Stock Grower's State Bank v. Millard

• Decision Date: 30 December 1919
• Docket Number: 968
• Parties: STOCK GROWER'S STATE BANK v. MILLARD
• Court: Wyoming Supreme Court

186 P. 121

26 Wyo. 394

STOCK GROWER'S STATE BANK v. MILLARD

No. 968

Supreme Court of Wyoming

December 30, 1919

APPEAL from District Court, Washakie County; HON. P. W. METZ, Judge.

Action by the Stock Grower's State Bank against L. A. Millard from an order discharging attachment and plaintiff appeals. The material facts are stated in the opinion.

Affirmed.

C. H Harkins and H. C. Brome, for appellant.

It was clearly shown that defendant intended to leave town; it was also shown by the admissions of defendant himself that he had not complied with the requirements of the bulk sales law by furnishing a complete list of his creditors; it was also shown by his own admissions that he was insolvent; the disappearance of several thousand dollars from defendant's assets without reason or explanation, the transfer of his book accounts to his wife, and his refusal to give any information touching the amount due or collected compels the conclusion that he had disposed of his property with the intent to defraud his creditors; it was shown by his admissions that he was about to become a non-resident of the state, with the same intent (International Silver Co. v Hull, 45 L. R. A. N. S. 493).

E. E. Enterline and H. W. Rich, for respondent.

The appeal should be dismissed; appellant failed to prepare the record on appeal within 70 days after the making of the order discharging the attachment; the record does not show the specifications of error to have been filed within 10 days after the filing of the record on appeal (Hahn v. Bank, 171 P. 889; 172 P. 715; Goodrich v. Bank, 174 P. 191, 177 P. 134; Laws 1917, Chap. 32, Sec. 8); it was shown by the evidence that respondent used the proceeds from the sale of his drugstore to pay his creditors; there was no showing that he used said proceeds for any other purpose; it was further shown that he offered to raise and pay $ 3,200.00 on his note given appellant before its maturity, and further offered to secure the balance of the note by depositing collateral; there was no grounds for attachment; appellee had a right to prefer a creditor if he so desired (Bank v. Ranch Co., 5 Wyo. 50); no fraudulent intent could be imputed to respondent in the disposition of his property; the order discharging attachment should be affirmed.

BLYDENBURGH, JUSTICE. BEARD, C. J., and POTTER, J., concur.

OPINION

BLYDENBURGH, JUSTICE.

This case was brought to secure an attachment "before debt due" under the provisions of Chapter 311 (Sections 4890-4896), Wyoming Compiled Statutes 1910. A motion was made to discharge the attachment, a traverse to the affidavit for attachment filed by the defendant, and a hearing was had before the court below on the issue thus made. The court ordered the attachment discharged, and the plaintiff excepted to this order of the court. The case is brought here on direct appeal, the specifications of error alleging error only in making this order.

The grounds alleged for the attachment, as contained in the affidavit, are as follows:

"That said L. A. Millard has sold, conveyed, or otherwise disposed of, his property with the fraudulent intent to cheat and defraud his creditors, and to hinder and delay them in the collection of their debts."

"That said L. A. Millard is about to sell, convey, or dispose of, his property with the fraudulent intent to cheat and defraud his creditors, and to hinder and delay them in the collection of their debts."

"That the said L. A. Millard is about to become a non-resident of the State of Wyoming with the intent to defraud his creditors."

The affidavit of defendant in support of his motion to discharge the attachment is a specific denial of each of the grounds set up in the affidavit for attachment denying them in the same language. The plaintiff caused garnishee notices to be served under the attachment on both itself and upon Wyoming Sugar Company, a corporation, and no attempt was made to serve the attachment in any other way or to attach any tangible property. The answer filed by the plaintiff bank as garnishee was "That said Stockgrower's State Bank of Worland, Wyoming, has on deposit to the credit of said L. A. Millard, defendant, the sum of Sixteen Hundred Dollars", and the answer of Wyoming Sugar Company was to the effect that it owed a promissory note made payable to L. A. Millard in the sum of $ 5,000, said note being dated March 1, 1918, and due March 1, 1923, bearing interest at the rate of 6% per annum, which note was secured by a mortgage signed Wyoming Sugar Company on certain mentioned real estate, interest payable annually.

