Dillard & Coffin Co. v. Smith

59 S.W. 1010, 105 Tenn. 372
CourtTennessee Supreme Court
DecidedJune 26, 1900
StatusPublished
Cited by9 cases

This text of 59 S.W. 1010 (Dillard & Coffin Co. v. Smith) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dillard & Coffin Co. v. Smith, 59 S.W. 1010, 105 Tenn. 372 (Tenn. 1900).

Opinion

Wilkes, J.

The firm of Smith Bros, was composed of T. M. Smith and J. L. Smith, and was engaged in the mercantile business at Cedar Chapel, in Hard-eman County. On the' first of January, 1898, the firm sold its stock of merchandise, together with a house and lot, a mule, horse, two-horse wagon, and cow, to Samuel Smith, a brother, the recited consideration being the satisfaction! of a debt due to the brother from the firm of $580, and a note [374]*374for about $1,570, payable to tbe firm April 1, 1898, tbe entire consideration being $2,158. It appears tbat all the property belonged to tbe firm, and was used as partnership property, except tbe cow, and constituted virtually all tbe property, the firm or its members owned, and tbat they were in debt and insolvent, their matured debts being something over $3,000.

The Dillard- & Coffin Co. were creditors of tbe firm, by open account, for money advanced and paid out for them in tbe sum of $1,809.30.

They pressed tbe firm for . payments on their debt, and tbe firm promised them to ship them cotton and reduce tbe debt, and so wrote them on the 29th of December, 1897, before tbe conveyance on the first of January, 1898, promising also in the letter to call upon them by the third or fourth of J anuary and confer in regard to the debt.

On the 28th of January, 1898, the Dillard & Coffin Co. filed their bill, attacking the conveyance to Samuel Smith as fraudulent, and asking that the goods be subjected to the payment of their debt. The bill was not sworn to, and did not ask for any extraordinary process, nor apply for a receiver. The prayer of the bill is that the conveyance be held fraudulent and all the property applied to complainant’s debt, but that if the debt to Samuel Smith be held to be valid, and that he did not participate in the fraud, that he be [375]*375required to pay the note into Court, and that the same be applied to complainant’s debt. The bill did not allege that Samuel Smith had disposed of the goods, or any part of them, and did not ask a judgment for any amount on that account, but proceeded upon the idea that the goods were still in his hands and subject to complainant’s debt, and that Samuel Smith was attempting to sell or dispose of them.

On April 1, 1898, on leave granted, complainant filed an amended and supplemental ■ bill making W. 0. Newsom, Robert bTewsom, and J. S. Newsom also defendants thereto; and charging, in addition to the allegations of the original bill, that since it was filed Samuel Smith had sold part of ■ the goods in ordinary course of trade, and the remainder to the Newsoms, and that the Newsoms had actual, and constructive notice of the existence of complainant’s lien, and had purchased pendente lite, and with' general notice of the suit and lien, and had since sold the goods, but the amounts and values received could not be stated. This amended and supplemental bill prayed for judgment against Samuel Smith and the New-soms for the value of the goods received by them, respectively, ■ and for general relief. The amended and supplemental bill does not charge fraud in the sale from Samuel Smith to the Newsoms, was not sworn to, did not ask any extraordinary process, or for a receiver, but was based upon [376]*376the idea that complainant had a right to follow the goods into the hands of the Newsoms and subject them, and also to have personal judgment for such as were sold by either Smith or the New-soms, respectively.

Smith and Smith Bros, answered the original bill, admitting the sale, hut denying all fraud, and claiming that the same was bona, fide and for full value; that the firm was owing Samuel Smith $589.09, and he was demanding payment of same, and being unable to meet the demand, the sale was made for the purpose of paying this debt and the other consideration named.

They also answered the amended and supplemental bill and admitted that Samuel Smith sold a part of the goods in usual course- of trade while he had them, and also had others and sold the remainder to Newsom & Co. The NewSoms demurred, but their demurrer was overruled with leave to rely upon the same grounds in the answer. They also answered that upon information they believed the sale from Smith Bros, to Samuel Smith was bona 'fide and free from fraud; that they purchased the goods and sold part in usual course of trade, and the remainder to Newson & Son, and the latter sold the stock in usual course, adding new goods until but little remained of the original stock. They further stated that they ■ had no notice, actual or constructive, of any lien on thp goods in complain[377]*377ant’s favor, and, in addition, that they consulted complainant and was by him assured that he had no lien on the goods, and were advised to buy if they desired to do so, that they did buy and paid a full price, and they deny any right to any lien or personal judgment in complainant’s favor.

Proof was taken and on final hearing the Chancellor gave judgment in complainant’s favor for $1,705.78 against Smith Bros., being the amount of the debt claimed, and held that the sale made by Smith Bros, to Samuel Smith was fraudulent and void as against complainant except to the extent of the debt due to Samuel Smith of $589.08: that by the filing of the bill complainant acquired a lien on the goods in the hands . of Samuel Smith and a right to an accounting for all of the same and a right to a personal judgment for all proceeds of goods sold beyond the amount of his debt, and the amount was fixed, after giving the credit for the debt at $1,098.30, and for this judgment was rendered against them. —

The Court further held that the ISTewsoms & Co. had notice of the claim of complainants and their lien and were liable to the extent of the value of the goods received by them and afterwards sold, which was fixed at $133.38, and for this amount judgment was rendered against the firm of ISTewsom & Co. and its members, but it was [378]*378further provided that a payment of either judgment should, as to complainant, be a satisfaction pro tanto of the others. The Newsoms and Samuel Smith appealed and assigned errors.

The first assignment is that the evidence in the case does not make out a case of actual fraud as to the purchaser, Samuel Smith. Whether the Chancellor so found does not appear from any express statement in his decree, and his view is only indicated by the recital that the sale was fraudulent and void except to the extent that Smith Bros, were indebted to Samuel Smith. The facts as shown by the record are that the Smith Bros, were indebted to insolvency and they were being pressed for payment. Samuel Smith,' the brother, was a man not engaged in the mercantile business, and it is unreasonable that he . should have bought this stock of goods from his brothers and involved himself therefor unless he believed them indebted to insolvency and either desired to aid them or protect his own debt. That the firm of Smith Bros, made the conyevance tó protect themselves from their creditors can, under the record, admit of no doubt, and the subsequent dealing between the Smith Bros. and Samuel Smith leaves but little doubt that he was aiding them in this purpose, and after getting the amount claimed by himself, he ' turned the balance over to his brothers with the purpose that they should get the benefit of the same. It does [379]

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Cite This Page — Counsel Stack

Bluebook (online)
59 S.W. 1010, 105 Tenn. 372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dillard-coffin-co-v-smith-tenn-1900.