, gents' furnishing goods, hats caps, trunks, valises, show cases, two iron safes, counters, tables, shelving, one cash register, electric light fixtures, settees, desk, and all other furniture and fixtures, all now in the two stores occupied by said Charles Trenoweth on west side of Main street, south of and adjoining the First National Bank, in block No. 1, in said Central City, Gilpin county, Colorado, to have and to hold unto the said Thomas H. Potter, his heirs and assigns, forever. Witness my hand and seal this 27th day of July, 1896. [ Signed] Chas. Trenoweth. [ Seal.]" Upon the execution of the foregoing instrument, the bank surrendered to Charles Trenoweth the note evidencing part of his indebtedness to it, and credited him with the amount of his overdraft, in which the remainder consisted. In part consideration of the transfer, Potter also assumed the outside indebtedness of $7,350, and agreed to pay it. He thereupon took possession of the chattels, and by himself and his agent, H. Jacob Kruse, made sales from the property until January 21, 1897, when Potter sold the residue to Kruse for $4,200, taking his note for the amount. Kruse continued the business of selling the goods, replenishing the stock by the purchase of new goods, until April 19, 1897, when he sold what remained on hand to Josiah Paulglaze for $5,000. Paulglaze thereupon organized a corporation called the "Central Shoe & Clothing Company," to which he transferred the property in consideration of its issue to him of its entire capital stock, represented by 20,000 shares. The proceeds of sales of goods and money realized on the note of Kruse were, from time to time, turned over to the bank and the creditors whose claims had been assumed, proportionately, until each of those creditors was paid in full, and the bank received the amount, principal and interest, of Charles Trenoweth's note, in cash. On the 21st day of July, 1896, Charles Trenoweth, being indebted to his brother, Thomas H. Trenoweth, upon a promissory note made by him on the 21st day of March, 1891, in the sum of $1,000, conveyed to the latter, in payment of the note, an undivided one-third interest in the East Centennial lode mining claim, in Gilpin county. The Krippendorf-Dittman Company and the Giesecke Boot & Shoe Manufacturing Company, creditors of Charles Trenoweth, whose claims had been reduced to judgment, and executions in whose favor had been returned wholly unsatisfied, brought this action against Charles Trenoweth, Thomas H. Potter, the Rocky Mountain National Bank, H. Jacob Kruse, Thomas H. Trenoweth, and the Central Shoe & Clothing Company, to set aside the several transfers of the goods, fixtures, etc., and the conveyance of the mining interest, praying that the property and the moneys collected be subjected to the payment of their judgment, and praying, also, for an accounting of the proceeds of the goods sold and moneys received to the use of Trenoweth, alleging that the transfers and conveyance were fraudulent to the knowledge of every participant in the transaction, and were colorable merely, and made for the purpose of hindering and delaying the unpreferred creditors of Trenoweth. The complaint also alleged that, as part of the transaction between Charles Trenoweth and Potter, the former transferred to the latter book accounts to the amount of $10,000, half of which were collectible, with the same general purpose of defeating just claims against him. The court, after hearing the evidence, found that the transaction evidenced by the bill of sale was an absolute sale, without taint of fraud, and that the conveyance to Thomas H. Trenoweth was made in good faith. The judgment was for the defendants, and the plaintiffs prosecute error.

Before the several transactions of which we have spoken were closed Brown Bros. & Co., creditors of Charles Trenoweth, caused a writ of attachment to be issued in a suit brought by them against him,...