At the beginning of the hearing, after defendant had moved to dismiss the garnishment of the money in the plaintiff's hands, the plaintiff confessed this part of the motion and released the garnishment of the Stockgrowers' State Bank of Worland, the plaintiff. So the hearing proceeded with the only matter held under the attachment such as was evidenced by the answer of the Wyoming Sugar Company.

The facts, as shown by the record, are that the defendant was in 1918 engaged in the drug business at Worland; that he had borrowed from the plaintiff bank money evidenced at the time the suit was brought by two promissory notes, one for $ 3,500 and one for $ 1,500, each dated June 12, 1918, and each due 180 days after date with interest at the rate of 8 per cent. per annum, and these notes not yet due were the basis of this suit commenced Sept. 12, 1918. That on Aug. 2, 1918, the defendant entered into a contract for the sale of his entire stock and the fixtures of his drug business to George D. Cureton by the terms of which Cureton was to pay the defendant cash upon the completion of an inventory and $ 1,000 was to be deposited in the plaintiff bank at the execution of the contract to apply on the purchase price to be held by the bank in escrow with a copy of the agreement and to be paid to the defendant as liquidated damages in case Cureton failed to comply with his part of the agreement. There was to be allowed Cureton $ 700 discount from the invoice price, Cureton was to take possession within 30 days from the date of the agreement of sale and the property was to be invoiced on or about 25 days from the date of the agreement, the defendant in the meantime to remain in possession and conduct the business. The defendant agreed to "comply with the bulk sales law or furnish satisfactory bond to protect Cureton against outstanding bills at the option of defendant." That the plaintiff bank knew of the proposed sale and a cashier's check of the plaintiff bank was deposited in escrow with the plaintiff with a signed copy of the agreement as provided in said agreement. The invoice was not completed until about the 9th of September, Cureton in the meantime having made an arrangement to go into partnership with R. C. Schultz in the drug business and had gone east, leaving Schultz to take charge of the invoice and complete the deal. The amount the invoice showed should be paid the defendant Millard was $ 9,602.75, and there was left with B. J. Keys, the cashier of the First National Bank of Worland, a check of Schultz on said First National Bank for $ 5,102.75, and a check of Cureton on the Citizens' National Bank of Cheyenne for $ 3,500, which, with the $ 1,000 deposited with the plaintiff bank in escrow, made the $ 9,602.75, the amount to be paid the defendant for his stock of drugs. On the 9th of September the defendant Millard went to Keys at the First National Bank and presented what purported to be a list of his creditors and asked that the checks be turned over to him. Keys refused, as he claimed his instructions from Schultz were that Millard was to deposit a bond as well as a list of creditors. This list at that time was not sworn to. Millard went to see Schultz, who was at a garage getting ready to go out of town, and Schultz told him that if he would swear to the list he would direct Keys to turn over the checks, which he did over the telephone. Keys, who was a notary public, wrote under the list furnished by Millard, "I hereby certify that above is a list of all my creditors.

Subscribed and sworn to before me this 9th of Sept., 1918.

B. J. KEYS, Notary Public."

And the next morning when Millard came into the bank he had him sign it and then delivered to him the two checks of Schultz and Cureton, which checks the defendant immediately deposited to his checking account in the plaintiff bank, together with the $ 1,000 cashier's check that was in escrow, and as he at that time had an overdraft of $ 49.61 he had a credit to his checking account of $ 9,553.14. The defendant at once drew checks against this balance to pay his creditors, and among others one for $ 3,732.50 to pay $ 3,500 and interest due the First National Bank of Worland on a past due note, which indebtedness to the First National Bank and the notes in suit in this case given to the plaintiff bank were not given in the list of creditors, and there was also omitted therefrom several small amounts to other creditors, the statements or memoranda of which the defendant testified had become mislaid. The defendant was sworn as a witness and examined by and on behalf of the plaintiff and explained this by testifying that he thought he only had to give a list of his wholesale creditors, --those who had supplied goods for the store, and that Schultz told him all he wanted was a list of his wholesale creditors, and that he had told him that the list he had furnished was such a list, as near as he could remember, and as a fact he had no intention of omitting any such creditors. Upon the check for $ 3,732.50 to the First National Bank coming in to the plaintiff bank, its vice president and manager sought to collect the undue notes on which this suit...