L. & A. Scharff Distilling Co. v. Dennis

• Decision Date: 01 June 1914
• Docket Number: (No. 9.)
• Citation: 168 S.W. 141
• Parties: L. & A. SCHARFF DISTILLING CO. v. DENNIS.
• Court: Arkansas Supreme Court

168 S.W. 141

L. & A. SCHARFF DISTILLING CO. v. DENNIS.

(No. 9.)

Supreme Court of Arkansas.

June 1, 1914.

Appeal from Circuit Court, Polk County; Jefferson T. Cowling, Judge.

Action by the L. & A. Scharff Distilling Company against G. B. Dennis, trustee in bankruptcy of E. R. Lyman. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

E. R. Lyman, in January, 1913, was engaged in the retail liquor business in Mena. He bought a large part of his stock from the appellant, and on the 6th of May, 1913, he was indebted to appellant in the sum of $733.89. Appellant sent its agent to Mena to collect this balance due on account. Appellant's agent saw Lyman on the 6th of May, and Lyman told him that he was in trouble and did not have the money to pay him; but he said, "I have got your goods there." They agreed that plaintiff should have the goods that it had previously sold to Lyman in satisfaction of the debt due from Lyman to appellant. The testimony of appellant's agent was to the effect that the goods, which consisted of barrels, cases, and kegs of whisky, brandy, etc., were separated from the other goods of Lyman's stock. Some of the cases that had been broken were recased. But before the goods were taken away Lyman's brother came in and wanted the agent to leave the case goods and take some other goods in the place of them, and when the agent went back Lyman's brother refused to deliver the goods. When the goods that appellant had sold were being separated from the other goods in his stock, Lyman took a piece of paper and put the articles and amount down, and put the barrels on one side to separate them from the other goods. This list was turned over to the agent, and the goods were handled by Lyman and the porter, who placed them by themselves in the north part of the room. The agent did not go down to get the goods, but to collect the money. He did not know that Lyman was indebted to other parties, and did not know that he was in financial trouble. Lyman said he was short in money and therefore would let appellant have the goods. Appellant preferred the money to the goods, but directed its agent to take the goods if he could not get the money. The agent did not make any inquiry of Lyman as to what he owed.

The above are substantially the facts upon which plaintiff (appellant) brought suit against Lyman to recover certain articles of personal property, consisting of barrels and cases of whisky, wine, etc. G. B. Dennis, the appellee, who had been appointed as trustee in bankruptcy for the estate of E. R. Lyman, on motion, was substituted as defendant in the cause, and answered, denying the allegations of the complaint, denying that appellant was the owner of the goods, or that same had ever been delivered to appellant in satisfaction of the debt due it by Lyman, and set up that on the 16th of May, 1913, Lyman was adjudged a bankrupt under the acts of Congress relating to bankruptcy, and that appellant knew at the time it attempted to take the goods, and at the time of the institution of the suit, that Lyman was a bankrupt, that the attempted transfer and sale of the property in controversy was not four months prior to the filing of the petition in bankruptcy, and was made while Lyman was insolvent, and that appellant was put on notice that Lyman was insolvent, and that the attempted sale and transfer of the property in controversy was a preference in favor of appellant.

The appellant denied that it knew at the time of the alleged sale and transfer of the goods, and at the time the suit was filed, that Lyman was a bankrupt, and denied that Lyman was insolvent at that time; denied that it was put on inquiry that would have led to knowledge of such insolvency.

The appellant adduced evidence tending to prove that while appellant's agent was in Lyman's place of business looking over and selecting the goods, and rolling them around, he was notified that a petition in bankruptcy was being prepared for Mr. Lyman. The petition was prepared and filed on May 16th. There was testimony tending to show that at the time of the alleged sale and transfer of the goods in controversy Lyman was...