Case Name: Hirsch Lowenstein & Levi et al. vs. E. Fudickar et al.; Schmidt & Zeigler, Gravely & Miller, Yale & Bowling, In Liquidation, J. Grossman vs. J. Y. Covington et al. Ouachita National Bank and Merchants and Farmers Bank, Intervenors
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1891-06
Citations: 43 La. Ann. 886
Docket Number: No. 1239
Parties: Hirsch Lowenstein & Levi et al. vs. E. Fudickar et al. Schmidt & Zeigler, Gravely & Miller, Yale & Bowling, In Liquidation, J. Grossman vs. J. Y. Covington et al. Ouachita National Bank and Merchants and Farmers Bank, Intervenors.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 43
Pages: 886–894

Head Matter:
No. 1239.
Hirsch Lowenstein & Levi et al. vs. E. Fudickar et al. Schmidt & Zeigler, Gravely & Miller, Yale & Bowling, In Liquidation, J. Grossman vs. J. Y. Covington et al. Ouachita National Bank and Merchants and Farmers Bank, Intervenors.
ox Motion to Dismiss.
An order of appeal granted in general terms on the joint and several motions of plaintiffs and intervenors in open court, will not be vitiated on account of the failure of the judge to specify, in the concluding portion thereof, the amount of intervenors’ appeal bond. Intervenors having furnished bond in the amount fixed in the order of the court will sufiiee, notwithstanding the plaintiffs alone are mentioned.
On the Merits.
1. Notwithstanding a debtor illegally and fraudulently disposes of his goods to to the injury of his credtiors, they can not be reached and recovered unless the purchaser is shown to have participated in the fraudulent design.
2. A sale made to one not a creditor must be considered as one in the ordinary course of business, if made for an adequate consideration, paid m cash or its equivalent; and the fact that a portion of the purchase price was subsequently applied to the discharge of the vendor’s debt will not vitiate the sale as an onerous contract.
APPEAL from the Fifth District Court for the Parish of Ouachita Richardson, J.
D. M. Sholars for Plaintiffs and Appellants:
I. The property of the debtor is the common pledge of his creditors. C. O. 31$
2. Every act done by a debtor with the intent of depriving his creditor of tho eventual right he lias upon the property of such debtor, is illegal, and ought as respects such creditor ho avoided. C. C. 1969.
3. Not only contracts which dispose of property, hut all others which are made in fraud of creditors, and deprive them of their recourse to tho property of their debtor, come within the provisions of this section. C. C. 1989.
I. A sale of an entire stock of goods and store fixtures for one-third of its value by an embarrassed debtor, in order to be able to protect certain of bis indorsers, is a sale in fraud of tlie rights of bis creditors within the meaningof Article 1970, O. O.
5. Such a sale can not be said to have been made in the usual course of tho party’s business. * * And the purchaser can not invoke the protection provided in Article 1986, O. O. It is only contracts made in the usual course of the party’s business, such as the ordinary daily sales of a retail merchant, that are exempt from revocation under the provisions of this article. 16 An. 102.
6. Insolvency of the debtor and knowledge thereof by the party with whom he contracts, not the sole ground upon which contracts can be annulled for fraud upon the rights of creditors. 36A’n.8; 35 An. 885 ; 34 An. 995; 24 An. 217; 11L. 121; 16 L. 367, 1190; 6 An. 312; decision Second Circuit Court, 86-63.
7. If the circumstances attending the sale wore such as to induce a prudent man ‘to make further inquiry as to the insolvency of his vendor, knowledge on the part of the vendee will be presumed. 10 L. 370; 1 An. 13; 3 M. 561.
8. Positive proof of fraud and knowledge, as herein alleged, is difficult of direct proof, and for this reason great weight should be given to all the circumstances, and the relationship of the parties from which knowledge may he inferred. 2 11. 39; 4 L. 219.
9. If knowledge of the involved and embarrassed condition of the vendor is brought homo to the vendee, at any time when it is possible for the vendee to retrace his steps, at any time when it is not too late for the vendee to restore property which the vendor has undertaken to place beyond the reach of his creditors, and yet he refuses to do so, lie then becomes a party to the fraud. 11 It. 196.
