Case Name: Dennistoun et al. v. Malard et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1847-01
Citations: 2 La. Ann. 14
Docket Number: 
Parties: Dennistoun et al. v. Malard et al.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 2
Pages: 14–16

Head Matter:
Dennistoun et al. v. Malard et al.
The privilege of the lessor is superior to that of the vendor, where the property sold has been delivered to the purchaser. Nor can the rights of the former he afflectod by a sale made by tho lessee to one of his creditors, and a fraudulent removal of the property, by an agent of the purchasor, from tho promises leased, for tho purpose of placing it beyond the landlord’s roach. C. C. 19G5, 1972, 1977, 3135, 3230.
Appeal from the Commercial Court of New Orleans, Watts, J.
II. II. for and intervenors.
1st. It was a giving in payment, nota sale, and thero was no real delivery. C. C. 2028, 2626.
2d. It was made when the seller, or rather the transferror, was insolvent. C. C, 1965, 1972.
3d. Such transfers, within a year .proceeding insolvency, are presumptive of fraud in both vendor and vendee, who must prove their good faith. Acts of 1840, p. 133, ss. 14,19. Hodge v. Morgan, 2 Mart. N. S. 61.
4th. Malard's continuing in possessson was proof presumptive of fraud. C. C. 1915, 2456. 5 Touh, no. 41. Pierce v. Curtis, 6 Mart. 418. Thibodeaux v. Thompson, 17 La. 359. '
The vendor’s privilege yields to the lessor’s, All the goods had been unpacked, and were not claimed within eight days thereafter. Civil Code, arts. 3196 3197, 3230.
Durel for appellant.
By art. 1977 of the Civil Code, “If tho parties with whom the debtor contracted,, be,in fraud as well as the debtor, ho shall not, in the annulling the contract, be entitled to restitution of the price or consideration he may have paid, except so much as he shall prove shall have inured to the benefit of tho creditors by adding .to the amount of property applicable to tho payment of their debts; but if the only consideration be a sum due from such debtor to the party with whom he contracted, then'the only restitution to be made is the placing the parties in the situation in which they were before the contract complained of was made.
By art. 1978, it is declared: uBut if such fraud consisted, merely in the endeavor to obtain a preference over other creditors, for the securing or payment of a just debt, under circumstances in which, by law, the ondeavor to obtain such preference is declared to be a constructive fraud, in such case tho party shall only lose the advantage endeavored to be secured by such .contract, and shall bo re-imbursed what he may have given nr paid, without interest, and shall restore all advantages he has received from the transaction.”
It is under these articles the plaintiff proceeds.
If Hunt Co. are, in the language of art. 1978, “only to lose the advantage endeavored to be secured by the contract” of sale; and if, in the language of art. 1977, “the only restitution to be made, is placing the parties in the situation in which they were before the contract complained of was made,” then Hunt tf Co. stand, as creditors of Malard, with tho vendor’s privilege upon all his goods, and upon all goods transferred by the act of sale of the 14th January, excepting a small quantity, which, being unsaleable, were sent to auction, and brought $124 14.
Plaintiffs’ privileges ns lessors upon the goods was lost by thtfiif, as tlioy did not, in accordance with art. 2679 of the Civile Code, seize tho objects subject to it, before they wore taken from the store, nor within fifteen days thereafter.
The judgment of the court below was based upon art. 1972 of tho Civil Code. By that art. it is doclared that, “ The judgment in this action, if maintained shall be that the contract be avoided as to its effect upon the complaining creditors, and that all the property in money, taken from tho original debtor’s estate by virtue thereof, or the value of such property to the amount of tho debt, be applied to the payment of the plaintiffs-” In this case, tho effects of the sale wero not injurious to tho complaining creditors, for Hunt Sy Co. obtained thereby only the advantage which the vendor’s privilege gave them, and would still give them, though the sale be anulled. That article must, moreover, be construed in connection with arts. 1973,1974, 1976, 1977, and 1978. Art. 1973 says, “No contract shall bo avoided by this action but such as are made in fraud of creditors, and such a3, if carried into execution, would havo the effect of defrauding them. If Hunt & Co. have tho vendor’s privilege upon the goods, and no other creditor has a superior or equal privilege, by carrying the contract into execution, Hunt Sy Co. gained no more than their privilege gave them, and its execution could defraud no one.
