Stix & Co. v. Keith

85 Ala. 465

• Court: Supreme Court of Alabama
• Decided: December 15, 1888
• Status: Published

Opinion

STONE, 0. J.

On the 19th day of December, 1884, Keith purchased from Fennell a half interest in a stock of merchandise, and became his equal partner in the business. Twenty days later — January 9,1885 — he purchased the other half interest, and continued the business in his individual name. He did not purchase any interest in Fennell’s bills receivable, nor is there testimony in the record tending to prove their amount or value. It is neither proved nor claimed that Keith assumed Fennell’s debts in either of these purchases. The uncontroverted testimony is, that Keith, for the undivided half interest, promised and paid twenty-two hundred dollars, and for the remaining half interest twenty-four hundred and seventy dollars; all done and completed within a few days after the respective purchases. The invoice value of the goods was between five and six thousand dollars, and witnesses cover the same margin in fixing their value.

On the 19th day of January, 1885, the appellants, Louis Stix & Co., sued out an attachment against Fennell, on the alleged ground that he had fraudulently disposed of his property and effects, claiming that he owed them something over eight hundred dollars. Under said attachment, the goods were levied on, and the store taken possession of the same day, by the United States marshal. While the goods and store were so in the hands of the United States marshal, other attachments, at the suit of other creditors of Fennell, were placed in his hands, and were also levied on the goods. The aggregate of the attachments thus levied equalled or exceeded the value of the merchandise. No part of the merchandise, or its proceeds, was ever restored to Keith. The attachment suits were prosecuted to judgments, and the goods were sold in satisfaction of them. The sale of the goods yielded thirty-five hundred dollars, eight hundred and eighty dollars or more of which were applied to the satisfaction of the judgment in favor of Stix & Co. The balance went to the later attaching creditors of Fennell.

The present action of trespass de bonis asportafis was instituted by Keith, and counts in damages for taking and carrying away the entire stock of goods. The defendants attempted to justify under process, not against Keith, but against Fennell. Of course, to make such defense good, it was necessary to show that Keith’s purchase was fraudulent; or, what is the same thing, that Fennell, by the transaction, attempted to delay, hinder or defraud his creditors, and that when Keith purchased, he knew such was his intention, or had information of suspicious circumstances, which ought to have led him to make inquiry; and that if he made such inquiry, and followed it up, it would have led to knowledge of Fennell’s fraudulent intent. The legal principles applicable to this question have been so often stated, that we deem it unnecessary to repeat them. — Crawford v. Kirksey, 55 Ala. 282; Hodges v. Coleman, 76 Ala. 103; Lehman v. Kelly, 68 Ala. 192; Levy v. Williams, 79 Ala. 171; Shealy v. Edwards, 75 Ala. 411; Leinkauff v. Frenkle, 80 Ala. 136; Hoyt v. Turner, 84 Ala. 523; 3 Brick. Dig. 678, § 10; Wait’s Fraud. Con., § 376.

The circumstances of the transaction brought to view in this case go very far to show that Fennell, in selling his merchandise, had the intent to defraud his creditors. So, the most important inquiry was, whether Keith, when he purchased, had notice or knowledge that such was his intention, or was cognizant of such suspicious circumstances as were calculated to put him on inquiry, which, if entered upon and followed up, would have led to a discovery of this fraudulent intent. If these constituent elements are shown to have co-existed, then, notwithstanding Keith may have promised and paid the full value of the merchandise, his title is worthless against the claims of Fennell’s creditors. No man should aid another in a dishonest effort to defraud his creditors; and any intentional assistance thus rendered is a legal wrong, which it would be a reproach to the law to say it could not redress.

But it is not every assistance rendered a failing debtor in defrauding his creditors, that the law condemns, or punishes. We live in a commercial age, and the right to sell is one of the attributes of property. It is only when this inherent right is perverted to unlawful or dishonest uses and purposes, that it deserves condemnation; and only when it is knowingly assisted, or assisted under circumstances which render ignorance of the evil intent wicked or culpable, that the law lays its chastising hand on the accomplice, or helper. To do more than this, would greatly embarrass that free commerce, which our institutions and the age we live in have done so much to encourage and promote.

