Stii.Lweli v. Savannah Grocery Co

• Decision Date: 23 November 1891
• Citation: 88 Ga. 100,13 S.E. 963
• Parties: Stii.lweli, et al. v. Savannah Grocery Co. et al.
• Court: Georgia Supreme Court

13 S.E. 963

88 Ga. 100

Stii.lweli, et al.

v.Savannah Grocery Co. et al.

Supreme Court of Georgia.

Nov. 23, 1891.

Fraudulent Conveyances—Appointment of Receiver—Interlocutory Injunction.

1. In so far as the petition in this case rests on the insolvent traders' act or on the assignment act, it is unsupported by the facts in evidence. Granting that the evidence makes a prima facie case of fraudulent conveyance by an insolvent firm of all of its property to a single creditor, to the injury of the other creditors, the purchasing creditor being solvent and able to respond, and the complaining creditors being without judgments or other liens, and having no claim to the property by reason of fraud in the creation of their demands or otherwise, no sufficient cause for an interlocutory injunction and receiver as to this property appears. It was certainly error to appoint a receiver unconditionally, without offering the purchaser the alternative of giving bond and security in lieu of surrendering the property to a receiver.

2. The case of De Lacy v. Hurst, 83 Ga. 223, 9 S. E. Rep. 1052, rules nothing as to interlocutory injunctions or receivers. The uniformity procedure act of 1887 does not make extraordinary remedies applicable or available where they were not so before.

(Syllabus by the Court.)

Error from superior court, Montgomery county; D.M. Robekts, Judge. Reversed.

Creditors' bill by Savannah Grocery Company and others against Stillwell, Millen & Co. Order granting an injunction and appointing a receiver. Defendants bring error.

The following is the official report:

