Case Name: American National Bank vs. Viterbo & Bros.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1894-07
Citations: 46 La. Ann. 1313
Docket Number: No. 1475
Parties: American National Bank vs. Viterbo & Bros.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 46
Pages: 1313–1316

Head Matter:
No. 1475.
American National Bank vs. Viterbo & Bros.
'Two acts of sales declares simulated and fraudulent, in view of the testimony as to the relations of parties, the small means of the purchasers relatively to the value of the things purchased, the simultaneous passing by the vendors of a series of acts by which they transferred all of their property to third persons, the suddenness of the propositions to sell, the celerity with which terms of sale were fixed and sales made, the active interest in the affairs of the vendees manifested by the vendors after the sales, and the correspondence of after occurring events with prior announced intentions by the vendors.
APPEAL from the Seventeenth Judicial District Court, Parish of Calcasieu. Fournet, J.
The present suit was instituted against the commercial firm of L. Viterbo & Bros., doing business in Calcasieu parish, upon their promissory note for five thousand dollars, dated November 2, 1893, payable to the order of John A. Hubbard, endorsed by Hubbard in blank and discounted by the plaintiff. With the main demand was coupled a prayer for a writ of attachment of defendants’ property, the application for which was based upon ¿negations that plaintiffs verily believed that defendants were about leaving the State permanently without there being a possibility, in the ordinary course of ordinary proceedings, of obtaining or executing judgment against them previous to departure, or that they have left the State permanently, or that they concealed themselves to avoid being cited or forced to answer in this suit, or that they have mortgaged, assigned or disposed of, or are about to mortgage, assign or dispose of their property, rights or credits with intent to defraud their creditors, or to give an unfair preference to some of them, or 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.
The order was granted, and acting under it the sheriff seized a stock of goods in a store in the town of Jennings: certain mules, horses, agricultural implements and seed rice on a farm which had been leased and cultivated by defendants. The merchandise attached was appraised at three thousand two hundred and sixty-two dollars, and the farming implements, mules, etc., at six thousand four hundred and seventy-eight dollars. The writ was executed on February 3, 1894. On February 19, U. R. Gassin and W. D. Reeves intervened in the suit, the former claiming ownership by purchase from defendants of the stock of goods, and the latter of the property seized upon the farm, also by purchase from defendants. Defendants moved to dissolve the attachment on various grounds. The motion was overruled and the defendants answered, praying for trial by jury, and the prayer being granted the issues raised in the ease were subsequently so tried. The property claimed by intervention was delivered to the claimants on forthcoming bonds.
Plaintiffs answered the interventions, charging simulation and fraud in the alleged purchases of the property. On the trial the jury rendered a verdict in favor of the plaintiffs against the defendants and in favor of the plaintiffs against the intervenor Gassin, but in favor of the intervenor Reeves against the plaintiffs. The plaintiffs appealed from the judgment in favor of Reeves. Gassin appealed from the judgment against him on his intervention. The defendants did not appeal.
A. P. Pujol and W. B. Spencer Attorneys for Plaintiff, Appellant.
Moise & Gahn and W- F. Schwing Attorneys for Intervenors, Gas-sin, Appellant, and Reeves, Appellee.

Opinion:
The opinion of the court was delivered by
Nicholls, O. J.
The law governing the case is simple, and the attention and efforts of counsel of the different parties have been principally directed to the facts.
Viterbo & Bros., the defendants, were largely engaged in the rice business — partly as planters, partly as purchasers, and partly in connection with the house of John A. Hubbard, a large rice dealer in the city of New Orleans. Their relations with Hubbard were such that financial ruin to him meant ruin to them. Their close intercourse with this firm brought them to a knowledge in advance of the general public that it was on the eve of failure, and they at at once set to work to prepare themselves against the coming storm. They accordingly, by a series of transactions closely following each other in date, and just prior to the announced failure of Hubbard which followed, transferred all their property to different parties under acts purporting to be acts of sale. The transferees were all intimate friends of, and one of them a connection, by marriage, with the vendors. Gassin had been the overseer of the Viterbos for several years, and Reeves was the father-in-law of one of the partners. Both of these vendees claim to have been utterly ignorant and unsuspicious of any good reason why the defendants, who, according to the theory of the cases of the two intervenors, were in well-to-do, prosperous circumstances, should so suddenly and in the course of so short a time dispose of paying investments and valuable properties; and both seem to have come to terms of sale with a celerity not usual to men with the small means, which the testimony indicates them to have had, and with a confidence as to the precise objects bought existing at the moment of the sales, and the value of the same, rarely found in ordinary business transactions.
In the brief of the intervenors it is said, "While it is clear that Viterbo &Bros. were perpetrating a legal fraud upon their creditors, still their intent, purpose, motive, and the fraudulent act are not binding upon either Gassin or Reeves, unless they were cognizant of or parties to it." We think the evidence in the case brings it, as against Gassia and Reeves, within this stated requirement. We are satisfied those parties were aware of what the defendants were attempting to do, and gave them their aid and assistance to effect that purpose. We are of the opinion that the two acts of sale are pure simulations.
Leon Viterbo announced to one of the witnesses several days before the acts were passed that he intended to do precisely what was done afterward, naming to him the very parties, but expressing some want of confidence as to whether Reeves was reliable and could be trusted.
The connection of Gassin with the pretended sale of the rice to him by Viterbo & Bros., which was disposed of by Ernst & Co., and his ignorance of what transpired subsequently to his pretended purchases, with respect to the things purchased, unmistakably show the want of reality in this whole transaction with him, and his thorough knowlege of the whole situation of the parties. We think it would serve no good purpose to go into details of testimony to show upon what our conclusions in this case rest. The relations of the parties to each other; the small means of the purchasers relatively to the value of the things purchased; the suddenness of the proposition to sell and the celerity with which terms were fixed and sales made; the continued active interest by the vendors in the affairs of the vendees after the sales, and the correspondence of after occurring events with prior announced facts, are salient features of the case. We may say, also, that we are satisfied that Reeves was perfectly well informed as to the pretended sale made to Gassin simultaneously with that made to himself, and that it is impossible for him to have been in good faith in the premises, and we have no idea he would have been willing to have really risked a dollar of his own under the circumstances.
The jury drew a correct conclusion in respect to the purported sale to Gassin, but it erred in sustaining the sale to Reeves. We do not see on what ground they drew a distinction between the two cases.
Por the reasons herein assigned it is hereby ordered, adjudged and decreed that the verdict of the jury, in so far as it was in favor of the intervenor, W. D. Reeves, be and the same is hereby set aside, as is that portion of the judgment based thereon, and it is now ordered that the demand in intervention of W. D. Reeves be and the same is hereby dismissed and rejected at his costs.
It is further ordered, adjudged and decreed that the judgment of the lower court dissolving the attachment sued on and executed against the property claimed by W. D. Reeves in the said intervention be and the same is hereby annulled, avoided and reversed, and the said attachment reinstated upon said property, and the said property be sold in due course of law to satisfy the judgment.
It is further'ordered that the judgment appealed from be otherwise affirmed, costs of appeal to be borne by W. D. Reeves and U. R. Gassin.