Winchester Partridge Manuf Co v. Creary

• Decision Date: 21 December 1885
• Parties: WINCHESTER & PARTRIDGE MANUF'G CO. v. CREARY and others. Filed
• Court: U.S. Supreme Court

6 S.Ct. 369

116 U.S. 161

29 L.Ed. 591

WINCHESTER & PARTRIDGE MANUF'G CO. v. CREARY and others.

Filed December 21, 1885.

M. F. Morris, for plaintiff in error.

B. D. Lee, Eppa Hunton and Jeff Chandler, for defendants in error.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court:

The Winchester & Partidge Manufacturing Company, a Wisconsin corporation, brought this action to recover damages for the seizure and sale, under an attachment sued out on the thirtieth day of March, 1882, by J. E. Hayner & Co., against the property of John A. Webb & Co., of certain goods, wares, and merchandise, constituting a stock in trade; of which property the plaintiff claims to have been, at the time the attachment was issued and levied, the owner by purchase from the defendants in the attachment suit. The seizure and sale were made by the direction of Hayner & Co., who, prior to the levy, executed to the defendant Creary, the officer who received the attachment, an indemnifying bond with sureties. Before the levy the officer was informed by plaintiff's agent, and also by John A. Webb, that the property belonged to plaintiff. The defense proceeds upon the ground that the alleged sale was fraudulent and void as against the defendants Hayner & Co., and other creditors of the vendors.

The evidence, so far as competent, tended to establish the following facts: On and prior to the thirteenth of March, 1882, John A. Webb and Joseph W. Webb were engaged at Austin, Texas, under the firm name of John A. Webb & Co., in selling wagons, agricultural implements, machinery, etc. In the course of business they became largely indebted to various persons, firms, and corporations with whom they had dealt; amoung others, to the plaintiff in the sum of $19,000, and to the defendants Hayner & Co. in the sum of $16,262. On the day last named they sold, after inventory, and by bill of sale, their entire stock in trade, and a large amount of unsettled accounts, to the plaintiff for the sum of $43,000, which was at that time the fair value of the property. Of the purchase price, $19,000 was paid by the cancellation of plaintiff's claim against the vendors, and the balance was paid by its promissory notes, of different amounts and payable at different times. These notes were used by Webb & Co. in payment of their debts, no part of them being withheld from creditors. At the time of the sale the venders were insolvent. That fact was recognized by them, and was known as well to plaintiff as to Hayner & Co., and to other creditors. By the sale of March 13, 1882, the vendee intended to obtain, and the vendors intended to give to it, a preference over all other creditors. Before the sale, the plaintiff requested Webb & Co. to transfer to it only so much of their property as was necessary to discharge its claim. This was refused by Webb & Co., who, in view of the character of their stock, insisted upon selling nothing less than the whole of it, together with their unsettled accounts. Plaintiff would not have purchased at all if Webb & Co. had been able to secure them in any way. It made the purchase because there was no other mode of saving its claim. Immediately upon the sale being effected, Webb & Co. surrendered, and the plaintiff, by its agent Spaulding, took possession of the articles sold, and through him thereafter and until the before-mentioned attachment was levied, conducted the business, exercising absolute control over the property. Within a day or two after taking possession, the plaintiff caused such an alteration in the sign of the establishment as showed that the business was being conducted by it as the successor of John A. Webb & Co. After the sale, the members of that firm remained in the employment of plaintiff as clerks or salesmen, at a fixed monthly compensation. This was in pursuance of an understanding with the plaintiff at the time of the sale; their knowledge of the business, and their acquaintance with customers, being regarded by it as important in the disposition of the property. Plaintiff also retained in its employment others who had been unduly pressed by Hayner & Co., and for that reason did not, at the time of the sale, feel as kindly towards them as towards other creditors, and intended by the sale to give a preference to other creditors over Hayner & Co,—of which fact plaintiff was informed at the time of its purchase,—they had no purpose to hinder and delay Hayner & Co. in the collection of their debts, except as that result was involved in their giving preference to the plaintiff; nor had plaintiff any purpose, in the whole transaction, except by means of the purchase to secure its own debt. The evidence discloses a race of diligence between creditors, who knew the failing condition of their common debtors, and knew that the latter had the right to make a preference among them.

The defendants, in their answer, charge that the alleged purchase by plaintiff was pursuant to a combination and conspiracy between it and the firm of John A. Webb & Co., whereby a pretended sale was to...