Such questions as we deem it necessary to notice we will now consider in detail.

We do not consider there is anything in the motion made to quash the panel from which the struck jury was to be selected. — Harrington v. State, 83 Ala. 9.

J. P. Stewart, a witness for plaintiff, was asked, “What was Pennell’s commercial standing during the time he [witness] was with him?” This question was objected to on several grounds, and among them, “because no proper predicate was laid for asking the witness such question.” The objection was overruled, and the witness answered, “It was good.” The ruling on question and answer was, as to each, excepted to. This witness was a salesman in the store when each of the sales was made. There was no proof offered, save the fact that the witness was such salesman, tending to show he had knowledge of Pennell’s commercial standing, and he was not interrogated as to such knowledge.

"We do not think a sufficient predicate was laid for letting in the testimony. It could not, from the facts shown, be assumed as matter of law that the witness was sufficiently acquainted with Pennell’s business standing to express his judgment or opinion upon it. He stated that he had never examined the books. The court erred in admitting this testimony. — Pollock v. Gantt, 69 Ala. 373; Wood v. Brewer, 57 Ala. 515; Baucum v. George, 65 Ala. 259.

This testimony was material on the single, yet very important inquiry, whether Keith, when he purchased from Fennell, had, or was chargeable with having, notice that the latter was in failing circumstances, or contemplated defrauding his creditors. As testimony tending to prove notice, it is only general reputation, or recognized commercial standing, which can be made the basis of evidential opinion. To give such opinion, the witness must have knowledge of the commercial standing of the person about whom he testifies.

The credibility of parol testimony is a pure question of fact, for the trying body to determine. The intelligence of the witness, his manner in testifying, the consistency, probability or improbability of his narrative, all enter into, and make up the probative force of his testimony. And, when known, the character of the witness becomes a factor in producing, or failing to produce conviction. Pew, if any, have had so little contact with the world, as .not to be able to recall instances in which a simple narration carried with it unquestioning conviction, while, in other instances, such narrations utterly failed to convince the mind of their truth. Yet it would be difficult, if not impossible, to define why one statement produced conviction, and the other failed. So with parol testimony. So many influences, agencies, and considerations enter into the inquiry, that the law can assert no rule in regard to its credibility. It declares rules for aiding juries in weighing, but never weighs parol testimony. In 1 Green! Ev. § 10, note a, it is said: “The question of the degree of credibility of an individual witness, or of all the testimony in the case, is wholly for them (the jury) to decide. Any instruction from the judge, by which such a question is put to the jury as a matter of law, is an infringement by the court of the peculiar province of the jury.”- — 1 Whart. Civ. Ev. (2d Ed.), § 417. The Circuit Court erred in charging the jury, that “the law presumes that the witnesses in their statements under oath speak the truth.” The law raises no presumption, either one way or the other.

We are aware that in Rowland v. Plummer, 50 Ala. 182-195, the doctrine was stated as it was charged by the trial judge in this case. We suppose he was influenced by that decision in the ruling he made. Five decisions of this court are cited in connection with the ruling of Rowland v. Plummer, but they do not bear on the question we are considering. We think the principle asserted unsound, unsupported by authority, and misleading. The case of Rowland v. Plummer is overruled.

The question second in importance in this case is the measure of damages. ' Defendants in the court below, appellants here, contend, that even if there be a recovery against them, the measure should be not the value of the whole stock of goods, but only of the proportion which was sold and applied to the payment of their judgment. They rest this asserted right on the fact, that after the marshal acquired possession of the merchandise under their attachment, other creditors of Fennell had attachments placed on the stock of goods, and it was thus rendered impossible, by no fault of theirs, for them to restore to Keith the surplus of the goods, or their proceeds.

