Steiner v. Lowery

• Decision Date: 06 June 1893
• Citation: 13 So. 320,98 Ala. 208
• Parties: STEINER ET AL. v. LOWERY ET AL.
• Court: Alabama Supreme Court

13 So. 320

98 Ala. 208

STEINER ET AL. v. LOWERY ET AL.

Supreme Court of Alabama

June 6, 1893

Appeal from circuit court, Jefferson county; James B. Head, Judge.

Attachment by J. S. Lowery & Co. against L. Klein, which was levied on a stock of goods of defendant. Steiner Bros., a banking house interposed a claim against the goods, as having purchased them from defendant. On trial before the court, jury having been waived, judgment was rendered for plaintiffs, and the goods ordered sold to pay their judgment against Klein, and Steiner Bros. appeal. Affirmed.

White &amp Houze and Cabaniss & Weakley, for appellants.

Mountjoy & Tomlinson, for appellees.

HARALSON J.

This is a statutory claim suit to try the right of property in a stock of goods. The plaintiffs in the court below, J. S Lowery & Co., the appellees, sued out an attachment in the circuit court of Jefferson county on the 2d of December, 1890, against L. Klein, and, placing the same in the hands of the sheriff, caused it to be levied on a part of a stock of goods in a storehouse, No. 15 North Twentieth street, in Birmingham, Ala., in which said L. Klein claimed to have carried on a clothing and furnishing store. Steiner Bros., a banking house in said city, the appellants, interposed a claim to the goods levied on, claiming to have purchased them from said L. Klein on the 28th of November, 1890. The claim suit, on issue properly made up under the direction of the court, was tried by and before the circuit judge of that judicial circuit without the intervention of a jury, the same having been waived by the parties. The issue was found in favor of the plaintiffs, against the claimants, and the property condemned to the payment of their judgment recovered against said L. Klein. The plaintiffs proved their debt against the said Klein,-about $7,000,-and that it was contracted and existed before the 28th November, 1890, the date of the alleged sale to claimants from said Klein.

In the trial of an issue of this character, as has been repeatedly held, the inquiry should be directed (1) to the bona fides of the debt; (2) the sufficiency of the consideration; and (3) whether there was a reservation of benefit to the debtor. Dawson v. Flash, (Ala.) 12 South. Rep. 68; Pollock v. Meyer, (Ala.) 11 South. Rep. 385; Hodges v. Coleman, 76 Ala. 104. Our investigations will be made with reference to these decisive tests of the validity of this transaction. The facts of the case, as set out in the transcript, are of voluminous recital, taken down stenographically-questions and answers-just as they were propounded and answered by the witnesses, and we can do no more than refer to such of the salient points as lead us to the conclusion at which we have arrived.

The plaintiffs were merchants, doing business in the city of New York, and had been extending a liberal and generous credit to the concern trading in Birmingham under the name of L. Klein, whether it was composed of one or more persons. A. I. Klein was a brother of L. Klein, and came to this country, many years ago, from Austria-Hungary. He did business as a merchant in Greensborough, Ala., prior to the year 1879, and in that year failed in business. He knew the claimants there as early as 1875, and the proofs show that their acquaintance has been intimate and friendly, though said A. I. Klein testifies to having met them a few times, only, since. B. Steiner testified that he want to Klein's frequently; traded with him; was on good social terms with him; that their families visited; that he knew him in South Alabama, where he failed; and that he knew as much about him as a man knows about one of his customers. It was also shown that said A. I. Klein consulted with, and said Steiner advised him, about the composition and settlements of those old debts which were hanging over him. One cannot resist the conclusion, on reading the evidence, that the parties were intimate, and that Klein's financial embarrassments and attitude as a trader were well known to the Steiners. They were such as that said A. I. Klein could not undertake, in advance of a settlement of his debts, to do business under his own name, and it is certain as circumstances can well make it appear that he was doing business on his own account under the name of his brother, L. Klein, as will presently very satisfactorily appear. Within a short time after the failure of A. I. Klein, in Greensborough, his brother, L. Klein, the defendant in attachment, came to this country from Austria-Hungary, bringing with him, as he swears, $2,000, which he procured to be changed into American money in Bremen, and after his arrival in Birmingham kept it in his trunk, and did not deposit it in any bank. We do not wonder that he did not risk a bank with his money on his arrival, since might not have known it would be safe; but if he was cautious to take care of such possessions, as people generally are, it was contrary to the suggestions of safety for him to have transported a sum of money so large and valuable to him across the ocean, and to Birmingham, on his person or in his trunk, when it could have been done with no risk, and at little expense, by investing it in New York exchange.

