Ballard v. Eckman & Vetsburg

20 Fla. 661

• Court: Supreme Court of Florida
• Decided: January 15, 1884
• Status: Published

Opinion

The Chief-Justice delivered the opinion of the court.

The first and second grounds of appeal are the allowance of preliminary injunction on bill and petition without oath or other proof of the allegations in either paper, and because no bond was given as required by the order.

Neither of these grounds, if sustained, will be sufficient to remove the final decree, because this .appeal was not made until the final decree had been entered, upon the hearing upon bill, answers and testimony. If the allegations of the bill are supported by the testimony sufficiently to overcome the answers of the defendants, the injunction and final decree may stand, even.if the orders allowing the preliminary injunctions were erroneously made.

Yet in view of the importance of the proceedings in this case, we ought not to hesitate to say that the allowance of the injunction upon the filing of the bill, and again, upon the petition after the dissolution of the first writ, were unauthorized, if the record sent here is correct.

The oath to the bill was made by one of the counsel, who swears “ that the] facts set forth in the foregoing bill are true to the best of his knowledge, information and belief.” It does not appear that he had any “ knowledge ” of the facts, or that he had any “ information. ” of any kind from any source, or that he “ believed ” anything stated in the bill. He asserts neither. He does not swear to a single tangible fact showing any knowledge, any information, any belief whatever. The bill was not supported by the oath of anybody, and yet an injunction was allowed, restraining defendants from interfering with a store of goods worth over two thousand dolíais; and the second injunction was allowed also upon a petition to which no oath was attached. We are inclined to believe that the record was imperfectly copied.

Such a verification as was made to the bill, according to this record, is not sufficient to justify the granting of an injunction. Bowes vs. Hoeg, 15 Fla., 403. When an injunction is granted without the oath of some person to facts, or to reliable information as to the facts stated in the bill, it is a matter of course to dissolve the injunction before answer, and the officer to whom the application for an injunction is made should require to be annexed to the bill the additional affidavit of the person from whom the information is derived, verifying the truth of the information thus given. Campbell vs. Morrison, 7 Paige, 157; Bank of Orleans vs. Skinner, 9 Pai., 305; Horne vs. Moody, 59 Ga., 731.

JSTo receiver was named in the order in this case, but it appears by the return of the sherifi on the order that he had taken possession of the store and stock of merchandise. By what authority this was done does not appear. The presumption is that it was done by some authority of the court which does not appear in the record. The reputation and credit of no man of business is safe if he is liable to be enjoined from pursuing his occupation or the care of his property, and to have a receiver or sherifi' put in possession of his effects upon a creditors’ bill alleging fraud in the most general terms, the truth of which no person asserts on oath.

As to the bond, we simply remark that it does not conform to the order of the court, not having been executed by the complainants, their agent or attorney ; nor does it name all the complainants in the suit; nor is it sealed by the obligors ; nor was its sufficiency approved. These were faults, but as before remarked, they cannot affect the regularity of the final decree.

It is alleged for error that the testimony of certain witnesses was improperly admitted, as their testimonj'' does not bear against II. D. Ballard. This testimony relates to transactions and declarations intended to show fraudulent and irregular conduct on the part of L. M. Ballard. In this aspect it was competent as against the latter at least. As to the objections to the testimony, and to questions addressed to witnesses on their examination before the referee, the record fails to show that any questions of this character were made upon the hearing ; and the omission of the court to rule specifically upon the matter is not the fault of the Judge. No motion appears to have been made to exclude or strike out any portion of the testimony. As the case comes here upon the pleadings and the testimony, we will examine the whole record, and endeavor to give the testimony such weight as we think it deserves.

The charge in the bill is very general. It is, that Louis M. Ballard, being indebted to complainants for goods sold to him in his business as a merchant, combined and confederated with H. D. Ballard, his brother, to defraud complainants, and transferred to his brother his stock of goods without consideration for the purpose of enabling the said L. M. Ballard to defraud complainants, and to evade payment of his just debts,, complainants having obtained judgments amounting to $2,296.85, and sued out executions upon which they can find nothing to levju The bill requires the defendants to answer certain interrogatories as to the indebtedness, the sale of the goods, for what consideration the sale was made,.and whether it was not made to keep his creditors from seizing the stock of goods. This' is the whole case made by the bill.

