Wollner & Lowenstein v. Lehman, Durr & Co. , 85 Ala. 274 ( 1887 )

STONE, C. J.

Lehman, Durr & Co. sued out an attachment against Weil & Stern, which was levied on a stock of merchandise in the store-house in which the debtor firm had been, and. were doing a retail mercantile business. Wollner & Lowenstein made the statutory affidavit of claim, and gave tbe necessary bond, to inaugurate a trial of the right of property — a statutory action provided for in our judicial system. — Code of 1886, 3001 to 3012, inclusive. The property claimed was delivered to the claimants. An issue was made up as provided by law, the attaching creditors averring that the property was subject to their attachment, and the claimants taking issue on the averment. The burden of proof was on the plaintiffs in attachment. — Code, § 3007.

The question of the burden of proof, and the extent of it, has been many times before this court. Our ruling has been, that the plaintiff need only make a prima fade case; which he does, by proving that the goods were in the possession, and under the control of the defendant, at the time of the levy. The burden then shifts to the claimant to establish his right. — 3 Brick. Dig. 776, § 7; Loeb v. Manasses, 78 Ala. 555; Jones v. Franklin, 81 Ala. 161; Foster v. Goodwin, 82 Ala. 384. And the claimant, in defense of such action, can not set up outstanding title in a stranger, in which he has no interest, and with which he does not connect himself. —3 Brick. Dig. 776, §§ 5, 6, 9.

The bill of exceptions, after stating the case, and when it was tried, describes the real issue in the following language: “Issue being made up by the parties under the direction of the court, the question presented to the jury was, whether the purchase by Weil & Stern of the goods in controversy was made under such circumstances as authorized the claimants,” who were the vendors, “to rescind the trade, and reinvest themselves with the title.”

Wollner & Lowenstein were wholesale merchants, doing business in Mobile, and Weil & Stern were retail merchants, doing business in Benton, Lowndes county, Alabama. On September 9, 1886, Weil & Stern purchased from Wollner & Lowenstein, through their travelling salesman, a bill of goods of about six hundred dollars. The goods were purchased on time, and were shipped about September 18, afterwards. The ground on which Wollner & Lowenstein rested their right to interpose their claim was, that at the time their salesman made the sale, Weil & Stern were insolvent, or in failing circumstances; that they had, at the time of the purchase, no intention of paying for the goods, or no reasonable expectation of being able to do so; and that there was, on their part, an intentional concealment of these facts, or a fraudulent representation in reference to them. If these facts existed, under our decisions, Wollner & Lowenstein had the undoubted right to rescind as against Weil & Stern, and against any other person not a bona fide, purchaser from Weil & Stern without notice. — Loeb v. Flash, 65 Ala. 526; Spira v. Hornthal, 77 Ala. 137; Hornthal v. Schonfeld, 79 Ala. 107; Robinson v. Levi, 81 Ala. 134; LeGrand v. Eufaula Nat. Bank, Ib. 123.

Lehman, Durr & Co. are not purchasers, in any sense. They are only attaching creditors. Save as creditors at large, they can assert no rights or equities in or upon the-goods, which antedates the levy of their attachment, October 11, 1886. And when the claim was interposed in this case, October 12, they had acquired no new right or interest which would prevail over the right of Wollner & Lowenstein to reclaim the goods, if otherwise they had such right. The category necessary to the maintenance of Wollner & Lowenstein’s claim was, as we have seen, that when the goods were purchased, Weil & Stern were insolvent, or in failing circumstances ; that they either did not intend to pay for the goods, or had no reasonable expectation of being able to do so; and that there was, on the part of Weil & Stern, either a fraudulent concealment of, or a fraudulent representation in reference to one or more of the above facts. All these qualifying conditions were indispensable to Wollner & Lowenstein’s right of recovery. It is not enough that Weil & Stern were unable to pay all their debts. Insolvents may intend to pay, and often do pay debts they contract. There must have been, at the time of the purchase, either an intention not to pay, or no reasonable expectation of being able to pay, to constitute this second element in the claimants’ right of recovery. If, at the time, Weil & Stern intended to continue business, and expected, out of their collections and sales, to pay for the goods; then this indispensable element of the claimants’ right of recovery is wanting. On the other hand, if, when the order was placed, they had the intention of securing certain preferred creditors, or favorites, by a sale of their goods, or a large part of them, thus breaking up their assortment and their business standing and facilities, this would be such fraudulent intention not to pay, as would establish this second element of claimants’ case, unless they retained other sufficient means to meet their liabilities. And . if such was their intention, and they subsequently carried it out, then, unless they notified Wollner & Lowenstein’s salesman of this intention when they gave him the order, this would constitute the third element of claimants’ right of recovery. So, the most important inquiry in this case is, whether, at the time the order was given, Weil & Stern intended, and had reasonable expectation of being able, to pay foi'the goods; or, did they then intend to disable themselves, by transferring the goods in making preferences. On each of these necessary constituents of their right to recover, the burden was on the claimants. All these inquiries were and are questions for the jury under proper instructions, to be determined by the weight of the evidence.