As to Brewster, it would seem impossible to sustain the judgment of the court below, if tho articles 1973, 1974, 1976, 1977, and 1978, are regarded as at all applicable to tho facts of the suit.
Greiner, on the same side.

Opinion:
The judgment of the court was pronounced bjr
Seidell, J.
The plaintiffs leased to Malard a shop in tho city, and while he was in possession, on tho 14th day of January, 1843, being in insolvent circumstances, ho executed to John Hunt & Co., who were his creditors, and represented by an agent at New Orleans, a notarial bill of salo of all his stock in trade, then on the leased premises. The items forming tho consideration of tho sale wore all antecedent debts. Malard,, however, remained in possession of the store for several weeks. Tho understanding between him and Hunt & Co. seems to have been, that he should continue tire business and account to Hunt & Co. for the proceeds of the sales, after applying small sums first for his family oxpenses and his small debts. Malard's sign was continued on tho outside of tho shop; but a sign was put up inside representing Malard as tho agent of Hunt Sy Co. Subsequently, and about the middle of February, Malard ceased to act in tho store, some dissatisfaction arising between him and Hunt ¿j- Co. who put there an agent appointed by themselves, Malard's sign still remaining and his clerks continuing to act there. A few days before the institution of this suit, between sunrise and breakfast time, Hunt & Co. carried off all the stock of goods-, and then the plaintiffs, who had never had any notice of the transfer to Hunt & Co., though Hunt & Co. appear to havo known that the rent was unpaid, obtained a sequestration; but the shop was found empty, and the goods could not be traced. Soon after, upon discovering the notarial sale, the plaintiffs, by a supplemental petition, made Hunt & Co. parties, charging the invalidity of the assignment as a fraudulent preference, and also charging a fraudulent combination between Malard and Hunt Sy Co. to deprive them of tho landlord's lien. Brewster, another creditor for a small amount for goods sold, intervened, and joined with tho plaintiffs in their suit to set aside the assignment. The court gave judgment in favor of the plaintiffs and intervenor; and the defendants, Hunt Sy Co., havo appealed.
Wo entirely agree with tho judge of the court below in the conclusions to which he camo, both that the assignment was a fraudulent preference by an insolvent debtor, and that there was besides a breach of good faith towards tho landlord, and a violation of his rights in the removal of the goods. We consider tho court below aa justified in the opinion, that the agent of Hunt Co. was aware that the lessors had not been jxaid, and that the object of the-removal was to defeat their lien. It is said that the lien was gone, because it was not exercised within the fifteen days by a levy on the property, and that the alleged lien of Hunt & Co., as vendors of the goods, must be preserved to them, even if the assignment be sot aside. It is not proved that this alleged lien of the vendor existed on the whole of the goods, por indeed, as the case is presented, would we be able to say whether it existed at all: for Hunt Sf Co. being a New York house, tliero is strong reason to infer that the sale to Malar cl was made there. But, however this may be, it is clear that the landlord's lien is superior to that of the vendor's, who has made a delivery; and it cannot be contended that Hunt Sf Co. could place themselves in a better position, by fraudulently removing the goods beyond the landlord's reach and frustrating his' search. To recognize such a doctrine would be to say, that a party could, by lxis own wrong, place a fair creditor in duriori casu. Three or four days after the removal, the sheriff was started in pursuit of the goods, and his return is as follows, to the wx'it by which he was commanded to seize them: "Rec'd, 2nd March, 1843. Nothing could bo found; all the within mentioned property having been removed to parts unknown either to plaintiffs or sheriff."
That Hunt & Co. did not tlxomselves do the acts complained of, is no defence, What was done, was done by their agent, in tho management of their business aixd the prosecution of their interests, and they are equally responsible for its legal consequences. They do not repudiate the assignment, but claim under it, and hold on to tho abstracted property.
It is contended that tho amount of the goods was not equal to the amount of the judgments rendered. Tho evidence on this point is conflicting, but wc aro not able to say that thex'O was xxxanifest ex'ror in the finding of the court bolow. Tho judge of tlxo Commercial Court, who heard tho witnesses, thought tho value was large enough to cover the complaining creditors; and the conduct of the defendants in secreting the property, and thus preventing a more accurate estimate of its value by impartial witnesses, gives a bad grace to their application in tho appellate court for a reduction. See Civil Code, arts. 1965, 1972, 1977, 3185, 3230. Judgment affirmed.