The answers show that prior to the recovery of the judgments, L. M. Ballard was engaged in trade with one English as a copartner, each owning one-half interest in the goods. That the merchandise was of the value of seven hundred dollars, and there was some other property in the store worth fifty dollars. That H. I). Ballard was in similar business at another place, and desii’ous to remove to the store of Ballard & English lie employed L. M. Ballard to purchase the interest of English. That L. M. Ballard purchased the interest of English in the stock for $400, and sold the whole to H. D. Ballard for $750, and delivered the goods to him. That H. D. Ballard paid L. M. Ballard in full for the stock before the filing of this bill, and removed his own stock into the store. The goods so brought in were of the value of $1,821.38, making, with the goods purchased of Ballard & English, a stock of the value of $2,571. That ever since the purchase by II. D. Ballard, February 8,1882, he has had possession of the goods as his own property, and has been engaged therein his usual mercantile business, until his store was taken possession of by the sheriff in July, 1882, under these proceedings. That íl. D. Ballard, before the seizure of the store, had bought for himself, in his own name, and put into the store, other goods of the value of $1,240.84. They deny that the sale by L. M. to H. D. Ballard was fraudulent, or designed to defraud the complainants, or other creditors of L. M.; and .aver that the sale was made in good faith, and for a full and valuable consideration ; and give a detailed statement of the consideration paid. Both defendants deny that L. M. Ballard had, at the time of the filing of the bill, or at any time subsequent to the sale, any interest whatever in the stock of goods. In brief, both defendants generally and specifically deny all the equities of the bill.

There was in evidence a written contract, showing that in March, 1882, Louis M. Ballard sold to II. I). Ballard a steam saw-mill and fixtures, oxen, carts, &c., for $1,800, of which $550 was acknowledged to be paid, and the balance to be paid in lumber.

The testimony on the part of the complainants as to the conversations and declarations of the defendants, standing uncontradicted, would go far towards showing that L. M. Ballard still had, after the sale to Hi D. Ballard in February, 1882, an interest in the stock of goods, at least to the extent of the value of the goods of Ballard & English; but this testimony is met quite fully by that of each of the defendants, by such explanations and contradictions as are at least plausible; and as the defendants are competent witnesses we must give their statement such weight .as should be given to other persons, making due allowance for the fact that they testify in their own interest.

The testimony of English is that the entire business when he went in was about $2,500, and when he went out it was about $1,900 The assets of the firm were the store-house, goods and accounts. He does not say how much he agree*! to give for a half interest, but says he paid $500, or thereabouts, in cash, and gave his note for the balance, and when he quit he owed $400 on the note. It was evidently a losing business. The evidence shows that he was paid $400 for his interest in the entire property when he sold out. The amount they owed at the time he sold is not shown. There is no evidence to contradict defendants’ statements that the goods in the store were of the value of about $750 when purchased by H. D. Ballard. It is shown that this was paid by H. D. Ballard before the filing of this bill.

The testimony as to what L. M. Ballard said about his embarrassments, and his desire to go into bankruptcy, and saving something for his family, as a reason for running the business in the name of English, was suspicious ; but there is no shadow of testimony showing that II. D. Ballard knew of these facts. II. D. Ballard brought a large stock from the store of Bevill & Co., amounting to over $1,800, aud put into the store with the goods he bought of L. M., and afterwards put in other goods purchased of merchants, amounting to $1,140, before the store was closed. The stock inventoried by the sheriff amounted to $2,200, and upwards. II. D. Ballard shows he had other property amounting to over $1,100, at the time he went to Medulla, besides his interest in the Bevill stock, with which he bought his brother’s stock and invested in the saw-mill property. His business in the store and mill was profitable up to the time he was closed up, in July, 1882. His brother, L. M., had not been successful in business, but had run largely in debt. In the face of these facts it is difficult to believe that the stock of goods belongs to Louis M. Ballard , the j udgment debtor. Hays testifies, and II. D. Ballard admits, that he told Hays that he was not interested in the store; and Ballard says that is' all that he said on the subject. The reason he said it was that he and Hays were running the mill business together, and the mill concern owed the store, and Hays wanted more time on his part of the mill debt, and he didn’t want Hays to get in any further. By this means he got a settlement with Hays. Hays does not again appear to contradict any part of this statement. What Ballard said to Booth was that if he gave ah' order on the store for the oxen, bought for the mill company, he, Ballard, would have to pay the store, and the mill company was already behind with the store, and he didn’t want to pay money for the oxen. Under the circumstances stated, there can be no conclusion that the purchase by H. L>. Ballard of the goods of L. M. v'as fraudulent, and was designed to hinder the collection of the debts of L. M. Ballard.

