Court Opinion

ID: 8304621
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:26:30.249582+00
Date Added: 2024-06-11T16:44:29.114304
License: Public Domain

ON Rehearing
SWEPSTON, J.
A petition to rehear is filed by the Third National Bank with respect to our holding that it would have to share pro rata with other creditors including the purchasers of the stock of automobiles and in remanding the cause for a reference.
The two points raised are (1) that we failed to give effect to the replevy bond given by Perryman and Hamilton by which the attached property was released to them and that we should have entered judgment on the *102bond for tbe full amount of tbe debt, interest and costs under tbe terms of tbe bond, and (2) that we did not order judgment against tbe sureties on tbe replevy bond.
Complainant in its original brief contended that it was entitled to a judgment on tbe replevy bond for tbe full amount of tbe judgment against Keatbley, but owing to tbe fact that no authority was cited on tbe question and no attempt made to rationalize tbis contention in tbe light of tbe pro rata rule and tbe further fact that defendants omitted discussion of tbe point, we failed to examine tbe question, but are quite agreeable to doing so now.
Tbe language of tbe bond is:
“We, H. T. Hamilton and J. T. Perryman, principals, and A. E. Keatbley and Allie May Keatbley, J. B. Meek, Jr., Mrs. Josie Hamilton, Eoy Perryman and Edna P. Perryman, sureties, acknowledge ourselves indebted to tbe Third National Bank in Nashville of Nashville, Tennessee, in tbe sum of Fourteen Thousand ($14,000.00) Dollars. But if, in tbe event tbe said H. T. Hamilton and/or J. T. Perryman are cast in tbe suit with tbe said Tbe Third National Bank in Nashville, of Nashville, Tennessee in tbe Chancery Court at Union City, wherein tbe property of tbe said H. T. Hamilton and/or J. T. Perryman has been attached, and which property consists of tbe following described automobiles: 1937 Dodge Pickup, 1941 Ford Tudor, 1939 Buick Sedan, 1941 Chevrolet Sedan, 1938 Chevrolet Sedan; 1940 Chevrolet Sedan, 1941 Ford Sedan, 1940 Chevrolet Sedan, 1937 Ford Pickup, 1937 Dodge Pickup, 1940 Dodge Truck, 1941 GMC.
We, tbe said H. T. Hamilton and/or J. T. Perryman shall pay tbe debt, interest and cost sued for, then tbis bond, which is given to replevy said property is to become void”.
*103This bond was given under Code Section 9460-9466. Section 9460 reads: “The defendant in an attachment suit may replevy the real or personal property attached by giving bond, with good security, payable to the plaintiff, in double the amount of the plaintiff’s demand, or, at defendant’s option, in double the value of the property attached, conditioned to pay the debt, interest, and costs, or the value of the property attached, with interest, as the case may be, in the event he shall be cast in the suit”.
This bond does not conform to the statute in either alternative allowed the defendant by the above statute, because the penalty is not in double the amount of the plaintiff’s claim, nor is the value of the property stated in the bond. It is nevertheless enforceable so as to give the plaintiff all the remedies to which he would have been entitled as if the bond had been executed in strict conformity to the statute against both principals and sureties. Ward v. Kent, 74 Tenn. 128; Sadler v. Murphy, 18 Tenn. App. 340, 77 S. W. (2d) 70; Code Sections 9463, 1836 and 1837.
And the bond will at the same time be construed as favorably to the sureties as the language under the above rules permit. Fleshman v. Trollinger, 163 Tenn. 157, 40 S. W. (2d) 1029.
This bond is plainly conditioned to pay the debt, interest and costs and if this amount is within the penalty of the bond, no question arises on that score.
The question is whether the pro rata rule is applicable to require the entry of a judgment on the replevy bond in any form other than is prescribed by the attachment and replevy statutes'?
We find no cases on the specific question where the Bulk Sales Law is involved.
*104 If the property fraudulently conveyed has been disposed of or so concealed or commingled with other property by the grantee that it cannot be reached or identified, he may be subjected to personal liability in favor of seller’s creditors for the value of same pro rata. Solinsky v. Lincoln Sav. Bk., 85 Tenn. 368, 4 S. W. 836; Daly v. Sumpter Drug Co., 127 Tenn. 412, 155 S. W. 167; Mahoney-Jones Co. v. Sams Bros., 128 Tenn. 207, 159 S. W. 1094.
If the property is available, it may be attached and all creditors will, as above, share pro rata. Fecheimer-Keifer Co. v. Burton, 128 Tenn. 682, 164 S. W. 1179, 51 L. R. A., N. S., 343.
In neither instance is the attaching creditor entitled to preference or priority over creditors who do not attach, Middle Tenn. Mills v. Rocky River Coal & Lbr. Co., 177 Tenn. 31, 145 S. W. (2d) 787, although the attaching creditor may be allowed reimbursement from the common fund for his costs and expenses in prosecuting the suit. Rains v. Rainey, 30 Tenn. 261, 264; Marr v. Bank, 44 Tenn. 471, 484; Shea v. Mabry, 69 Tenn. 319, 344; Puckett v. Richardson, 74 Tenn. 49, 63.
