Case Name: Lehman, Abraham & Co. vs. McFarland & Dupré
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1883-05
Citations: 35 La. Ann. 624
Docket Number: No. 8817
Parties: Lehman, Abraham & Co. vs. McFarland & Dupré.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 35
Pages: 624–627

Head Matter:
No. 8817.
Lehman, Abraham & Co. vs. McFarland & Dupré.
In order to justify an attachment of his debtor’s property, under the provisions of paragraphs 4 and 5 of Art. 240 of the Code of Practice, the attaching creditor must prove that the sale or disposition which the debtor is about to make of his property is with the intention of defrauding his creditors, or of giving an undue preference to some of them.
Proof that tho debtor is offering his property for sale, in order to realize funds for the payment of all his debts and liabilities, accompanied by a declaration of such purpose to the attaching creditor himself, will not justify an attachment.
APPEAL from the Civil District Court for the Parish of Orleans. Houston, J.
Praughn, Bucle & Dinlcélspiél and JS. I). White for Plaintiffs and Appellants:
An attachment sued out on paragraphs 4 and 5 of Art. 240. C. P., should be maintained, when defendants, who are sued upon an undisputed debt, are on the eve of disposing of all their property, and are paying by preference certain of their creditors. 24 An. 258.
The denial by defendant, as a witness in his own behalf, that he intended to dispose of his property to defraud his creditors, and the proof being that although having in hand money sufficient to pay the claim—pressed to payment—but refusing and at the same time paying other creditors, is just cause for the issuance of the writ. 24 An. 128; 29 An. G35.
A payment made to one creditor, well knowing the inability to meet when due claims of other creditors, is a preference entitling other unpreferred creditors to the attachment. 29 An. 635.
Whilst a suit of this character is always deemed a harsh remedy and the laws relative to attachments strictly construed, yet under certain circumstances and conditions the writ to creditors is an absolute essential to protect them from loss; and when creditors have good reason to feel or believe themselves entitled to this remedy, the Courts will protect them iu the exercise of the same. Baldwin & Co. vs. Mumford & Co. (not yet reported).
Percy Roberts for Defendants and Appellees.

Opinion:
The opinion of the Court was delivered by
Poems, J.
On the 2d day of November, 1882, plaintiffs, as commission merchants, sold to the defendants, owners of a rice mill and dealers in rice in this City, a lot of rice for the sum of $2,878.05, payable in ten days. As the 12th day of November was a Sunday, the bill matured the next day; on which day demand of payment was made by plaintiffs, but without success, aud on the next day they brought suit on their bill, accompanied by attachment, which was executed on the defendants' rice mill and other property.
The grounds urged for their attachment were, substantially, that the defendants " have mortgaged, assigned or disposed of, or are about to mortgage, assign and dispose of t.lieir property, rights or credits or some part thereof, with intent to defraud their creditors or give an unfair preference to some of them, and that they have converted or are about to convert their property into money or evidences of debt, with intent to place it beyond the reach of their creditors, and that a writ of attachment is necessary to protect the rights of affiants' firm in the premises."
. The record contains no evidence in support of,plaintiffs' allegations, or shows any state of facts to justify the harsh remedy of attachment against these defendants; hence their motion for the dissolution of the same, on the alleged untruth of the averments on which it was issued, was properly maintained by the lower court.
The record shows that the defendant firm, owing to heavy losses sustained in speculations in rice, had become financially embarrassed and so badly crippled, that their business could not longer continue. The partners, therefore, concluded to sell their mill for the purpose of meeting their obligations, and this intention was at once commuuicated to their heaviest creditors, including the plaintiffs in this suit.
To the end of accomplishing their purpose, the defendants called on their largest 'creditors, to whom they exhibited a statement of their financial condition, asking for a few days' extension on their maturities so as to realize on the proposed sale. The extension was granted by all the large creditors with the exception of plaintiffs, who pressed their debtors for an immediate settlement of their claim, or for security, such as an endorsement or a lien or privilege on the defendants' mill. After vain and unsuccessful efforts to raise the needed funds or the security required by plaintiffs, the defendants declined to give the lien and privilege asked, unless plaintiffs agreed to accept said lien concurrently with the house of Bush & Levert, and the firm of Maxwell & Peale, the other heaviest creditors of the defendants. Without formally declining this proposition, plaintiffs instituted these proceedings.
The record not only fails to show any fraudulent design of the defendants, but it proves conclusively an honest, honorable and persistent intention on the part of these unfortunate debtors to make any sacrifice necessary to the payment of all their debts and liabilities.
Had they followed the suggestion made by plaintiffs, and had they given to the latter the lien or privilege which they demanded, their conduct would then have made them liable to attachment on the part of their other creditors.
The Court can have no concern with the use which the defendants made of the proceeds of the rice which they had bought from plaintiffs, or of other funds in their possession at the time that plaintiffs' bill matured.
The prohibition of the law only contemplates the sale, mortgaging or otherwise disposing of their property by debtors, with the intention of thereby defrauding their creditors. The proposed disposition of their property by these defendants was in the interest of their creditors, whom they proposed to place on a footing of equality and fairness, and hence, the attachment against them was absolutely unjustifiable. Hornsheim & Bro. vs. Levy, 32 An. 340; C. C. 1986; 9 An. 535, Feche vs. Barriere.
Judgment affirmed.