Farmers Bank & Trust Co. v. Murphy

Connor, J. There was evidence that the seed potatoes, fertilizer and strawberry crates seized by the sheriff under the warrant of attachment as the property of W. M. Murphy were the property of Samuel Snell, of Philadelphia, and were in the j)ossession of Murphy at the time of the seizure as agent of Snell. Upon the ruling of his Honor that certain evidence offered by Murphy was not competent because Samuel Snell had not intervened and was not a party to this action, defendant Murphy moved that said Samuel Snell be allowed to intervene as a party defendant. The deposition of Samuel Snell had been taken and had been introduced in evidence by defendant Murphy. Motion denied. Defendant excepted. Attorney for defendant Murphy, who was also attorney for Samuel Snell, then moved that the pleadings be amended to show that Snell, by his agent, Murphy, intervenes. Motion denied. Defendant excepted. Defendant Murphy assigns as error the refusal by his Honor of these motions. This assignment of error must be sustained upon the authority of Temple v. Hay Company, 184 N. C., 239. The motion was not addressed to the discretion of the court; it was made as a matter of law, upon the facts which the evidence tended to show. Its refusal is reversible error. Holce, J., in the opinion for the Court in Temple v. Hay Company, says: “In various and well-considered decisions of this Court on the subject, it is recognized as the policy and expressed pur *481 pose of our present system of procedure tbat all matters in a given controversy should, as far as possible, be settled in one and tbe same action.” Guthrie v. Durham, 168 N. C., 573; C. S., 460. If tbe facts be as tbe deposition of Samuel Snell and tbe testimony of W. M. Murphy tend to sbow, defendant W. M. Murpby held tbe property levied upon, and sought to be subjected to tbe payment of plaintiffs debt, as agent of Snell. Snell was a necessary party for a final and complete determination of tbe ownership of tbe property. Tbe property attached was claimed by Snell, as appears from bis deposition. He bad tbe right to intervene or interplead. C. S., 829. Murpby, in whose possession tbe property was levied upon by tbe sheriff, denied tbat be owned tbe property, and testified tbat be held it as agent of Snell. Tbe motion should have been allowed, and tbe issue thus raised determined by tbe jury. There was evidence tending to show tbat defendant, W. H. Malpass, purchased tbe stock of merchandise from "W. M. Murpby on 1 August, 1921. There is no evidence tbat C. S., 1013, known as “Tbe Bulk Sales Act” was complied with, nor is there any evidence tbat on said date W. M. Murpby bad any creditors. Tbe notes upon which this action is brought were executed on 15 September, 1921. His Honor instructed tbe jury tbat failure to comply with C. S., 1013, in tbe sale of tbe stock of merchandise by Murpby to Malpass, rendered tbe sale void, tbat no title to same passed from Murpby to Malpass and tbat if they believed all tbe evidence in this case, they could not find tbat Malpass was tbe owner of tbe stock of merchandise at tbe date of tbe seizure by tbe sheriff. Defendants excepted to and assign this instruction as error. This assignment of error must be sustained. C. S., 1013, has no application to this case. Failure to comply with its provisions renders tbe sale void only as against creditors of tbe seller. Tbe provision for notice to creditors, at least seven days before a contemplated sale, as one of tbe requirements for its validity, shows clearly tbat tbe statute applied only to existing creditors of tbe seller. It cannot be construed as applying to a subsequent creditor, certainly where there are no creditors at time of sale. There was evidence tending to show tbat prior to tbe sale on 1 August, 1921, ~W. H. Malpass bad been adjudged a bankrupt, and tbat be was not discharged from bankruptcy until after tbe sale. There is also evidence tbat after tbe sale Malpass continued to carry on tbe business under tbe name of ~W. M. Murpby, buying goods, and depositing money in tbe bank in tbe name of W. M. Murpby. He signed checks on deposits, “W. M. Murpby by W. H. Malpass.” There was no evidence tbat W. H. Malpass filed in tbe office of tbe clerk of tbe Superior Court of Pender County tbe certificate as required by O. S., 3288, or otherwise complied *482 with the provisions of said statute. His Honor instructed the jury that failure by W. H. Malpass to comply with C. S., 3288, rendered the transaction between him and Murphy void as to creditors of the parties. Defendants excepted to and assign this instruction as error. This statute manifestly is for the protection of creditors of persons who fail to comply with its provisions, or of others who do business with them. The consequences of a violation of the statute are prescribed by C. S., 3291. They seem to be limited to punishment as a misdemeanor for it is expressly provided that failure to comply with C. S., 3288 shall not prevent a recovery in a civil action by the person who shall violate the statute. This assignment of error must be sustained. For errors assigned by appellants and sustained by this Court, there must be a new trial., If the motion to make Samuel Snell a party is renewed, it should be allowed so that an issue as to whether he is the owner of the seed potatoes, fertilizer and crates seized by the sheriff may be determined by a jury. The burden of this issue, will, of course, be upon him as an interpleader. There must be a New trial.