The Savannah Grocery Company et al., creditors of Peacock, Peterson & Co., filed their petition in the nature of a general creditors' bill, alleging they are creditors of the firm named, whicli is composed of G. W Peacock and of W. M. and C. R. Peterson. Peacock, Peterson & Co. are merchants of Montgomery county, and are also engaged in the saw-mill business, and as such traders and lumber manufacturers bought from petitioners, from time to time, goods to be used by them in the course of their business, in their store as well as in carrying on their saw-mill; and are indebted as set out in an exhibit. Petitioners have demanded payment of such of their debts as have matured, which has been refused. Peacock, Peterson & Co. own a large amount of real and personal property located principally in Montgomery county, and have enjoyed good credit with petitioners and others, based upon the knowledge of creditors of the large amount of assets of the firm, as well as upon the good standing of its members. They did business in Savannah with Still-well, Millen & Co. as factors, who claim to be creditors of Peacock, Peterson & Co. for some $10,000, and they have upheld the credit of Peacock, Peterson & Co. in Savannah to petitioners, whenever inquiry was made of them, asserting that Peacock, Peterson & Co. were good and solvent, and that, while they held a mortgage to secure their debt, the property upon which it was given was worth four times their debt; and in this way aided greatly Peacock, Peterson & Co. in obtaining credit from petitioners. On January 16, 1891, Stillwell, Millen & Co. obtained a mortgage from Peacock, Peterson & Co. to secure a debt of $7,000 principal, with interest, duein 90 days; on March 6, 1891, another mortgage, further securing the $7,000; and upon March 16, 1891, another, securing payment of a note of $5,000, payable four months after date, and dated March 6, 1891; all of which mortgages are of record. These mortgages covered all the partnership property, embracing property described in the petition, and were given subject to a mortgage for $6,000, dated November 8, 1890, to the Hawkinsville Bank & Trust Company, upon which last-named debt only $2,000prineipal remaineddue. On May 1, 1891. the three members of the firm of Peacock, Peterson & Co., who were in Savannah at the special instanceof Stillwell, Millen & Co., made a conveyance to the latter in consideration of thirteen thousand one or two hundred dollars, of which $400 was to be paid W. M. and $200 C. R. Peterson, conveying al! the partnership property and assets of Peacock, Peterson & Co. in payment of the balance due Stillwell, Millen & Co., of between $9,000 and $10,000, and the balance of the debt due the bank and trust company, of about $2,000, and about $1,800 alleged to be due for labor claims at the mills of Peacock, Peterson & Co.; Stillwell, Millen & Co. agreeing then and there with Peacock, Peterson & Co. that they would pay all the claims against Peacock, Peterson & Co. which were liens or were for supplies or goods furnished them in their saw-mill and mercantile business, and would assist thtm in arranging their other indebtedness; and also agreeing that Peacock, Peterson & Co. should have the privilege of paying the money named in the conveyance to Stibwell, Millen & Co. within a reasonable time, whereupon they would convey back the property, if that course were desired by Peacock, Peterson & Co.; Still-well, Millen & Co. expressly stating that they did not desire the property, but only payment of their debt, and asserting that it would be in every way better for Peacock, Peterson & Co. to put the title in them of all the assets than to have a foreclosure of the mortgage, as the expense of the foreclosure would be very great, and would amount to a breaking up in business. At the time of and immediately after the signing of said conveyance Still-well advised Peacock to go home and sell out all his private property as soon as possible. On May 2d, W. M. Peterson went to Stillwell, Millen & Co., and requested, in conformity with the promise made by them, that they pay the debt due by Peacock, Peterson & Co. to a lumber company, which request Stillwell refused, alleging he would pay nothing, and claiming titleand ownership to all the property conveyed in the deed of May 1st. Peterson then, finding that they would not conform to the agreement made with them, informed some of the Savannah creditors of the state of affairs, among them the Savannah Grocery Company, whereupon Deitsch, vice-president of that company, on Saturday, May 2d, went to the office of Stillwell, Millen & Co., accompanied by both the Petersons, and in the name of the Savannah Grocery Company, a corporation of large means, expressly stating that the offer was on behalf of Peacock, Peterson & Co. and their creditors at large, tendered Stillwell, Millen & Co. the full amount of the consideration of said debt, to be paid then and there; whereupon Stillwell refused to receive the money for his firm, alleging that the property belonged to it, and they would not give it up. Then W. M. Peterson increased the offer, offering to pay $1,000 more than the amount of the indebtedness, which Stillwell, Millen & Co. refused to accept, claiming the property was theirs, and they would not dispose of it. The deed referred to was a quitclaim conveyance, with no inventory attached to it, and no schedule of assets made out and sworn to by Peacock, Peterson & Co., so that it was not executed according to law, if intended as an assignment of all the property of Peacock, Peterson & Co.; and it was made to hinder and delay their creditors, such intention being known to Stillwell, Millen & Co. The property mentioned in it was worth largely more than theconsideration thereof, and at the lowest valuation worth double the same. The sale was not bona title in payment of a debt, but there was a gross undervaluation of the property, and an element of trust therein, by reason of the agreement that Stillwell, Millen & Co. would pay out of the proceeds of the property certain other creditors of Peacock, Peterson & Co., and assist Peacock, Peterson & Co. in making a compromise of their other debts; the understanding between the parties being that, while the title was put in Stillwell, Millen & Co., the transaction was also to benefit Peacock, Peterson & Co., so as to give them a surplus out of the property, either by compromise or by the transfer of Stillwell, Millen & Co. of all the property upon the payment of the indebtedness named as consideration by some outside party, the result being a secret trust, though the deed, upon its face, showed a transfer for value. Upon the ascertainment by Peacock, Peterson & Co. that Stillwell, Millen & Co. would not carry out the scheme agreed on, Peacock, Peterson & Co. have refused to give them possession of the property, have remained in possession of it, and are now in possession. Peacock, Peterson & Co. are insolvent. Their property is of such peculiar character—machinery, saw-mills, and other adjuncts of a saw-mill business—that, while there might be assets more than enough to pay off all debts, (and the total indebtedness will amount to nearly, if not over, $30,-000,) yet, by shutting down the business, which has now occurred, there will be a large depreciation in values, and, much of the property being not yet fully paid for, the sums paid upon the same will, in all likelihood, be lost, and may be accounted as no assets by reason of the stoppage of the business, (an example being given.) During the last days of April, at the suggestion of Stillwell, Millen & Co., Peacock, Peterson & Co. sold out their merchandise stock for $2,000 to a Dr. Terrell for part cash, part being still due; so that, at the special instance and request of Stillwell, Millen & Co. during the week before the presentation of this petition, Peacock, Peterson & Co. disposed of to them and Terrell all the assets of Peacock, Peterson & Co. which were charged with the payments of their debts; the whole scheme tending, with the full knowledge of Stillwell, Millen & Co.. to hinder, delay, and defraud the creditors of Peacock, Peterson & Co. Peacock, Peterson & Co. were threatened by Stillwell, Millen & Co. with the foreclosure of the mortgage immediately, unless they signed the deed. They were loath to sign it, and stated to ...