Summers v. Heard

• Decision Date: 18 February 1899
• Citation: 50 S.W. 78,66 Ark. 550
• Parties: SUMMERS v. HEARD
• Court: Arkansas Supreme Court

50 S.W. 78

66 Ark. 550

SUMMERS v. HEARD

Supreme Court of Arkansas

February 18, 1899

Appeal from Monroe Circuit Court, JAMES S. THOMAS, Judge.

Judgment affirmed.

J. C Hawthorne, J. N. Cypert and Grant Green, Jr., for appellants.

The appellants acted in good faith and without malice. Therefore the court's instructions as to examplary damages were erroneous. 39 Ark. 387; 35 Ia. 306; 3 Suth. Dam. 472. The true measure of damages was the value of the property, with interest. 39 Ark. 387; 29 Ark. 448; 63 N.W. 737; 59 N.W. 387; 49 P. 910; 3 Suth. Dam. 472-5, 491; 527-8, 572. The sixth instruction given for appellee was erroneous. Appellee's knowledge put him on notice of the fraud of the transfer to him. 58 Ark. 446; 21 S.W. 1026; 50 Tex. 106; 42 Minn. 519; 39 Am. Rep. 481; 56 Mo.App. 541; 86 Mich. 556; 79 Wis. 1. The agreement to sell the goods, pay himself out of the proceeds and return the balance, was fraudulent. 49 Cal. 620; 55 Wis 181; 1 L. R. A. 336; 32 L. R. A. 33, 40, note, 41, note; 38 A. 991. Appellee's attempt to buy an interest in the business, without having the proceeds paid on debts of the business, was fraud on the creditors. 58 Ark. 446; 50 Ark. 320; 55 Ark. 579; 11 F. 559; 52 Ark. 556; Big. Fraud, 288. If appellee mixed and confused the new goods which he bought with the stock, so that they were not distinguishable, the whole stock was subject to appellant's claim. 52 Mass. 493; 3 N.Y. 379; 1 Am. & Eng. Enc. Law, 57, and note; 49 Ark. 457; 60 Ark. 425; 11 So. 946.

N. W. Norton, Parker & Parker, for appellees.

The officer, after being notified that the property was that of the partnership, had no right to do more than take an inventory. Sand. & H. Dig. § 3062. Appellant's statement of the rule as to measure of damages only applies to cases where the business is not broken up. 59 Miss. 430; 23 O. St. 358; 1 Suth. Dam. 98-99, 121-2; 3 Suth. Dam. 153, 475-6; 80 N.Y. 614; 11 Mich. 542; 14 ib. 34; 32 ib. 77; 82 Am. Dec. 679; 23 S.W. 474; 16 S.W. 1101; 46 F. 927; 52 N.W. 609. Exemplary damages proper. 44 Ark. 486; 1 Suth. Dam. 720, 723, 724, 725, 729.

J. C. Hawthorne, for appellants, on motion for rehearing.

The instruction of the court as to "actual damages," in which the court directed the jury that, in addition to the value of the property at time of seizure and interest thereon, they might assess "such further sum as you will find from the proof that the plaintiff had sustained from being deprived of his business," is abstract and erroneous.

Parker & Parker and Norton & Prewett, for appellee, on motion for rehearing.

Appellee was entitled to compensation for the injury done his business. 72 N.W. 553; 49 P. 911; 2 N.W. 847. Where one is engaged in a prosperous business, the damage occasioned him by seizing his goods is not measured simply by the value of the goods. 14 Mo. 104; 61 N.Y. 245; 60 N.Y. 448.

BATTLE, J. HUGHES and RIDDICK, JJ., concur. BUNN, C. J., and WOOD, J., dissent.

OPINION

BATTLE, J.

This action was instituted by S. F. Heard against Summers & Watson and others to recover damages caused by a constable, W. M. Graham, one of the defendants, levying on and selling a stock of drugs and other goods belonging to a partnership, composed of himself and O. F. Jenkins, or Jenkins' wife, to satisfy an execution in favor of the defendants, Summers & Watson, and against O. F. Jenkins, as well as executions in favor of others and against the same person. Plaintiff alleged in his complaint that, on or about the 13th day of April, 1895, he was in possession of a stock of drugs and other goods in the town of Clarendon, in this state; that he was the owner of one-half of such stock, and the other half was pledged to him as security for money loaned; that O. F. Jenkins, or his wife, owned the latter half, subject to the pledge; that, on the day before stated, the defendant, W. M. Graham, as constable of Cache township, in Monroe county, had in his hands sundry executions issued by a justice of the peace against O. F. Jenkins, and in favor of different persons, the defendants Summers & Watson being of the number; that Graham undertook to levy the executions upon the stock in his possession, when he asserted his right thereto, and the defendants Summers & Watson, Parker C. Ewan, J. P. Lee and M. J. Manning, executed and delivered to the constable a bond, whereby they agreed to indemnify him against all damages which he might sustain in consequence of the seizure and sale of the goods, and to pay to any claimant of the stock any damages he should sustain by reason of such seizure and sale under executions; that the constable seized the goods; that, within fifteen days thereafter, the plaintiff gave him notice that the goods so seized were partnership property, and in part belonged to the plaintiff; and that the constable, disregarding his claim and rights, sold the stock under the executions. Plaintiff further alleged that the goods so sold were worth the sum of $ 1,500, and that he was damaged by reason of such seizure and sale in the same amount; and he asked for judgment for $ 3,000.

