Pollock v. Simmons Bros. ( 1898 )

Terral, J.,

delivered the opinion of the court.

A. F. and B. L. Simmons, engaged as partners in the mercantile business at Booneville, and owning a stock of goods, wares, and merchandise of about $7,000 in value, and being largely indebted beyond their ability to pay, and being pressed by S. M. Barnett for a debt due him, as well as on one for which he was their security at the Tupelo National Bank, on October 15, 1895, sold their said stock of goods to S. M. Barnett at seventy-one cents on the dollar-of the cost price. In settlement of the purchase price of the said stock of merchandise, Barnett paid Simmons Bros. $840 cash, gave them an acquittance of a debt of $758.22 due to him, agreed to pay, and did pay before the bill was filed in this cause for Simmons Bros., to their creditors debts amounting to about $1,402.99, and for the remainder of the purchase price of said stock of goods Barnett executed to Simmons Bros, his two notes payable to them, one for $1,668.15, and one for $535; that said note for $535 was by Simmons Bros, delivered to Mrs. E. T. Dalton, in exchange of the note of said Simmons Bros, to Mrs. Dalton for a like amount of borrowed money; that the note for $1,668.15 represented a sum of money due Frank Simmons, a ward of said A. F. Simmons, which had been placed in the business of A. F. and B. L. Simmons (Simmons Bros.), with the understanding that it should constitute a joint or firm debt; that this $1,668.15 note was, on October 15, 1895, delivered by A. F. Simmons to S. P. Allen, his surety on his guardian bond of Frank Simmons; that Allen on the same day took out letters of guardianship of said Frank Simmons, the said A. F. Simmons resigning said office for that purpose, and said Allen immediately, and before the bill was filed in this case, took from Barnett a note for $1,668.15, payable to himself as guardian, in extinguishment of the note transferred to him by Simmons Bros. The $535 note, executed by Barnett to Simmons Bros., was by them, before the suit was brought in this case, transferred to Mrs. Dalton in place of their note to her, the consideration of which was borrowed money, of which Barnett had notice.

On the 28th day of October, 1895, Pollock & Bernheimer, creditors of said Simmons Bros, in the sum of $611.06, filed their bill in the chancery court against said A. F. and B. L. Simmons and said S. M. Barnett, to set aside a sale of the goods of said Pollock & Bernheimer to said Simmons Bros., on account of the sale thereof being made through false representations of the solvency of said Simmons Bros, to said Pollock & Bernheimer, and, also, to set aside the sale of the stock of goods, wares, and merchandise by Simmons Bros, to said S. M. Barnett, because it was alleged to have been made with intent to hinder, delay, and defraud said complainants in the collection of their debt, and asking that said stock of goods be subjected to their said claim. Subsequently the Swan-Abraham Hat Co., B. Lowenstein & Co., and other creditors of said Simmons Bros., in various considerable amounts, filed their petitions, uniting with Pollock & Bernheimer in their suit against said Simmons Bros, and against said S. M. Barnett, basing their several and respective causes of action upon the same grounds.

The facts, in part, are as hereinbefore recited, and it is maintained that the sale of the stock of goods by Simmons Bros, to Barnett is void as to their creditors, because the execution of the note of $1,668.15 by Barnett to Allen, and the holding of the $535 note by Mrs. Dalton, do not, at least ter the sum of said notes, constitute Barnett a bona fide purchaser for the value of said stock of goods. In other words, it is said that Barnett, in consequence of our anti-commercial statute, could defeat a recovery upon said notes if sued by Allen and Dalton thereon.

Allen and Dalton were creditors of Simmons Bros., and if Barnett had paid them in money there could be no cause of complaint at the transaction. That he gave his notes for the amounts does not affect the result. Allen and Dalton took the notes of Barnett, before they became due, in discharge of debts due them from Simmons Bros., and thereby received them discharged of all equities between Barnett and Simmons Bros, of which they had no knowledge. On the facts as they appear in the record, it cannot be that Barnett, if sued by Allen and Dalton, conld plead any failure of consideration or other defense to the notes held by them. These notes were given them in extinguishment of the notes of Simmons Bros., and they are bona fide holders for value. Emanuel v. White, 34 Miss., 56; 1 Dan. on Neg. Inst., sec. 832; Ethridge v. Gallagher, 55 Miss., 458. Mrs. Dalton and Allen severally had an equal equity with other creditors, and have, also, a legal right. They should not be deprived of their advantage.

There were other matters in the case which it was contended vitiated the assignment to Barnett, but the evidence in regard to them was so uncertain that it made no sufficient impression upon the mind of the chancellor, and we cannot say that he erred in his conclusion.

The decree of the court below is affirmed.