Lemen v. Leffringhouse

• Citation: 274 P. 215,127 Kan. 501
• Decision Date: 09 February 1929
• Docket Number: 28,267
• Parties: A. M. LEMEN, Appellant, v. L. W. LEFFRINGHOUSE et al., Defendants, J. V. PRATT and E. E. GOLDEN, Garnishees, Appellees
• Court: United States State Supreme Court of Kansas

274 P. 215

127 Kan. 501

A. M. LEMEN, Appellant, v. L. W. LEFFRINGHOUSE et al., Defendants, J. V. PRATT and E. E. GOLDEN, Garnishees, Appellees

No. 28,267

Supreme Court of Kansas

February 9, 1929

Decided January, 1929.

Appeal from Thomas district court; CHARLES I. SPARKS, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

FRAUDULENT CONVEYANCES--Bulk-sales Act--Laches of Creditor. A stock of hardware and fixtures was sold without compliance with the bulk-sales law (R. S. 58-101 et seq.). Held, that the fact that a creditor of the seller learned of the sale as much as seven days before payment was made for the stock and fixtures purchased, and took no action within that time, did not preclude him from maintaining an appropriate action against the purchasers to subject the stock to the payment of his claim.

Robert W. Hemphill, of Norton, for the appellant.

E. H Benson, of Colby, for the appellees.

OPINION

HARVEY, J.:

This case involves an application of the bulk-sales law (R. S. 58-101). The proceeding is an action by a creditor of the seller against him, and garnishment of the purchasers. The garnishees answered, denying liability. Plaintiff joined issues on this answer. These issues were tried by the court, with the aid of the jury, which answered special questions. Judgment was for defendants. Plaintiff has appealed.

The pertinent facts disclosed by the record and found by the jury may be stated as follows: L. W. Leffringhouse was conducting a retail hardware store at Colby. He had many creditors, including the plaintiff. About November 14, 1925, he sold the stock of hardware, in bulk, and all the fixtures, to J. V. Pratt and F. E. Golden. On that date the purchaser had August Lauterbach, president of the Farmers and Merchants State Bank of Colby, write to many, not all, of the creditors of Leffringhouse, requesting the creditor to mail a statement to the bank "covering L. W. Leffringhouse's entire indebtedness to you. This concern is changing hands." The stock of goods was invoiced November 15 and 16. On the evening of November 16 the plaintiff, who was a traveling salesman, was in Colby and called at the store and there met Golden, whom he had known for several years, and Pratt, to whom he was then introduced. The three visited a few minutes. Plaintiff asked if they had bought Leffringhouse out; they replied that they had. Plaintiff wished them success and expressed the hope that they could give him some of their business. That was about the extent of the conversation concerning the sale of the business. Plaintiff's judgment was that the stock of hardware and fixtures was of the reasonable value of $ 7,000. At that time Leffringhouse and his wife were indebted to plaintiff on a note given in 1919 for $ 750, for the purchase price of an automobile, on which payments had been made irregularly from time to time. Plaintiff did not mention this indebtedness to Pratt or Golden during the conversation just mentioned, nor did he take any steps at that time, or soon thereafter, to subject the stock of goods and fixtures to the payment of this debt. A year or more previous to the sale of this stock, plaintiff, in a conversation with Golden, told him of Leffringhouse's indebtedness to plaintiff; but at the time of the conversation of November 16, 1925, Golden did not know that any of that indebtedness still existed. The jury made a specific finding that Golden did not on that date know of any indebtedness of Leffringhouse to plaintiff. On November 23, 1925, Leffringhouse made an affidavit before August Lauterbach in which he says "that he owes to wholesale houses and taxes this date $ 3,690.83, as per invoices and statements hereto attached." It does not appear that any "invoices and statements" were attached to this affidavit; perhaps that statement in the affidavit refers to invoices and statements which had been received by the president of the bank in answer to letters he had written November 14. There was attached to, or accompanied, this affidavit a list of names and addresses of persons and firms to whom Leffringhouse was indebted. It was not a complete list of the creditors of Leffringhouse and did not purport to be. And it will be noted that the affidavit did not purport to refer to all of Leffringhouse's creditors. Perhaps it is fair to say that the sum stated in the affidavit was less than half of Leffringhouse's indebtedness and the list omitted many of his creditors. Plaintiff's name was not on the list.

On November 23 the buyers, Pratt and Golden, executed their check to Leffringhouse for $ 5,467.50 in full payment of the stock of goods and fixtures, as per their contract of purchase and invoice. This check was paid November 24, and out of this money many of the creditors...