As already said, there seems to be no ease decided since the enactment of the Bulk Sales Law in 1901, where the attached property was replevied, as distinguished from a replevin action’as in Neas v. Borche, 109 Tenn. 398, 402, 71 S. W. 50, but there are several older cases involving fraudulent conveyances of a stock of merchandise or other personalty where the property was attached but released on a reply bond to the fraudulent grantee, in which cases the following rule was applied:
The replevy bond, as distinguished from a replevin bond, is a substitute for the property attached, in the way of personal security, and releases it from the *105lien of the attachment, and leaves it subject to he levied on, under other attachments or executions, though it was originally attached upon the ground of a fraudulent conveyance and was replevied by the fraudulent purchaser. Jacobi v. Schloss, 47 Tenn. 385; Barry v. Frayser, 57 Tenn. 206, 217; Frankle v. Douglas, 69 Tenn. 476.
In those cases judgment was entered against the principal and sureties on the replevy bond in accordance with" the statute Code Sections 9465 and 9487 either for the debt, interest and costs or for the value of the property, according to the condition of the bond as made by the grantee under Section 9460.
It is obvious from the statute, from these cases and those cited in the forepart hereof, and from the following cases that the Court is not empowered to enter any other form of judgment on the bond than the two forms alternately provided by the statute and as called for by the contract expressed in the bond.
The obligors on a replevy bond are hound to surrender the property and cannot set up a lien in their favor or title in themselves or soine third party to defeat their obligation under the bond. Central Trust Co. v. Evans, 6 Cir., 73 F. 562, 19 C. C. A. 563, citing Cheatham v. Galloway, 54 Tenn. 678; Stephens v. Greene County Iron Co., 58 Tenn. 71; Smyth v. Barbee, 77 Tenn. 173.
Since conveyances in violation of the Bulk Sales Law are but another form of fraudulent conveyances, the foregoing principles must be controlling in the instant suit.
The net result is that the defendants Perryman and Hamilton, having elected to replevy the attached property on giving bond with sureties conditioned to pay the judgment, interest and costs, have substituted their personal liability for the property and are subject to judgment accordingly and they cannot set up as a defense *106the fact that if they had not given bond, they would have been entitled to claim their pro rata in the property attached.
We are therefore of opinion that we were in error in not entering judgment on the replevy bond for the full amount of the judgment, interest and costs adjudged ^against Keathley, but within the penalty of the bond. Necessarily the judgment would go against the sureties as well as against the principals.
The original opinion and decree is modified accordingly and the order remanding the cause and ordering a reference is recalled.
Decree in this Court in accordance with the foregoing.
Anderson, P. J., and Baptist, J., concur.
On Petition for Instructions
SWEPSTON, J.
Counsel for the judgment creditor in this case and the Clerk of the Court of Appeals have requested the opinion of the Court as to when execution is properly issuable.
Counsel have called attention to the inconsistency between Code Sections 8867 and 10627 and to the change in the language of 8867 wrought by the 1950 Code Supplement enacted by the 1951 General Assembly.
Section 8867 authorizes and directs the Clerk of the Supreme Court and the Court of Appeals to issue execution, etc. after the expiration of the ten days allowed for filing a petition to rehear after final judgment rendered.
Section 10627 provides for execution after thirty days after final decree as defined in the act creating the Court of Appeals, chapter 100, Acts 1925.
*107The 1950 supplement deletes the Clerk of the Court of Appeals from Section 8867, making it apply only to the Clerk of the Supreme Court.
Since by Section 26.1 of the 1950 Supplement its provisions do not become effective until January 1, 1952, it has no direct effectiveness until that date, although it may he indicative of the proper answer now.
Thus the rule remains as heretofore. "What then is the correct rule — 10 days or 30 days ?
Before the enactment of the 1932 Code it was held in two cases that the correct rule is 30 days. Red Top Cab Co. v. Garside, 1927, 155 Tenn. 614, 298 S. W. 263; Scales v. James, 1928, 9 Tenn. App. 306.
In neither of these cases was reference made to the inconsistency between Code Section 4773al, which now appears in the 1932 Code as 8867, and the Act creating the Court of Appeals; obviously, it was not necessary, because the later irreconcilably inconsistent statute effected a repeal by implication of that part of the Shannon’s Code section, on well known principles.
Yet the inclusion by the 1932 Code of the Clerk of the Court of Appeals in the language of Section 8867 now raises the question.
Section 8867 of the present Code is taken without substantial change from chapter 58, Acts 1903; Section 10627 was taken without substantial change from chapter 100, Acts 1925.
The rule under such circumstances is that the Code embodied these Acts as they had been previously construed. Memphis and Shelby County Bar Ass’n v. Himmelstein, 165 Tenn. 102, 103, 53 S. W. (2d) 378.
*108 We conclude therefore, that execution or other final process may not properly issue on a judgment or decree of this Court until the lapse of 30 days after final disposition, including action on the petition to rehear, as in Scales v. James, supra.
Anderson, P. J., and Baptist, J., concur.