E. L. Martin & Co. v. A. B. Maggard & Son

• Decision Date: 13 January 1925
• Citation: 206 Ky. 558
• Parties: E. L. Martin & Co., et al. v. A. B. Maggard & Son and Lewis.
• Court: Kentucky Court of Appeals

206 Ky. 558

E. L. Martin & Co., et al. v. A. B. Maggard & Son and Lewis.

Court of Appeals of Kentucky.

Decided January 13, 1925.

Appeal from Leslie Circuit Court.

M. C. BEGLEY, J. M. MUNCY and WILL C. HOSKINS for appellants.

J. B. MINIARD for appellees.

OPINION OF THE COURT BY COMMISSIONER HOBSON — Reversing.

A. B. Maggard was a farmer living in Leslie county. About November, 1920, Henry Maggard, his son, opened a store near Causey, Kentucky, about four miles from his father's residence, in the name of A. B. Maggard & Son. The stationery used in the store was so printed and the business was so advertised in calendars sent out to the customers. In the spring of 1921 A. B. Maggard & Son built a storehouse on A. B. Maggard's land about one hundred yards from his residence and ran a store there for about three months in addition to the store near Causey. After three months this store was sold to Bige Maggard, a brother of Henry Maggard. The other store was run until October, 1921, when it burned down. At that time a number of bills for goods bought in the name of A. B. Maggard & Son were unpaid and suits were filed by a number of the creditors against A. B. Maggard &amp Son to collect them. On February 13, 1922, A. B. Maggard, in consideration of $3,000.00, cash in hand paid, conveyed to Larkin Lewis the farm on which he resided, which was all the property he owned subject to execution. E. L. Martin & Company filed this action November 28, 1921, to recover of A. B. Maggard and Henry Maggard their debt amounting to $264.14. On May 1, 1922, they filed an amended petition making Larkin Lewis a defendant, alleging that the conveyance by A. B. Maggard to Larkin Lewis was fraudulent and made with the intent to cheat, hinder and delay his creditors. They prayed that the deed be set aside and the land subjected to their debt. A. B. Maggard filed answer denying that he was a member of the firm. He and Lewis both denied that the deed to Lewis was fraudulent. Proof was taken and on final hearing the circuit court entered a personal judgment against Henry Maggard but dismissed the action as to A. B. Maggard and Larkin Lewis. The plaintiffs have filed a transcript of the record and entered a motion for an appeal, their debt being less than $500.00.

Henry Maggard swears that his father knew the business was done in the name of A. B. Maggard & Son from the beginning and acquiesced in it. A. B. Maggard denies this, but admits that he did learn this in June, 1921, and says he told Henry when he sold out to Bige if he bought one more bill of goods in his name he would bring suit against him. But the fact is he did not bring suit or do anything until the storehouse was burned and the creditors were suing him for the unpaid bills. In the meantime the store was run as before in the name of A. B. Maggard & Son.

Both A. B. Maggard and Larkin Lewis testify that the sale of the farm was a good faith transaction, without any intent to hinder or delay the creditors of A. B. Maggard, but they both knew at the time of the transaction of the numerous suits which had been filed against A. B. Maggard as the partner of his son and they both knew that the land was all the property of A. B. Maggard subject to execution.

The rule ordinarily is that a man is held to know what a man of ordinary prudence and judgment would know under the facts known to him. Under this rule it is hard to understand how A. B. Maggard could fail to know the name in...