The defendants, answering, denied that plaintiff was in possession, or the owner, of the stock of goods, and admitted the issue of the executions, the levy thereof, the claim by plaintiff, the execution of the bond to indemnify, the notice to the constable by plaintiff, and the sale, and denied that the goods were of the value of $ 1,500. Answering further, they alleged: "That O. F. Jenkins was indebted to the defendants, Summers & Watson, W. N. Wilkerson & Co., and other creditors, and that claims amounting to five hundred dollars were in the hands of Ewan, Manning & Lee for the purpose of collection, and that in October, 1894, the said O. F. Jenkins, for the purpose of securing the payment of said sums, pledged all of said goods to the defendants; that the plaintiff's agent soon thereafter came to Clarendon, and was advised of the financial condition of Jenkins, and also that the goods were in the possession of Ewan, Manning & Lee as collateral security for the payment of the claims held by them; that he thereupon agreed to pay the claims held by Ewan, Manning & Lee, and also all other indebtedness of said O. F. Jenkins, and to become the owner of one half interest in the stock of goods in consideration therefor; that, notwithstanding this agreement, he disregarded it, and pretended to purchase one half interest in said stock of goods for the sum of five hundred dollars, but only paid two hundred and fifty dollars thereon; that he knew, at the time of the purchase, that the goods were pledged to the defendants, and that Jenkins held the property as their agent; that, for the purpose of further complicating the affairs of the said Jenkins, and aiding him to defraud his creditors, he induced said Jenkins to make and deliver to his wife, Mrs. C. W. Jenkins, a bill of sale of the other half interest in the stock of goods, and then induced the wife to pledge the said goods to him as security for money that he had originally agreed to pay for the one half interest to which he claimed title; that the pledge was made without consideration, and that the consideration for the purchase of the goods was made for the purpose of defrauding the creditors of Jenkins; that there was no consideration moved from Mrs. C. W. Jenkins to her husband for the transfer of the portion of the goods; that the defendant O. F. Jenkins and his wife were insolvent. The plaintiff knew these facts, and entered into the transaction with them for the purpose of, and with a view to, defeating the claims of the creditors."

The issues in the action were tried by a jury. Evidence was adduced at the trial tending to prove substantially the following facts: In October, 1894, O. F. Jenkins was doing a mercantile business in Clarendon, in this state, selling drugs and other goods. He was much in debt. Ewan, Manning & Lee, a firm of lawyers, held for their clients claims against him amounting to $ 295.12. To secure these claims, he executed to them a bill of sale, whereby he bargained and sold to them his stock of goods. This was on the 30th of October, 1894. In December following, S. F Heard, through his agent, Cicero Heard, entered into negotiations with Jenkins for the purchase of one-half interest in his stock of goods and a partnership in his business. On the 19th of the same month, he promised Ewan, Manning & Lee that he would form no partnership with Jenkins until Jenkins' debts were paid. On the 19th of December, 1894, Heard purchased of Jenkins one-half of his stock of goods, and formed a partnership with him in the business in which Jenkins was at the time engaged. On the 20th of the same month, he paid to Ewan, Manning & Lee $ 200 on the bill of sale, in part payment of the claims held by them, and at other times paid ninety-five dollars to other creditors. About the last of February, 1895, Ewan, Manning & Lee received the claim of W. N. Wilkerson & Co. against Jenkins for $ 224.53, and Heard promised to pay it. In the meantime, Heard, having ascertained that the stock of goods purchased was not as large or valuable as represented, and that Jenkins' indebtedness was much larger than he said it was, offered to rescind their contract; and Jenkins refused, but in lieu thereof agreed with Heard to take, and did accept, the $ 295 paid to his creditors in full payment of the amount to be paid for one-half of the goods and for the partnership business. Afterwards Jenkins sold, or pretended to sell, the other half interest in the goods and partnership to his wife for $ 100, taking her note for the purchase money. On the 4th of March, 1895, Jenkins and his wife mortgaged his or her half interest in the goods to Heard, to secure him in any advances he...