Court Opinion

ID: 5564569
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:57:31.798051+00
Date Added: 2024-06-11T08:35:34.472747
License: Public Domain

*131
Judgment affirmed.

Attached are copies of the accounts and notes of petitioners, with affidavits verifying the petition. A restraining order was granted, and a temporary receiver appointed to take possession of the stock of merchandise and the money arising from the sale of it.
The defendants, Lee, Mrs. Lee and 8. Herrman, Bro. & Co., demurred on various grounds, and made answers from which the following appears: About five years ago Lee commenced business in Eastman, and during said time has been engaged in various enterprises, some conducted by himself and some with partners. In the fall of 1888 he entered into partnership with Mré. E. B. Milner, and under the firm name of J. W. Lee & Co. they conducted a mercantile business until about the first of January, 1890, when the partnership was dissolved, Lee retiring and selling his interest in the business to J. W. Taylor, with the agreement on the part of the purchasers, who assumed the name of Taylor & Milner, that they would pay all the obligations of the old firm, which defendants are informed were promptly paid. When Lee entered the partnership with Mrs. Milner he had a small capital in money, and did not owe a dollar to any man. On retiring from said business he. commenced business in his own name about January 15, 1890, buying a stock of goods for which he paid cash. He was then out of debt and owned his stock of goods so purchased. He continued to run the business thus commenced until the first or second of October, 1891, when he sold his stock of goods and fixtures to Herr-man, Bro. & Co. for $1,345.96 cash, which was paid to him at that time and was a fair price for the stock and fixtures sold, considering their condition, etc. The sale was not for the pimp ose of defrauding his creditors; nor did Herrman, Bro. & Co. know that such was his object, or that he was indebted to petitioners, or that the goods they were buying had not been paid for, or that it was his purpose to convert his visible assets into cash, or that in making the sale he was engaged in a fraudulent scheme, or that petitioners would be hurt thereby. The sale was not quietly and secretly accomplished, nor was the price paid less than the true cash value of thegoods, nor were they removed quietly as soon as the sale was consummated. The sale was made one day, stock taken and the store closed, and in the busiest part of the next day the goods were removed by Herrman, Bro. & Co. to their store where for several days they were kept separate and apart from the large stock of goods of Herrman, Bro. & Co., though since then they have been placed on the shelves and it would be impossible to identify them. Lee offered the goods to a number of different persons, making no secret of it; and he does not suppose there was a man in town, hardly, but knew of the trade, and that the stock was being taken for the purpose of closing the transaction. Herrman, Bro. & Co. had known him for many years. He went to them, as he did to several others, and offered to sell the entire stock, saying he desired to quit business. At first Herrman, Bro. & Co. did not want to purchase, and the sale was not accomplished until after considerable negotiation ; and inasmuch as there was considerable old stock on hand, they did not and could not pay him what he had paid for the goods. The purchase was in absolute good faith and without notice of the alleged indebtedness or fraudulent intention. Not all of the goods sold by petitioners to Lee were sold to Herrman, Bro. & Có.; on the contrary he sold, in the course of trade, large quantities of the goods purchased from petitioners; and it would be impossible to say how much of the purchases from petitioners were in the stock sold, or in what it consisted. Herrman, Bro. & Co. never recommended to Einstein’s Sons that they sell Lee on a credit, nor participated in any of the alleged frauds of Lee. Herrman, Bro. & Co. are solvent and amply able to respond in a suit at law to any demands which petitioners may have against them. At the time of the purchase by Lee of the realty from Leitch & Morgan he had not married. He married shortly afterwards, built the house and gave it to his wife for a home, causing the Amoskeag Lumber Co. to execute a deed to her, he having previously conveyed the land to that company to secure a debt for material with which to build the house. He fully paid the debt, and denies that he caused the deed to be made to his wife in order to place the property beyond the reach of his creditors and thus defraud them, but avers that he gave her the premises because of love and affection. He was not then indebted to petitioners or any other person or persons, and did not become indebted until long after this gift. The purchase price of the land bought of Peacock was only $15. On the first of January, 1890, he arranged for the payment of all the debts he then owed, as heretofore stated, iu the sale of his interest in the business of J. W. Lee & Co. The property aforesaid is all the property he has ever given to his wife, and was given to her when he was solvent, out of debt, and able to do so in law.
On November 14 the petitioners presented to the iudge two other petitions in which they alleged that on the 24th of October the temporary receiver had demanded of Lee the money ($1,300) which had been paid to him by Herrman, Bro. & Co.', and of Herrman, Bro. & Co. the stock of merchandise sold to them by him, both of which demands were refused; and that on the 2d of November he had again made the same demands, which were again refused. Wherefore they prayed for an order to show cause why the defendants named .should not be punished as for contempt of court. Iii answer to the rule nisi Lee swore that he was unable to make the surrender required in said order, “owing to the fact that the money arising from the sale of the stock of goods had been paid but upon bona fide debts prior to the filing of the bill by complainants, and not for the purpose of defrauding creditors, but simply to dischai’ge valid subsisting debts, and it is not in his power, custody or control.” Herrman, Bro. & Co. answered that it was impossible for them to turn over to the receiver the stock of goods referred to, because the goods so purchased of Lee remained to themselves in their store for several days during which time a good portion of them were sold, and having placed the remainder of them in stock with other goods and placing respondents’ trademark upon them, prior to the filing of the bill by complainants, it was impossible to distinguish them from other goods in stock, there being at that time a large stock of goods in their store consisting of general merchandise, among which were a great many goods similar to the stock purchased from Lee.
By consent the entire case made by the petition, demurrers, pleas, answers, attachment proceedings and affidavits, was heard and determined together. Evidence was introduced by both sides. Its nature and effect is indicated by the foregoing statement of the pleadings. The first head-note states the controlling facts.
DeLacy & Bishop, for plaintiffs.
Smith & Clements and Herrman & Coffee, for defendants.