The decree finds “ that the sale by L. M. Ballard of the stock of goods in question was made without consideration, and for the purpose of defrauding the creditors of the said L. M. Ballard ; and it further appearing to the satisfaction of the court that any interest in said stock of goods which may have been owned by the said Hiram D. Ballard had been transferred by him to said Louis, and there is no doubt that the entire stock is subject to the judgments and executions of the complainants,” &c.

We cannot agree that the evidence in this record shows that Hiram TX Ballard made a fraudulent purchase of the goods of L. M. Ballard; nor is there any testimony'- here from which we can infer that Hiram D. afterwards sold the stock to L. M.

The charge in the bill was a general one of a combination to defraud creditors. The answers of both defendants deny generally and specifically the fraud charged, and show that the transaction was bona fide. The facts stated in the answers as to the consideration and the intent are pertinent to the charge made. These answers are not overcome by the testimony in the case. The testimony as to the facts accompanying the sale of the goods and the subsequent conduct of the business fully sustains the answers. Aside from what are shown by Hays to be the declarations of H. D. Ballard to him, there is no testimony throwing suspicion upon the title of H. I). Ballard to the store of goods at the time the bill was filed. The admission or declaration said to have been made to Hays is at variance with the facts shown by other testimony. “ With respect to all verbal admissions they ought to be received with the greatest caution. The evidence, consisting as it does in the mere repetition of oral statements, is subject to much imperfection and mistake; the party himself either being misinformed or not having clearly expressed his own meaning, or the witness having misunderstood him. It frequently happens also that the witness, by unintentionally altering a few of the expressions really used, gives an effect to the statement completely at variance with what the party actually did say.” 1 Greenl. Ev., Sec. 200.

The statement which Hays says was made to him by H. D. Ballard was made for the purpose, as Ballard swears, of inducing Hays to pay what he owed, as one of the mill company, to the store.

“.The question of fraud is one of motive and intent, and can rarely, if ever, be considered as a single fact; but a conclusion, to be inferred from all the circumstances of the case. In the proof, however, the same general rule prevails in equity as at law; it is not to be presumed, but must be proved.” Wilson vs. Lott, 5 Fla., 317, per Thompson, J. One in failing circumstances has a right to sell his property, and of course any one has a corresponding right to purchase. The only.limitation upon the exercise of these rights is, that the sale and purchase be in good faith and for a valuable consideration. If the appellant’s purchase falls within this rule—if he purchased front the vendor in. good faith and for a fair price—it is perfectly immaterial whether the vendor was embarrassed or insolvent,. or whether the condition of his affairs was or was not known to the vendees. Barrow vs. Bailey, 5 Fla., 25.

It is said by appellants that because the stock of L. M. Ballard, in the store when he sold it, was exempt from sei'z-, ure for his debts, there could have been no fraud as to creditors in making the sale. While it is true that any sale or other disposition of the exempt property cannot be a fraud upon creditors, who cannot subject such property to the payment of their demands; (see Bump on Fraudulent Conveyances, 2d Ed., 242, and citations ;) yet it does not appear precisely what other personal property was owned by L. M. Ballard, and it cannot be determined whether these goods might have jJjeen exempted. The question, therefore, of exemption, does not necessarily enter into the case.

The decree is reversed, and the cause remanded, with directions to dismiss the bill.