Bailey v. Johnson , 9 Colo. 365 ( 1886 )

Beck, C. J.

The principal error assigned relates to the withdrawal of the case from the consideration of the jury, when upon the trial on the merits in the superior court, by an instruction to return a verdict for the defendants. It is inferable from this action that, in the judgment of fihe court, the plaintiffs, Bailey & Allen, had failed to establish a legal ownership or right of possession of the property described in this writ of replevin. The ground of the motion was that the requirements of the statute of frauds had not been complied with in the sale and delivery of the property to the plaintiffs. It was not claimed that the transaction was fraudulent in fact, but that immediate delivery of possession not having been made upon execution of the bill of sale, as required by the statute, the law presumed the transaction to be fraudulent and void.

The statutory provisions referred to, being the fourteenth section of the statute of frauds, are as follows:

“Every sale made by a vendor of goods and chattels in his possession or under his control, and every assignment of goods and chattels, unless the same be accompanied by an immediate delivery, and be followed by an actual and continued change of possession of the things sold or assigned, shall be presumed to be fraudulent and void as against the creditors of the vendor, or the creditors of the person making such assignment, or subsequent purchasers in good faith; and this presumption shall be conclusive.” Gen. St. 1523.

Addressing our attention to the question of the sufficiency of the delivery and change of possession, it is proper, in the first instance, to consider the nature of the transaction, as the same appears from the testimony of both parties. While the form of the transaction was a sale to Bailey & Allen, the testimony clearly shows it to have been a transfer of the property to them, in the nature of an assignment, charged with certain trusts. The trusts were that the property should be sold by Bailey & Allen, to whom it was transferred by bill of sale, and that the proceéds of sale should be appropriated to the payment of the following debts of the vendor or assignor, viz.: The debt due Bailey & Allen, the debts due the teamsters and workmen, and the debts due the foreman and book-keeper. It would seem, from the testimony, .that the property was in fact taken in liquidation of the claim of the plaintiffs, and that the claims of the teamsters and laborers would also have been paid at the time of the transfer if the amounts due them had been then known. But the plaintiffs were not bound, by 'their agreement with Kemp, to pay Morrell and Adgate any definite sum. These men appear to have been deferred creditors in the transaction, and were to receive, as per their acceptance, whatever balance there might be of the proceeds of sale to be made by plaintiffs over and above the amounts due the other creditors mentioned.

In support of the proposition that there was not a sufficient delivery of the property, nor such a continued change of possession as the statute requires, we are referred to that portion of -the testimony which discloses that Kemp’s employees held bills of sale of the property, and that the stock, as counsel allege, was in their possession when it was seized in attachment by the defendant. A review of the testimony fails to show any delivery whatever of the property by Kemp to his employees, as purchasers,-under the bills of sale, or that the latter had ever demanded a delivery. The employees do not appear to have claimed as purchasers, nor to have construed their bills of sale as evidence of purchase, but as liens. held to secure payment of the wages due them, respect- ■ ively. The delivery, therefore, to Allen at the camp was good as to all the parties present and consenting to it, and he and his partner took the property charged with the several trust specified.

Had the sheriff arrived in camp that day, and executed his writ of attachment while the animals and other property remained on the grounds, and' in the stables and corrals of Mr. Kemp, the case would have presented a very different feature. But no levy of the writ was made until some time next morning, when the stock was en route tor Denver, and distant about five miles from camp. Both the title and the possession were then in the plaintiffs. Their agent, Adgate, in obedience to-written instructions from Allen, had placed these men, who held time-checks from Kemp, in charge of the property for a special purpose, — ■ that of removing it to the stables of the plaintiffs in Denver. Having accepted the charge, they became, for the purpose mentioned, the agents of the plaintiffs. The property was therefore legally in the possession of the plaintiffs at the time of the levy of defendant’s writ. The requirements of the statute in question were, in our judgment, duly satisfied. On the day previous to the seizure Kemp had these goods and chattels in his possession and under his control. While so possessed of them, he conveyed the title, and'surrendered the possession thereof, to the plaintiffs, for lawful purposes, and for a sufficient consideration. The plaintiffs, through their agents, had assumed tire full dominion and control of the property. The formal delivery at the camp became, as to all persons, a valid delivery by the removal of the property from the premises of the former owner by those who constituted themselves agents of the plaintiffs for that purpose. There was nothing in these circumstances to mislead the defendant, but much to put him on the inquiry as to the ownership of the property at the time of the seizure. The saw-mill had been shut down, and the lumber business discontinued several days before. The men and teams were not engaged in their usual employments. It would seem that these facts were known to the defendant, for he admitted upon the trial that he knew the teams were going away on that morning, and that he had arisen early, and followed and overtaken them.

But if we assign to the transaction its true legal character, that of a partial assignment for the benefit of creditors, it is equally supported by the evidence. It was a voluntary transfer by Kemp, the debtor, without compulsion of law, to Bailey & Allen, in trust to sell the same, and to apply the proceeds in payment of certain preferred creditors. And, as before stated, those interested in the property by virtue of liens stood by and consented to the transfer. That partial assignments of this nature are valid under our statute was decided by this court at the last December-term, in the case of Campbell v. Colorado Coal & Iron Co. ante, p. 60.

The court erred in withdrawing the case from the consideration of the jury upon the facts and the law, and in directing a verdict for the defendant in error, for which error the judgment is reversed and the cause remanded.

Reversed.