There is a principle, well recognized and eminently just, that if, after goods or chattels are tortiously taken, they are restored, in whole or in part, to the rightful owner, or are applied, under legal proceedings, to the payment of his debts, such fact or facts may be invoked in mitigation of damages. — 6 Wait’s Ac. & Def. 114, and authorities cited; Kelly v. Shed, 10 Met. 317. That principle has no application to this case. The present action, if maintainable at ‘ all, must be supported on the ground that the goods were not Fennell’s, but Keith’s. If Keith’s goods were improperly seized, to pay a debt which Fennell owed, it can be no defense for the wrongful captor, that part of the goods so taken were subsequently applied wrongfully to the payment of Pennell’s other debts. If A be sued for taking the goods of B, it is no defense for A, that C subsequently took and carried them away from him. ( The marshal’s right to enter and take the goods, depended on their ownership. If the sale to Keith was fraudulent, no wrong was done to Keith, and he can not maintain -this action. If the sale was valid, then the seizure was a naked trespass. — Pollak v. Searcy, 84 Ala. 259; Murfree Sher. § 976; 2 Sedg. Dam. 444; Hopple v. Higbee, 23 N. J. Law, 342; Fairchild v. Case, 24 Wend. 381. Stix & Co., if liable at all, are liable for the whole damages.. If they have any recourse, it is against the other attaching creditors, who shared in the proceeds. Curtis v. Ward, 20 Conn. 204.

Keith, when examined as a witness, testified that, while negotiating with Pennell for the purchase of the first half interest in the merchandise, the latter, Pennell, informed him that he owed but little, which he could pay at any time, and that he offered to let him examine his books, which he said showed the amounts he owed, and the amounts due him. Keith did not examine the books, and testified that he felt no interest in their contents; that he knew Pennell, and had confidence in him, and did not think or care any thing about the question of Pennell’s debts; did not, when testifying, know whether the books showed what Pennell owed; and there was no testimony as to what the books did show. They were not put in evidence. It. will be remembered, that Keith in his purchases acquired no interest in Pennell’s bills receivable, and did not assume his debts. Many charges were asked and refused, asserting that what took place, stated last above, was sufficient to put Keith on inquiry; and if he had examined the books, he would have ascertained Pennell’s insolvent or embarrassed condition, and, as a consequence, would have learned that Pennell’s intention in selling was to delay, hinder and defraud his creditors. On this principle, defendants claimed the verdict should be for them.

Forming a partnership with Fennell in an existing business, as Keith by his first purchase did, it may present a subject of comment and criticism, that the latter should have felt no interest in its extent and profitableness. Against this may be weighed Fennell’s commercial standing, if known and good, and Keith’s confidence in him, if it existed. There may also be other attendant facts' and circumstances, pro and eon, which can be urged before a jury, but on which it is neither our province nor wish to dwell. . These are all pure questions of fact for the jury to consider and weigh, without any intimation from us of their weight or significance. This conduct of Fennell, if correctly testified to by Keith, was not calculated to awaken suspicion, and we can not affirm that, as matter of law, they cast on Keith the duty of examining the books; and hence they do not necessarily raise against him the legal implication that he had notice of the facts, the discovery of which such examination would have led to. — Wade on Notice, § 23. Nor is it shown that an examination of the books would have disclosed the amount of Fennell’s indebtedness. All charges raising this question were rightly refused. We do not say, however, that Keith’s failure to examine the books was not a circumstance counsel could comment on, and the jury should weigh in connection with the other evidence.

Many of the charges given or refused, and excepted to, were correctly ruled under the doctrine declared above. Others are, in some of their features, abstract and misleading, and some of them draw too broad a conclusion from their premises. Charge 18 asked by defendants is of the latter class. That charge, if its premises were found by the jury, might vitiate the title to the moiety of the merchandise last purchased. It could not, in the nature of things, be made to apply to the first purchase. The fact that Fennell and Keith were partners from the 19th of December to the 9th of January, is a circumstance for the jury to consider in determining whether the latter had learned Fennell’s insolvent or failing condition before he made the second purchase. If he had, and purchasing as he did for money, the law would not uphold such purchase. — Lehman v. Kelly, 68 Ala. 192; Leinkauff v. Krenkle, 80 Ala. 136; Levy v. Williams, 79 Ala. 171; Strong v. Hinds, 35 Miss. 201.

Charge 13 asked by defendants ought to have been given.

There was no other charge refused that is not obnoxious to some one or more of the objections noted above.

Reversed and remanded.