Benjamin & Co. v. Madden , 94 Va. 66 ( 1896 )

Biely, J.,

delivered the opinion of the court.

The retention of the possession of personal property by the vendor after an absolute sale is prima facie fraudulent as against creditors of the vendor; but such presumption may be rebutted by proof. Davis v. Turner, 4 Gratt. 422.

A different rule, however, seems to prevail in the case of a subsequent purchaser who has parted with his money in the acquisition of the specific property on the faith of the vendor’s possession and apparent ownership, without notice of the right of the first purchaser, whose conduct has enabled the vendor to make the subsequent sale. Davis v. Turner, supra; and Glasscock v. Batton, 6 Ran. 78.

The controversy in this case is between the vendee and an execution creditor of the vendor. At the trial, the parties waived a jury, and submitted the case upon an agreed statement of the facts to the decision of the court, which gave judgment in favor of the vendee.

The plaintiffs in error rely mainly for the reversal of the judgment of the Corporation Court upon the presumption of fraud, which the law infers from the retention by the vendor of the possession of personal property after its sale.

Michael Madden carried on the business of haberdasher at No. 210 Main street, in the city of Norfolk, for about two years prior to July 13¿ 1893. It is admitted by the agreement of facts that he sold and conveyed on that day his stock of goods to Mary E. Madden, and that she thereupon took possession of them. The admission, as facts in the case, of the sale and delivery of the goods into the possession of the vendee without any evidence or statement in the record of the restoration of their possession to the vendor, refutes the claim of a retention of the possession by the vendor, and removes that ground for the presumption of fraud.

It appears that the bill of sale, after being signed and acknowledged by the vendor, was recorded in the clerk’s office of the Corporation Court, and the agreed facts further admit that Mary E. Madden advertised in the Norfolk Landmark, a daily newspaper published in the city of Norfolk, from July 18 to July 25, 1893, that she had purchased from Michael Madden his stock of goods at No. 210 Main street, and would continue the business in her own name and on her own account;

The bill of sale, which was made a part of the agreement of facts, shows that the consideration paid by Mary E. Madden to Michael Madden for his stock of goods, fixtures, and furniture in the said store was $2,850, and that she assumed also the payment of a note for $500, which she had endorsed for him, and which he had b ad discounted in the Citizens Banlr for his own benefit.

The facts relied on by the plaintiffs in error to render the goods liable to the levy of their execution are that the license of the vendor was not transferred to the vendee prior to the levy of the execution; that the name of the vendor upon the window shades, which had constituted his only sign, remained as before; and that he and one Alex. Byrd, who had been employed by him as clerk for about a year prior .to the sale to Mary E. Madden, remained in the store and sold goods, but in what capacity they did so, plaintiffs in error stated that they were not informed. If she was in possession of the goods as the owner thereof, as is conceded by the statement of facts, then they could only be in the store as her subordinates, her clerks or salesmen.

The facts thus relied on do not prove a retention of the possession of the goods by the vendor after the sale, nor do they invalidate the sale, in the face of the admission that Mary E. Madden bought the goods and took possession of them al the time of her purchase, and the further admission by the plaintiffs in error that they knew of no ground on which the sale could be attacked except such, if any there were, as was apparent on the face of the record of the case. They did not establish the possession in Michael Madden, or any different possession, control, or management in him from that in his former clerk, Alex. Byrd; nor that there was any lack of fairness and good faith in the sale to Mary E. Madden. Consequently, the principle of law invoked by the plaintiffs in error in support of their claim to subject the goods to the payment of their execution does not apply, and the property was not liable.

Nor does section 2877 of the .Code, which was also relied on, apply to the case. The agreed facts do not show that Michael Madden at any time, in the store.at No. 210 Main street, in the city of Norfolk, transacted the business of haberdasher, with the addition of the words “factor,” “agent,” “and company,” or “and Co.;” nor that he transacted such business there in his own name, without such additions, after the sale to Mary E. Madden. In order to bring this particular case within the statute, the burden was on the attacking creditor to prove that Michael Madden transacted the business as the trader in his own name after the sale. The agreement of facts, instead of such proof, contains, on the contrary, the distinct admission by the plaintiffs in error that they were not informed in what capacity he was in the store after the sale, but simply that he and Byrd, who had been his clerk, were there selling goods. It could not be inferred from this ambiguous act, with any sort of propriety, in order to establish fraud, that Michael Madden transacted the business of haberdasher in his own name after the sale to Mary E. Madden; and especially in view of the admission of the sale and delivery of the goods into her possession, without any evidence of a subsequent restoration of their possession to him, and of the public recordation of the bill of sale and her advertisement in the city paper, so as to give the utmost publicity to the transaction, of the fact of her purchase of the goods and of her purpose to continue the business in her own name and on her own account.

The sale, so far as the record discloses, was perfectly fair and bona fide, without any purpose to defeat the rights of the plaintiffs in error, who, in point of fact, were not in anywise misled, deceived, or defrauded by what occurred, since their debt was all contracted prior to the sale of the goods by Michael Madden to Mary E. Madden.

The judgment of the Corporation Court must be affirmed.

Affirmed.