Redfield v. Hewes

• Decision Date: 18 November 1889
• Court: Mississippi Supreme Court
• Parties: CHARLES G. REDFIELD ET AL. v. S. D. HEWES ET AL

6 So. 776

67 Miss. 479

CHARLES G. REDFIELD ET AL. v. S. D. HEWES ET AL

Supreme Court of Mississippi

November 18, 1889

October 1889

FROM the chancery court of the first district of Hinds county HON. WARREN COWAN, Chancellor.

One Mallett was in the drug business at Edwards, Miss., and was involved in debt. On the 15th day of April, 1885, he executed a bill of sale of his stock of drugs, etc., to the appellants, Redfield & Co., merchants of that place, for the expressed consideration of $1106.95, cash, and the goods were delivered to the purchasers. Mallett owed Mrs. A. M. Odeneal $600, two years' rent of the store-house then occupied by him, and he owed her husband, J. H. Odeneal, a member of the firm of Redfield & Co., $106.95, and those amounts aggregating $706.95, were assumed and paid by Redfield & Co. and they executed their note, payable to Mallett, December 1 1885, for $400. These three amounts made up the sum of $1106.95, expressed in the bill of sale. The stock consisted in great part of old goods, and the remnants of several different stocks, the goods having changed hands several times. On their purchase, Redfield & Co. went to work to put the stock into good condition, replenished it with fresh goods, and worked off through their general store on credit many of the unsalable articles. They had a druggist employed, and Redfield, of the firm of Redfield & Co., gave part of his time and attention to the business. They offered the business for sale soon after they bought, but not finding a purchaser they kept the stock about nine months, buying and selling in the usual course, and paying rent, insurance, clerk's hire, etc.--all out of the business.

The note for $400, when executed, was left by Mallett in the hands of one Stam, the bookkeeper of Redfield & Co., with the understanding that it should be credited with amounts for which Mallett was to give his creditors drafts on Redfield & Co., and finally, when paid, to be given up to them. It was stated by Mallett that this $400 would pay all his other creditors fifty cents on the dollar; and it was understood that he should endeavor to settle with them on that basis. He gave various creditors drafts on Redfield & Co., which were paid and credited on the note. After having given these drafts, and after deducting $61.86, the amount of his account with Redfield & Co., on January 4, 1886, there was a balance due on this note of $168.11, when he gave to his brother-in-law, A. J. Vaughn, who was a creditor, a draft on Redfield & Co. for this amount, which was paid, and the note was taken up.

On January 23, 1886, Redfield & Co. sold out the stock of drugs for $2201.41, part cash, the credit payment being secured.

On September 6, 1887, the bill in this case was filed by other creditors of Mallett, including Vaughn, to set aside the sale made April 15, 1885. Mallett and Redfield & Co. were made defendants. It alleged that complainants were creditors of Mallett to the amount of $1000, besides interest; that said sale was not made in good faith, but upon an understanding that Red field & Co. were to take the goods, and, after paying from the proceeds of the sale thereof a debt of $706.95 to Odeneal, to return possession of the same to the said Mallett; that this was the only consideration of the transfer; that the goods were worth $3000, and that the object was to place the property out of the reach of Mallett's creditors, and to force complainants and other creditors to compromise their debts.

The bill made no allusion to the note for $400, given to Mallett by Redfield & Co., and paid to creditors on the drafts of Mallett, as above stated. It was sworn to on information and belief by one of the complainants, who had no personal knowledge of the facts charged. Pro confesso was taken as to Mallett. Defendants, Red field & Co., composed of C. G. Redfield and J. H. Odeneal, answered the bill under oath, positively and specifically denying all charges of fraud. They denied that the sale was made on any conditional understanding or agreement; denied that it was ever understood or agreed that Mallett should have the right to re-purchase or take back the goods, and averred that the sale was absolute, and made in good faith, for the consideration of $1106.95, as above set forth; denied any purpose to coerce or compel creditors of Mallett to compromise their claims, and averred that if Mallett had any intention to defraud his creditors, they knew nothing of it. These defendants also denied that the goods were worth $3000, or anything like that sum, and averred that $1106.95 was a liberal price for the stock of drugs, which was old, with many unsalable articles in it, and averted that they only bought the goods to enable Mallett to pay the debts to Odeneal and wife, which he could not otherwise do. They also set up that they assumed and paid these debts, and paid the note for $400, and finally, in due course, sold the stock of goods, without any knowledge or notice that other creditors could or would complain--the business having been finally closed out and settled nearly two years before the bill was filed.

Mallett, as a witness for complainants, testified substantially in support of the allegations of the bill. He stated that he had an agreement with the defendant, J. H. Odeneal, who lived in Jackson, about twenty-five miles from Edwards, to the effect that he, Mallett, was to have the right to take the goods back as soon as Redfield & Co. were reimbursed the amount advanced by them; that other creditors were to be settled with at fifty cents on the dollar, and that an absolute bill of sale was made for the purpose of keeping off the other creditors; that he supposed Redfield & Co. would deal fairly with him, but that, after getting the goods and selling them at a profit, they had repudiated the agreement, offering him a small sum in compromise; that the stock consisted of fresh goods in the main, though it contained the remnants of several stocks; that the stock invoiced about $3000, cost and carriage, and was worth about $2500. He stated that he offered to make an assignment to secure the Odeneal indebtedness, but that Odeneal insisted on a sale when the above arrangement was effected. He also testified that he first spoke to counsel for complainants about the suit, and read over and approved the bill before it was filed; that he meant no actual fraud, but supposed that his assets would pay all creditors; that the debts of complainants, amounting with interest to about $1400, were just and unpaid. There was other testimony for complainants tending to show that the value of the goods was considerably in excess of $1106.95. Mallett was not a druggist.

Defendant Odeneal, as a witness denied making the conditional agreement testified to by Mallett, and stated that the sale was positive and absolute, as expressed in the written bill of sale; that Mallett proposed to make such conditional agreement, but that defendant consulted counsel, and, ascertaining that it would be illegal, positively refused to accede to it, and so wrote his partner and codefendant, Redfield, who was at Edwards, asking that the letter be preserved. But Mallett did not discuss the terms of the sale with Redfield, and this letter was not shown to him. Defendant Odeneal further testified that Mallett was anxious to make an assignment, preferring his debt and that due Mrs. Odeneal for rent, but that he preferred a sale after obtaining legal advice; that he did not want the goods, and was anxious to get out of business at Edwards, and only consented to the purchase to enable Mallett to pay the debt. Both defendants as witnesses denied all fraud; denied that the sale was upon any condition whatever, but stated that it was absolute, open and fair for the consideration stated in the bill of sale, and that neither of them knew of any intention to defraud on the part of Mallett, if he had such intention. The testimony for the defendant further tended to show that $1106.95 was a fair price for the stock of drugs, and that the defendant, Redfield, at first refused to make the trade and pay over $1000 for the same. It was further shown that the invoice was taken at the original cost price of the goods as marked, many of the articles having been bought several years before. Also that Mallett being embarrassed had bought at high prices, while defendants, having better credit, in replenishing the stock had bought on better terms; that the stock was put in good condition; that Redfield, who was an experienced merchant, gave his personal attention to the business, when not engaged in his general store, for the nine months they kept the stock, and that his services were worth $60 a month; that an advantageous sale was made of the stock for $2201.41, part on credit, to one Harris, who still owed for the goods, and whose bargain had not been profitable. Mallet was the only...