Pincus v. S.H. Meinhard & Bro.
| Decision Date | 25 January 1913 |
| Citation | 77 S.E. 82,139 Ga. 365 |
| Parties | PINCUS v. S. H. MEINHARD & BRO. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
A letter was written by a retail to a wholesale merchant, in which he ordered a specified bill of goods. Before accepting the order and shipping the goods, the latter wrote the former, requesting a statement of his financial condition which request was complied with. The statement contained among other things, a waiver of homestead and exemptions. Upon receipt of this statement the wholesale merchant, partly on faith of the waiver, accepted the order and charged the bill of goods on his books to the purchaser, and commenced to manufacture and buy the goods, and within a few weeks thereafter delivered them to the purchaser. Held that the waiver of homestead was made contemporaneously with the offer to buy and its acceptance, and was a valid contract of waiver.
(a) Whether the defendant signed the waiver, or authorized any one else to do so for him, is a question of fact for the jury on the trial of the case.
The title to an exemption set apart to a bankrupt by a court of bankruptcy is in the bankrupt, and can be alienated and sold by him.
(a) In such a case a vendee who purchases from the bankrupt before the goods are set apart under the state law by the ordinary gets a good title thereto, unless the sale was made to delay or defraud the creditors of the vendor, who had the right to subject the exemption, and this intention was known to the purchasers.
In an equitable petition to impound a certain stock of goods set apart to a bankrupt, pending a final trial of the case, on the ground that the bankrupt had fraudulently sold the goods to hinder, delay, and defraud his creditors, and also to impound the note given for the goods, it was not error to impound the goods until the final disposition of the case.
(a) In such a case it was reversible error to impound the note given for the goods, where it appeared that the payee of the note was not a party to the suit, and did not in any way waive being a party, and there was no evidence to show that the defendant was in possession of the note.
Error from Superior Court, Grady County; Frank Park, Judge.
Action by S. H. Meinhard & Bro. against Max Pincus and others. Judgment for plaintiffs, and defendant Pincus brings error. Reversed.
A petition was filed by S. H. Meinhard & Bro. against Max Pincus and others to subject a certain exemption of personal property, consisting of a stock of goods, and set aside to Max Pincus, bankrupt, by the bankruptcy court, to the debt due by Pincus to Meinhard & Bro.; it being alleged in the petition that the exemption so set apart was subject to the debt on account of a homestead waiver by Pincus as against the payment of the debt. The record shows substantially the following facts: About July 1, 1911, Pincus, who was a retail merchant of Doerun, ordered a certain bill of merchandise by letter from Meinhard & Bro., of Savannah, to be shipped to the former by the latter during the months of August and September thereafter. Upon receipt of this order Meinhard & Bro. requested a statement of Pincus as to his financial condition, which the latter gave upon a blank sent him by the former, and which was filled out, signed by the latter, and returned to the former. In this statement the following language is found as to homestead waiver: "As a part of the within representation to H. S. Meinhard & Bro., of Savannah, Ga., and as a further basis for credit, and as a part of the terms of any sale made by them to us, or me, so long as this agreement shall not have been expressly revoked by us or me, such revocation to be evidenced by a writing delivered to them, we or I, as against any indebtedness arising out of the sale and delivery to us, or me, of any goods, wares, and merchandise by said H. S.
Meinhard & Bro., based on their faith in the truth of the within statement and on their reliance upon this waiver, hereby severally waive and renounce for ourselves and families, or myself and family, any and all homestead or exemptions we or I may have under or by virtue of the Constitution and laws of the state of Georgia, or any other state, or the United States. This waiver of homestead is hereby declared to be continuous in its character, and shall take effect and be construed to become operative contemporaneously with the creation and contract of indebtedness, whether such indebtedness be evidenced by written account or note. Dated July 6, 1911." Immediately upon receipt of the statement from defendant to plaintiffs, they wrote to him on July 11 1911: To this letter defendant replied on July 12th: "I am in receipt of your letter of the 11th inst., and I also wish to state to you that Mr. Parkman's name is only as a witness." On the 14th day of July, 1911, plaintiffs approved the order and entered the same upon their books for shipment at the time stated, and charged the goods to the account of defendant. Immediately thereafter plaintiffs began to purchase and manufacture the goods and merchandise which defendant had ordered to be shipped to him during the months of August and September thereafter. On August 18th, plaintiffs delivered to defendant the goods ordered on July 1, 1911.
On January 2, 1912, the defendant Pincus was adjudicated a bankrupt. He claimed an exemption of certain personalty, consisting of a stock of merchandise, which was set apart by the trustee in bankruptcy; and this exemption was confirmed by the referee in bankruptcy on February 14, 1912, and the trustee was ordered to deliver the property so set aside to the bankrupt, which was done. On the same day the bankrupt, as he claims, sold to his brother, Morris Pincus, the stock of goods so set apart in payment of a debt alleged to be due by Max to Morris Pincus, and delivered the exempted property to the latter on the 16th day of February, 1912. The plaintiffs did not prove their claim in bankruptcy. Max Pincus is totally insolvent. On the same day Morris Pincus sold and delivered the same to R. H. Freeman, R. D. Cole, and J. Idleson for the sum of $600, and they made and delivered to Max Pincus a nonnegotiable note, payable in six days thereafter. A condition is incorporated in the body of the note to the effect that it shall not be paid if the title to the exempt property shall fail. At the time of the sale of the property to the above-named purchasers, they had actual knowledge that the property had been set aside and allowed as an exemption to the defendant by the court of bankruptcy. No order or authority of the superior court was granted to Max Pincus to sell the exempted property. Demand on Max Pincus and his attorney for the note, and refusal on their part to deliver it, was alleged. The prayer of the petition was that Freeman, Cole, and Idleson be enjoined and restrained from selling or otherwise disposing of the exempt property, and that the receiver appointed by the court be directed to take the property from the possession of Freeman et al., and hold the same subject to the order of the court, and, if they have sold any of the property, that they be required to file an account thereof and pay the proceeds to the receiver.
On February 19, 1912, the judge passed a temporary order, restraining and enjoining Freeman, Cole, and Idleson, among other things, from selling or otherwise disposing of the exempted property, and requiring them to deliver said property to the receiver, and that the latter hold the same subject to the further order of the court. It was further ordered that the defendant or his attorney show cause before the judge, on March 5, 1912, why they should not be attached for contempt on account of their alleged failure and refusal to deliver to W. M. Smith, the receiver, the note given to the defendant by Freeman, Cole, and Idleson; also that Max Pincus and his attorney deliver the said promissory note to the receiver, who was to hold it subject to the further order of the court; that Pincus, Freeman, Cole, and Idleson show cause, on March 5, 1912, "why said receiver should not retain permanent possession of said exempt property, and why the petitioners should not have a judgment in rem against said property."
In his answer the defendant specifically denied that he ever signed or executed any instrument whatever to the plaintiffs in which he waived his right to homestead. He averred that he could not read and write, nor keep books, and could read printing very little; that he could not read the report made to the plaintiffs as to his financial condition, and if there was a homestead waiver clause therein, either in print or writing, it was not read to him; and that at no time before or since the signing had the plaintiffs ever offered to put the defendant on notice of such clause. He denied that he ever signed any writing or printed matter containing a homestead waiver to plaintiffs, to his knowledge, and that plaintiffs never called upon defendant to do such a thing. If such had been done, it was a fraud, because of his ignorance of the English language, which was known to plaintiffs. He never would have signed such an instrument if it had been called to his attention. He filed his voluntary petition in bankruptcy, and was adjudged a bankrupt on January 2, 1912. The trustee did set apart...
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