Reeves Grocery Co. v. Thompson

• Decision Date: 13 October 1913
• Docket Number: 16182
• Citation: 63 So. 187,105 Miss. 729
• Court: Mississippi Supreme Court
• Parties: REEVES GROCERY CO. v. ANDREW J. THOMPSON, et al

63 So. 187

105 Miss. 729

REEVES GROCERY CO. v. ANDREW J. THOMPSON, et al

No. 16182

Supreme Court of Mississippi

October 13, 1913

APPEAL from the circuit court of Monroe county, HON. JOHN H MITCHELL, Judge.

Suit by Reeves Grocery Company against Andrew J. Thompson in which Harris Bros. were garnished, and Young Thompson and another intervened as claimants. From a judgment for claimants plaintiff appeals.

Andrew J. Thompson was engaged in the mercantile business, carrying a small stock of goods valued at between seven hundred and fifty and twelve hundred and fifty dollars. He also owned real estate worth from two hundred and fifty to four hundred dollars, and notes of Harris Bros. amounting to about one thousand dollars. The storehouse (which he rented) burned but he succeeded in saving the stock of goods, which he subsequently carried out to the home of his sister, Mrs Annie Stone, one of the appellees here. The goods were sold off from time to time, and no account seems to have been kept of the proceeds. Shortly after the fire Thompson deeded his real estate to Mrs. Stone's husband, for an alleged consideration of four hundred dollars, which he says was paid him from time to time. He also executed an assignment of the Harris notes to his sister, Mrs. Stone, with the agreement that she should pay his brother, Young Thompson (the other appellee here), four hundred dollars of the amount collected from Harris. The Harris notes were secured by a deed of trust on real estate, which was of record; but the assignment of same to Mrs. Stone and Young Thompson does not appear of record. It is claimed that this assignment was made to his sister and brother to repay them for money expended on him and for care and attention given him a year or two before, when he was suffering from a severe injury which rendered him practically helpless for more than a year, and that while he was suffering from his injuries and being cared for by his sister and brother he had promised to pay his sister five hundred dollars and repay his brother the money expended on him, should he recover anything from the railroad company, at whose hands the injury was received. Afterwards he did recover from the railroad company, and started the mercantile venture without having paid these obligations.

The Reeves Grocery Company recovered a judgment against Andrew Thompson after the fire and after the alleged assignment of the Harris notes to appellees, and had garnishment issued on Harris Bros., who answered that appellees were claiming the proceeds of the notes. Appellees then came into court and set up their claim by the assignment, and the court below upheld their claim. It was contended by the appellees that the judgment obtained by appellant against Andrew J. Thompson was void because of defective service of process by the constable, which reads: "Executed same by delivering a true copy of this writ at his place of abode." Section 3926 of the Code of 1906 provides that, where a defendant cannot be found in the county, process may be served "by leaving a true copy of the process at his usual place of abode with his wife or some other person above the age of sixteen years, being one of the family, and willing to receive such copy," or "if no person of his family aged sixteen years can be found at his usual place of abode who is willing to receive such copy, then by posting a true copy on a door of the defendant's usual place of abode." Section 3927 sets out the forms of return, in accordance with these provisions.

Reversed and remanded.

Wiley H. Clifton, for appellant.

In support of the court's ruling on the objection to the testimony of Ed Mize and to introduction of the judgment in the case of Reeves Grocery Company v. A. J. Thompson. We submit the objection is made by strangers to this original proceeding and judgment, and therefore a collateral attack on the judgment. That the return on the process at most is only defective, and that the judgment is good on collateral attack, independent of the testimony of Ed Mize. Quarles v. Heirn, 70 Miss. 895, 14 So. 23; Kaufman v. Foster, 89 Miss. 388, 42 So. 667.

But if it were a direct attack on this judgment and the court should think the return defective it would be but an irregularity, and the judgment only voidable. And on this issue the testimony of Ed Mize would be competent to show that the process was served on the defendant, A. J. Thompson, either actually or constructively, and cures the irregularity, if any. Such testimony is competent to show the fact as to the service of the process, and not for purpose of amending the return. Allen v. Dickens, 63 Miss. 62.

But if this judgment was void the auxiliary attachment would require a trial on the merits and the claimant's issue. We notice these technical objections which go to the foundation of the suit, in order to show the court that under no view of the case can the action of the lower court in giving a peremptory instruction for the appellees be sustained.

Under section 2794 and 2785, Code 1906, the transfer or assignment of the record debt must be noted on the margin of the record of the lien or recorded; and in default of such entry the original creditor can satisfy the lien or instrument evidencing it. Such satisfaction by the original creditor will release the lien as to the subsequent creditors, which embraces prior creditors who acquire liens after the assignment, and purchasers for value, etc., unless the assignment be acknowledged and recorded. This means that the assignment can be defeated by the original creditor and assignor and the lien released as to the subsequent creditors and purchaser of the assignor, so long as the transfer is not noted on the record; and if the assignee fails to have the entry made within thirty days from the day of the said assignment, he forfeits to the debtor ten per cent of said indebtedness. Under these statutes such assignments are brought within the operation of the Registry Law; and noncompliance with its provision makes the assignment void as to the creditors of the assignor, because it reserves a benefit to the assignor by permitting him to retain the jus disponendi over the debt and the lien. Where the transaction clearly reserves a material benefit to the assignor it makes the assignment void. Marks v. Bradley, 69 Miss. 1, 10 So. 192; R. C. 1906, p. 2794, 2785, 2796; Klaus v. Moore, 77 Miss. 701, 27 So. 612; Argument on Proposition 1.

Proposition II. This assignment was fraudulent and void in fact as well as in law. Andy Thompson in June, 1911, couldn't pay his debts, was commercially insolvent, and for an inadequate consideration, transferred all his property to his sister and brother-in-law in consideration of an antecedent debt, just before judgment was obtained against him. The law imputes a fraudulent intent, if the thing done is unlawful; or naturally results in defrauding creditors. Ames v. Dorrah, 76 Miss. 187, 23 So. 768; Stanton v. Green, 34 Miss. 576; Marks v. Bradley, 69 Miss. 1, 10 So. 922.

Proposition III. Where the conveyance or the assignment is on a fictitious consideration in whole or in part, the transaction is fraudulent and void.

Proposition IV. Young Thompson is only a preferred creditor under the assignment and his claim to the property can only be asserted under the assignment. The trade he made afterwards with Mrs. A. E. Stone adds nothing to the strength of his title; he must deraign title through her as assignee.

But we are discussing this case as though it were being heard by the court on a motion for a new trial; when the nisi prius judge withdrew the question of fraud from the jury and gave a peremptory charge. A peremptory instruction is proper only where, admitting all the facts in evidence and every inference...