It was convenient, however, and perhaps necessary, in the trial of this cause, for him to appear to have had $1,500 in Birmingham, without any earmarks at all, when he and his brother claim that he started a clothing and gents' furnishing enterprise in that place, in July, 1887. In March of that year the said L. Klein and one Eisenberg bought out a clothing establishment from other parties, in which venture he invested $1,500. How much Eisenberg put in is not stated, but, it is to be presumed, not a large amount. These parties immediately engaged the services of said A. I. Klein as manager and salesman, and in any other capacity in which his services might be required, at a salary of $2,500 a year, payable monthly, and this notwithstanding the fact they had a capital of only $3,000, (if each partner contributed an equal amount,) with two partners, who, for aught that appears, were capable of attending to the whole business, which did not exceed $20,000 or $25,000 of sales a year. This copartnership arrangement lasted, as might have been expected, only to the 15th of October following, when L. Klein bought Eisenberg out, and the following very suggestive obligation was entered into by L. Klein with said A. I. Klein: "I hereby obligate myself and agree to pay Alex. I. Klein, for services to be rendered as herein stipulated, the sum of $2,500 per year, granting him the privilege to draw the same per month, if he so desires, and further agree and obligate myself to pay said salary to said Alex. Klein every year, for as long a term as it may prove mutually agreeable and satisfactory, and that I will, under any circumstances, protect him from loss of any balance due him at any time hereafter, until said Alex. I. Klein may desire to quit his position with me. Signed and sealed this 15th October, 1887. L. Klein." In addition to this. L. Klein gave A. I. Klein a general power of attorney to take charge of, manage, and control said business; and he did so in such manner as to impress those who dealt with him, and to create the belief generally, that he was the owner of the establishment. He bought the goods; sold them, or had them sold under his direction; took out insurances; rented the store, and managed it as owner. The sign put up was "Klein" and "L. Klein." In his correspondence with J. W. England, the representative of plaintiffs, he speaks of "Klein" as "this firm," the "firm of K.," "the firm of L. K.," and uses in connection with it the pronouns "we" and "us;" and in one of his letters he explains the sign "K.," and was not at all satisfied with it, and speaks of the time when "I can use my initials." In referring to his brother in that immediate connection, he says: "I can never afford to trust him on any business questions, as I do not find him competent; and that's the way matters stand, and may remain so."

In September, 1890, L. Klein went to New York to effect with the plaintiffs an extension of their claim against "Klein." He says he saw Mr. Dixon, of the firm of plaintiffs, and asked him for an extension, and he was unwilling to give it. On returning to his hotel he saw Mr Sig. Steiner, one of the claimants, and asked him to go to Lowery & Co., and speak a good word for him, which he did, and afterwards he arranged with Mr. Dixon. That while there A. I. Klein sent him a statement to be used with plaintiffs as a basis of credit, showing total assets of $32,937.96, with total liabilities of $23,014.66, leaving balance of $9,923.96. In this statement he represented the stock on hand as $26,782.45; fixtures, $750; safe, $143; cash and papers, $2,500; good accounts, $3,680; merchandise bought since June 1, 1890, $5,313.65; and cash receipts since that date, $8,801.39. This statement was a remarkably good one for a business that had been in existence for about three years, starting on so small a capital. Having, through such a statement, and by the kind offices of one of the claimants, induced the plaintiffs...