It will have been noted in what has been said above that Weil & Stern’s intentions and business prospects, when they purchased the goods, must exert a controlling influence in the determination of this case. This opens a wide field of investigation, and the question of fraud being involved, their conduct, dealings and conversation about the time of the purchase, within a reasonable time before, and afterwards, until the levy of the attachment, are legitimate subjects of proof, with proper restrictions as to parties not being allowed to make testimony for themselves, and that matters foreign to their business shall not be received. — 2 Brick. Dig. 21,§§ 93, 100; Ib. 15,§§31, 82; 3 Ib. 430, §§ 346,347. A very material inquiry is the time when the purpose to convey to Steiner and Mrs. Kohn was formed.

If the claim affidavit and bond fix, as they should, the amount of goods claimed and delivered to claimant, that is conclusive, and can not be disproved. — Jemison v. Cozens, 3 Ala. 636; Braley v. Clark, 22 Ala. 361; Munter v. Leinkauff, 78 Ala. 546. The value, however, is one of the facts to be found by the jury, and evidence of that should always be received.' — Roswald & Stoll v. Hobbie & Teague, ante, 73.

The second and third exceptions may be considered together, as each contains an hypothesis of fact, of which there was then no testimony. Other objections might be stated. There is nothing in these exceptions.

The ruling in regard to the question put to Woolfolk, is so expressed as not to be intelligible. We suppose there is a mistake. It was certainly for the claimants to prove the amount of Weil & Stern’s indebtedness when they bought the goods in dispute, and the record states this witness answered the question.

Under the rules declared above, the trial court erred in ruling out all the testimony of indebtedness created, collections made, and- disposition of assets, by Weil & Stern, between their purchase from claimants, and the levy - of plaintiffs’ attachment.

It was not competent to prove in this trial, against plaintiffs, any of the transactions of Weil & Stern, after the levy of plaintiffs’ attachment. This disposes of exceptions 6 and 7.

There is nothing in exception 8. The question arose collaterally, and it was competent to speak of the notes, without their production. — Graham v. Lockhart, 8 Ala. 9; 3 Brick. Dig. 439, § 486.

The first charge given by the court, of its own motion, mistook the law. Whether or not the sale to Steiner was valid or invalid, was no part of the issue in this case. If valid, so as to cut off claimants’ claim, it would equally defeat plaintiffs’ right of recovery. Neither of the parties to this proceeding can succeed by showing outstanding title in a stranger, without connecting them sieves with such outstanding title. — Starnes v. Allen, 58 Ala. 316; 2 Brick. Dig. 480, § 67; 3 Brick. Dig. 776, §§ 5, 6.

The fourth charge given at the instance of the plaintiffs, should not have been given. The claimants were not required to prove any one of the essentials of their claim beyond doubt. We have frequently had occasion to consider and condemn similar charges. — Adams v. Thornton, 78 Ala. 489; Pollak v. Searcy, 84 Ala. 259.

The first charge asked by the claimants, was rightly refused. An intentional misrepresentation would be a fraudulent circumstance, to be weighed by the jury. If it was intentionally made, was calculated to deceive, and it did deceive and cause the sale, that would be a fraud, and would supply the third element in claimants’ right of recovery.

Charge 6 asked by claimants was correctly refused; first, because the completeness vel non of the sale to Steiner was immaterial in this case; and, second, because it ignored all the elements essential to claimants’ right to reclaim the goods.

The claim in this case was for several cases of shoes, each having a different case number marked on the box, and a majority of them unopened. It would seem that it was practicable to assess the separate values of the different cases, or a large part of them. — Southern Warehouse Co. v. Johnson, at present term, ante, 178, and citations.

The judgment-entry is informal, in setting out more than was necessary. It can be corrected on another trial. — Gray v. Raiborn, 53 Ala. 40; Langworthy v. Goodall, 76 Ala. 325.

[Reversed and remanded.