Hodges Bros. v. Coleman & Carroll

76 Ala. 103
CourtSupreme Court of Alabama
DecidedDecember 15, 1884
StatusPublished
Cited by66 cases

This text of 76 Ala. 103 (Hodges Bros. v. Coleman & Carroll) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hodges Bros. v. Coleman & Carroll, 76 Ala. 103 (Ala. 1884).

Opinion

STONE, C. J.

— Ilodges Brothers were creditors of Jackson & Brother, and sued out attachment against them. The ground of the attachment was, that Jackson & Brother had fraudulently disposed of their property. The only levy of the attachment was a service on Coleman & Carroll as garnishees. Coleman & Carroll, being partners, made a joint answer to the garnishment, in which they say, that they were not indebted to the said defendants, Jackson & Brother, at the time of the service of the garnishment, nor at the time of making the answer, and would not be indebted to them in future by contract then existing, and that they had not in their possession, or under their control, personal nor real property, nor things in action, belonging to the defendants, nor did they have at the time of the service of the garnishment. This answer was controverted by the oath of plaintiffs’ counsel, that he believed it to be untrue.

Plaintiffs in attachment tendered an issue, in which they averred that the ans-wer was untrue, “ in this: that at the time of service of the writ of garnishment, the said Coleman & Carroll were in possession of a stock of goods, wares and merchandise, which they claim to have bought from one Bruner and J. Loeb & Brother, who claimed to have bought from defendants. But plaintiffs aver that, in fact, there were no sales of said goods, either by Jackson & Brother to said Simon Bruner and J. Loeb & Brother, nor by said Simon Bruner and J. Loeb & Brother to said Coleman & Carroll; but, if there were such sales, then said plaintiffs [aver] that the transfer of said stock of goods, &c., to said Bruner and said J. Loeb & Brother ■was for the purpose of hindering, delaying, or defrauding the creditors of said Jackson & Brother, and that said W. S. Coleman and J. S. Carroll had notice of the same. Plaintiffs aver [112]*112that, at said time, there was a balance due said Bruner and J. Loeb & Brother by said Coleman & Carroll.” Garnishees took issue on the first of the above specifications, and demurred to the second. The Circuit Court sustained the demurrer, and that ruling presents one of the errors assigned.

It will be observed that the first of the specifications relies for recovery, on the averment, that there was either no sale from Jackson to Bruner and Loeb, and from Bruner and Loeb to Coleman & Carroll, or that the sale from Jackson to Bruner and Loeb was fraudulent, and that Coleman & Carroll purchased with knowledge of that fact. Each of these phases of the averment seeks to show that the merchandise itself, in the hands of Coleman c% Carroll, was subject to be seized and sold under plaintiffs’ attachment. If the plaintiffs succeeded in making good that averment, then it would have been the duty of the court to render judgment of condemnation, and that the goods be delivered up on demand, and sold by the sheriff in satisfaction of plaintiffs’ claim. — Code of 1876; §§ 3295 et seq. Such jDroeeeding seeks no money judgment against the garnishee, in the first instance. It seeks to discover property, and make it liable. Not so the second specification. If sufficient in its averments, it seeks to show that Coleman & Carroll are indebted, and seeks to recover a money judgment against them. In other words, that they are, in effect, indebted to Jackson & Brother.

It is contended for garnishees, that garnishment at law is not the proper process for reaching a'liability, such as plaintiffs seek here to establish. The argument is, that inasmuch as plaintiffs, to maintain their claim, must set aside and avoid the sale from Jackson to Bruner and Loeb, for fraud, thus leaving the ownership of the goods in Jackson, and converting Coleman & Carroll into purchasers from the latter, this would be to claim both against and under the alleged sale to Bruner and Loeb. Against it, in this, that it passed no title to them; under it, in this, that it enabled them to sell the goods to Coleman & Carroll, and thus create a debt from the latter to Jackson, whom they did not know in the transaction. It is questionable if garnishment at law is flexible enough for such redress as this. — Godden v. Pierson, 42 Ala. 370. And it is equally questionable, whether such proceeding will withstand the test, that garnishment at law can condemn only such liability as will support debt, or indebitatus assumpsit, by the defendant debtor against the garnishee. — 1 Brick. Dig. 175, §§ 313, 314; Simpson v. Tippin, 5 Stew. & Por. 208; Jones v. Crews, 64 Ala. 368. And if such proceeding could, in any case, be maintained, the rights of the intermediate party — • Bruner and Loeb in this case — ^could not be pronounced upon, [113]*113without first bringing them in by notice. — Moore v. Escott, 50 Ala. 77 ; Boyd v. Cobbs, Ib. 82.

We need not, however, consider or decide the question last above raised. The 'entire averment is, that “there was a balance due said Bruner and Loeb & Brother from Coleman & Carroll.” Not a word said as to the consideration, or occasion of such balance of indebtedness. That the garnishees were indebted to Bruner and Loeb, certainly would not, without more, show that such indebtedness should be condemned for the payment of Jackson’s debt. This averment, to be good, should have been made sufficient in itself. The demurrer to this specification was rightfully sustained; and by that ruling, this case, in the court below, was narrowed to the inquiry, had Coleman & Carroll, when summoned as garnishees, merchandise in their possession, which should be condemned to the payment of Jackson’s debt to plaintiffs. This inquiry made it necessary to determine, first, whether the sale to Bruner and Loeb was bona fide, or fraudulent; and, second, if fraudulent, were Coleman & Carroll bona fide purchasers for value, without notice. On each of these issues — fraud, or mala fides in the sale by Jackson to Bruner and Loeb, and notice of such fraud traced to Coleman & Carroll — the burden of proof was on the attaching plaintiffs.

Notice, to be sufficient, need not always be actual. On the contrary, it is sufficient if it be constructive, or if it be shown that the party sought to be charged had knowledge of suggestive facts, which, if followed up, would have led to a discovery of the fraud. To come within the clause last expressed, the known fact or facts must be of unusual or suspicious nature, must have reference to the transaction sought to be impeached, and must so relate to it as that, if faithfully pursued and inquired into, they will lead to a knowledge of the fraud committed. Bear in mind, we are dealing now with the second phase of the inquiry — the question of notice to Coleman & Carroll, of a fraud perpetrated by Jackson and Bruner and Loeb on Hodges Brothers — the proof of which fraud is an entirely different matter, dependent on entirely different testimony. We are dealing with this question, as if fraud in the sale from Jackson to Bruner and Loeb was conceded. It follows, that any testimony, lawful in form, tending to prove either of these disputed facts, ought to have been admitted.

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Bluebook (online)
76 Ala. 103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hodges-bros-v-coleman-carroll-ala-1884.