Woodring v. Winner Nat. Bank of Winner, S.D.

• Decision Date: 08 November 1929
• Docket Number: 6553.
• Citation: 227 N.W. 438,56 S.D. 43
• Parties: WOODRING et al. v. WINNER NAT. BANK OF WINNER, S. D., et al.
• Court: South Dakota Supreme Court

227 N.W. 438

56 S.D. 43

WOODRING et al. v. WINNER NAT. BANK OF WINNER, S. D., et al.

No. 6553.

Supreme Court of South Dakota

November 8, 1929

Appeal from Circuit Court, Tripp County; J. R. Cash, Judge.

Action by J. E. Woodring and others against the Winner National Bank of Winner, S. D., and others. Judgment for plaintiffs, and from the judgment and an order denying a new trial defendants appeal. Reversed and remanded.

E. E Wagner, of Mitchell, and O. D. Olmstead, of Winner, for appellants.

W. J Hooper, of Gregory, and Roscoe Knodell, of Winner, for respondents.

BROWN J.

In January, 1925, Frank Vyralek, who owned and carried on a meat market business in Winner, was in financial difficulties, the Winner National Bank having a judgment against him for $2,663, upon which an execution had been issued and was in the hands of the sheriff, and on the 5th day of that month Vyralek made a bill of sale of all personal property in the meat market to plaintiffs and gave them a lease for five years of the building and plaintiffs at once went into possession of the market and carried on its operation. Plaintiffs paid no cash consideration at the time of the transfer, but gave three notes, two for $1,000 each and one for $3,000, and assumed payment of Vyralek's bills to the amount of $785. The two notes for $1,000 each were delivered to Vyralek's wife who had a mortgage on the property, and the $3,000 note was left in the hands of the attorney who drew up the bill of sale. It appears that he was to hold the note as a protection to the purchasers in case any adverse claims to the property should be asserted; $400 had been paid on one of the $1,000 notes at the time of the occurrence upon which this action is founded.

In the sale or transfer of the property from Vyralek to plaintiffs, the provisions of the Bulk Sales Law (Rev. Code 1919, §§ 914-921) were not in any manner complied with, and plaintiffs knew that there was an execution in the hands of the sheriff on the judgment of Winner National Bank. On February 18th defendants Winner National Bank, G. L. Thompson, and Joseph Pestal filed a petition in involuntary bankruptcy against Vyralek and on the same day filed with the referee in bankruptcy an affidavit of O. D. Olmstead, one of the attorneys for the petitioners, stating that Vyralek had committed an act of bankruptcy on December 1, 1924, by giving mortgages to his wife on the meat market property for the purpose of hindering, delaying, and defrauding petitioners, and that on January 7th he committed an act of bankruptcy by causing to be registered in the office of the register of deeds a bill of sale of all property of a chattel nature contained in the meat market to the plaintiffs herein, which bill of sale was alleged to be without consideration and made for the purpose of hindering, delaying, and defrauding the petitioners, and asking for the issuance of a special warrant to the marshal directing him to seize all of the property real and personal of Vyralek. On this affidavit the referee issued a warrant to the marshal on February 18th, directing him to take possession of all of the estate real and personal of Vyralek and all of his books of account and papers and hold and keep the same subject to the further order of the court.

It is admitted that the defendants Winner National Bank, M. P Dougherty, G. L. Thompson, and Joseph Pestal instructed the marshal to take possession of the property described in the complaint, which property at the time of the seizure was in the actual possession of plaintiffs and all of which had been in their possession from January 5th, except in so far as some of it had been sold in the usual course of retail trade and had been replaced by other similar property purchased by plaintiffs in the course of such retail trade. On February 19th the marshal went to the meat market, and against the protests of plaintiffs and under threats of arrest, as testified to by them, took possession of all of the property, took the money out of the cash register, and locked up the premises. It does not appear that any trustee in bankruptcy was ever appointed, but on March 20th Vyralek having procured the necessary funds to pay petitioners' claims, a stipulation was entered into between the attorney for petitioners and attorneys for Vyralek that on payment by Vyralek of the amount of the claims of petitioners, the bankruptcy proceedings be dismissed, and in pursuance of this stipulation an order was entered by the bankruptcy court on March 20th, reciting the payment, and dismissing the petition and directing that all property of the alleged bankrupt seized under the warrant hereinbefore referred to be returned to Vyralek, that the proceeds of the property sold by the marshal as perishable while he had possession be turned over to the attorneys of the alleged bankrupt, and that the petitioners be relieved from any liability by reason of filing the petition in bankruptcy or taking possession of the property of the alleged bankrupt. On March 26th the property was returned to plaintiffs through the delivery of the keys to them by Vyralek, and the attorneys for Vyralek deposited in the bank to the credit of plaintiffs some $500, which was the proceeds of perishable goods sold by the marshal. In this action for damages for wrongful taking of plaintiff's property and interruption of their business, testimony on behalf of plaintiffs was to the effect that property seized by the marshal and not returned to them was of the value of $1,123.48, that the refrigerating machinery had been allowed to get out of order while the place was closed and the expense of repairing it was $55, that the value of the use and occupation of the building and tools during the time they were deprived of its use was $50 a week, and that the average daily profits of the business prior to February 20th...