10. When a sale is attacked and is met by a technical exception, an unwillingness to meet the issue thus disclosed, raises a presumption of fraud. 33 An. 1063.
II. The exclusion of certain testimony as being privileged under Article 2283, O. C., if intended to shield an attorney’s client, which is doubtful, should not have prevailed in this case. In matters of simulation and fraud, the widest latitude is allowed in the introduction of testimony, and particularly when, as in this ease, the attorney was practically a creditor of his client.
12.“ We must exercise the discretion confided to us by tho Code, and look through the apparent into tho real transactions of the parties which are covered by Imt a thin veil.” Rank of mobile vs. Harris, 6 An. 815.
Potts & Hudson and Boatner & Lamkin for Defendant and Appellee:
1. A surety is not a creditor. 11 An. 229; 2. An 498; 13 An. 525; 3 How. 510; 5R. 419.
2.' The securing an indorser, or surety, against eventual liability, by a transfer to him of collaterals, by the principal debtor, is not the giving in payment to a creditor, and is not forbidden by Article 2658, C. C.
8. To annul a sale, by the revocatory action, the plaintiff must prove three things: (1) Kraud on the part of the vendor; (2) Knowledge on the part of the vendee; O) Actual injury to creditors — the debtor’s insolvency. 33 An. 128; 31 An. L!)B; 26 An. 567; 34 An. 883.
1. If the vendee be without fraud, and buy for a fair price, without knowledge of the vendor’s insolvency, the sale should not be annulled. 34 An. 888; 26 An. 467; 31 An. 196; 9 La. 170.
5. The burden of proving- fraud rests upon him who alleges it. It is notpresumed, and must be proven. C. C.1818; 39 An. 574; 31 An. 810.
6. Where plaintiff places the defendant on the stand as a witness, and probes his conscience by questions touching the facts of the cause, he represents such defendant as eminently worthy of belief, and the testimony thus obtained is of the highest character. 26 An. 693 ; 26 An. 594; 10 An. 170.
7. Such testimony, like that formerly obtained by interrogatories on facts and articles, obtained from defendant by interrogatories propounded by plaintiff and answered in open court, should not be divided, but taken as a whole. 8 X. H. 109; 1 La. 158.
8. If the contract bo annulled, the purchaser should ho reimbursed the amount that lias proven an asset for the payment of tlio seller’s debts. C. C. 1982; 12 L. 268; 11 Rob. 190.
9. If made to one not a creditor for a fair price, in the usual course of business,' the sale will not be annulled, even though the purchaser knew of the insolvency. O. U. 1986; 24 An. 138; 7 An. 615; 12 L. 263; 19 L. 594

Opinion:
On Motion to Dismiss.
The opinion of the court was delivered by
Watkins, J.
In the lower court intervenors joined plaintiffs in the prosecution of their suit, a general judgment was rendered in favor of defendants, and plaintiffs and intervenors have appealed.
In this court plaintiffs seek to dismiss intervenors' appeal, (1) because there was no order of court fixing the amount of bond, and (2) because intervenors furnished no appeal bond.
The order of court is couched in general terms. It was granted in open court, on the motion of plaintiffs and intervenors respectively, and the respective appeals were made returnable to this court. It is true that the language employed by the judge a quo in the concluding part of the order is ' on the plaintiff's giving bond in the sum of fifty dollars for a divolutive appeal," without making any mention of the intervenors. That is a mere casus omissus, and is evidently the result of inadvertence. Mention is made of the plaintiffs and intervenors in the commencement, and the omission of intervenors in the conclusion of the order of appeal can not work the revocation of it in toto as to them, and leave it in propriore vigore as to plaintiffs.
At the time plaintiffs' motion to dismiss was filed, the transcript did not contain the appeal bond of intervenors, but it has been produced since and filed. The filing of the bond serves to show how the order of appeal was construed by the intervenors, and our opinion is that their interpretation of it was correct.
The motion is therefore dismissed.