Myers v. Whiteheart
| Decision Date | 18 February 1886 |
| Citation | 24 S.C. 196 |
| Parties | MYERS v. WHITEHEART. MASSMAN BROS. & CO. v. SAME. |
| Court | South Carolina Supreme Court |
1. To entitle a party to an attachment upon the ground that defendant had done certain acts with a fraudulent intent, the affidavit must disclose the sources of information, or the facts upon which such a belief is founded.
2. The grounds of attachment in this case being (1) a sale of goods at less than cost, bye the defendant, a failing merchant then negotiating for a cash compromise with his creditors (2) his offer to them to compromise and thereby enable him to avoid an assignment (which was afterwards made); (3) his direction to his clerk to take down all empties and put up full barrels; and (4) a disposition of part of his property to certain preferred creditors (which last was satisfactorily explained)-the attachment was properly discharged.
3. Acts, made by statute a ground of attachment, done by an agent without the knowledge of his principal, will not support the statutory remedy of attachment against the property of the principal.
4. Upon the question whether an attachment was properly issued in the first instance, new facts or new grounds to sustain it cannot be brought before the judge by affidavits in behalf of plaintiffs.
Before FRASER, J., Sumter, February, 1885.
These were two cases of attachment against C. H. Whiteheart, jr., commenced December 31, 1885, one by Herman M. Myers and the other by A. E. Massman Bros. & Co. Defendant moved to discharge the attachment in both cases, and upon these motions, his honor filed the following order on February 14, 1886:
These cases were before me on motions to discharge attachments against the defendant issued by the plaintiffs. The motions were made at chambers at Sumter, and were heard on the notice with the accompanying affidavits and all the papers in the cases-affidavits on the part of plaintiffs in support of their showing for the attachments, and on the part of the defendant in reply. Parties were fully heard by counsel.
If it had been made to appear in the affidavits before me that, as suggested in argument, the defendant was at the commencement of these actions a resident of Florence, in the county of Darlington, the actions could not have been properly brought in this county, and the actions and the attachments would fall together. The defendant certainly knows where his residence is, and he says nothing about it. It is by no means a necessary inference, from the fact that the Sumter store is a " branch store," that the defendant is not a resident of the county. The question as to residence, however, may be made, if necessary, in some other shape in the progress of these cases, if the defendant is advised to do so.
It has also been insisted on in the argument with some earnestness that an attachment against an insolvent debtor is void as preference under our act in reference to assignments by insolvent debtors. It is true that under the late bankrupt acts all attachments issued against an insolvent debtor were ipso facto dissolved by certain proceedings in bankruptcy, voluntary or involuntary, instituted within a limited time after the issuing of the attachments. But Congress has power to pass bankrupt laws and the State has not. The provision above referred to was incorporated in the bankrupt act, and there is no such provision in our acts in reference to assignments by insolvent debtors.
Where there is a general assignment for the benefit of creditors, certain dealings with the property of the debtor within ninety days of the assignment are void if the debtor " procures or suffers" them to be made " with a view to give a preference" to a creditor who has " reasonable cause to believe" the debtor is insolvent . But to hold that an attachment issued by a creditor on his own motion against an unwilling debtor, and otherwise valid, is void under the provisions of our assignment acts would require a stretch of the power of judicial legislation which fortunately is very rare in the United States.
The questions, however, still remain: Were the facts stated in the affidavits on which these attachments were issued sufficient? and are they true?
Taking the whole line of cases in our own books on the subject of attachments, and the recent case of Ivy v. Caston (21 S.C. 583), I take the rule to be this: The affidavit should state facts within the personal knowledge of the witness, and the facts so stated should be sufficient to show that the property has been, or is about to be, dealt with in the manner prohibited, and that this was accompanied with the fraudulent intent, at least prima facie . If it does not make such a case, the attachment should not issue, and if issued, should be discharged on motion. If the affidavit is sufficient on its face, the defendant may still be allowed to show by counter-affidavits that the statements are untrue, for, otherwise, the business of the country would be at the mercy of the reckless and unprincipled; and, perhaps, he may be allowed to introduce such new facts as may show that the inferences drawn from the affidavits are not the true ones. The plaintiff cannot introduce into the case any new facts or evidence of fraud; he must stand on his original case, and if that fails the attachment fails. This seems to be right in itself, as no man should be allowed to attach the property of another and hold it until he can get the evidence on which he can secure a lien.
In the cases before me I see nothing in a proposition to creditors asking them to accept 25 cents on the dollar, or an assignment, which is improper or threatening. Paying off portions of the stock of goods to creditors who are pressing is certainly no evidence of fraud, even if the defendant had said he would make no preferences. The prices at which the segars and tobacco were sold, as mentioned in the affidavits, are not so extravagantly low as to excite in my mind any suspicion of fraud, unless there is some hidden meaning in the direction given by the defendant to his clerk, Dozier, about taking down empty barrels and putting up others. I see no harm in it. It now appears from all the affidavits that the defendant knew nothing of the alleged low sales of segars and tobacco, and that as to at least a part of the giving up of goods to certain creditors, he and his clerk were both imposed on, and were themselves the victims of a fraud.
I am not at liberty to consider any new facts which are stated on behalf of the plaintiffs to show a fraudulent intent, and, therefore, will not undertake to say how far the statements in reference to them are to be believed.
I therefore conclude that the affidavits on which the attachments were issued were insufficient, and that some of the more important facts therein stated are untrue in the sense that the acts done are the acts of the defendant, the clerk or managing agent being alone responsible for them.
It is therefore ordered, that the attachments in the above stated cases be, and hereby are, set aside and discharged, with ten dollars costs in each case, to be paid by the plaintiffs to the defendant. It is ordered, that the notices of motion, and all the affidavits used on the hearing before me, be filed with the clerk, and with the other papers in the cases.
From this order plaintiffs appealed.
Messrs. Moises & Lee , for plaintiffs.
Messrs. Evans & Evans , and Johnson & Johnson , contra.
On December 31, 1884, the plaintiffs in the cases above stated sued out warrants of attachment, under which the stock of goods in a branch store of the defendant at Sumter was seized by the sheriff. The affidavits...
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