Ranney-Alton Mercantile Co. v. Hanes

Opinion of the court by Irwin, J.: In this case, the defendants in error, being the interpleaders in. the district court, filed a motion to dismiss this appeal, for the reason that said petition and said cause were filed in this court after the death of T. 0. Hanes, one of the defendants in error, and and that there has been no service of summons in error herein; the summons in error being served on the defendant ip error, Johnston, only. If the interpleader in *476 this case had been filed, and the case conducted in the district court by the interpleaders, Joh ston and Hanes, in their individual capacity, this objection would be well taken, and the cause would necessarily have to be dismissed, but an inspection of the record will show that while the petition in interpleader is entitled in the individual names of the interpleaders, the body and context of the instrument will show that it was really and in fact filed by and on behalf of the partnership of Hanes & Johnston, and that the recovery of the property was claimed by the partnership of Hanes & Johnston; and, by our statute, section 3538, Law's of 1893, und r the title of'“Partnership,” provision is made that on the death of a partner, the surviving partner succeeds to all the partnership property, whether real or personal, in trust, for the purpose of liquidation, and section 1386, of the statute, provides that the surviving partner shall settle all ' partnership business. These sections of our statute are identical with sections of the California and Nevada statutes, as well as the statutes of several other states, and have frequently been construed by the supreme courts of other states, and the holding ha.s universally been that the surviving partner is the proper party to sue in all cases touching the unsettled affairs of ;the partnership. (Berson v. Ewing et al. 23 Pac. [Cal.] 1112; Reese v. Kinkead, 30 Pac. [Nev.] 1087; Friermuth v. Friermuth 46 Cal. 44; Matney v. Gregg Bros. Grain Co. 19 Mo. app. 107.) In this case the court says: “On the death ,of a partner, a cause of action in a suit by the firm on a contract, survives to the surviving partner, who is the only necessary party thereto.” *477 Hence, we think, under the facts in this case, as developed in the pleadings and the evidence, that the service of summons on the defendant in error, J. W. Johnston, was sufficient. The plaintiff in error in this case asks for a reversal for the reason that the verdict of the jury should have been in the alternative, for the reason of the specific property in the said petition described, or, in the event that it could not be so returned, for the value thereof. That is, that the jury returned a money verdict, instead of a verdict for the delivery of possession of the specific property described in the petition. We do not think this is reversible error. Section 4063 of the Statutes of Oklahoma, 1893, provides that in possessory actions, judgment “may be for the possesion or for the recovery of possession, or the value thereof in case the delivery cannot be had, and the damages for the detention.” Section 3918, Statutes of Oklahoma, 1893, provides: “Any person claiming property, money, effects or credits attached, may interplead in the cause, verifying the same by affidavit, made by himself, agent or attorney, and issues may be made upon such interpleader, and shall be tried as like issues between plaintiff and defendant, and without any unnecessary delay.” This action is a proceeding in attachment, and while, by the interpleader, the defendant in error claims the right of the possession of the property, and while it is somewhat in the nature of a replevin action, we, do not think that the verdict in this case should be the same as in an action or replevin. While it is true that the law provides that the verdict may be for the return of the *478 property, or for a judgment for the value of th? p op rty, where the same cannot be returned., we do not think that the law ever intended that the jury should return a verdict commanding a certain act to be done which they at the time knew was impossible. In this case the property described in the petition, which was in litigation, had, by an order of the court, granted on the application of the plaintiff in error, been sold, and the proceeds converted into money, the same being brought into court. This action of the court rendered it impossible for the specific property to be relumed, and a verdict of the jury, ordering such return, would have been entirety useless.' This cause was tried by both sides on the theory tliacj whoever would recover in the case should have, not the specific property, but the proceeds thereof. Now, when that part of the verdict of the jury requiring the return of the specific property had been rendered impossible by the act of the plaintiff in error, and over the objection of the defendant in error, the plaintiff in error, should, in equity and good conscience, be estop-ped from asking and urging thus as a cause for reversal. The first point which is urged by the plaintiffs in their general brief, for the reversal of this judgment, is that the judgment and verdict are contrary to law and evidence in the case, on the grounds that the 'alleged sale from Lee Hanes, the original defendant in the attachment proceedings, to the interpleaders, Johnston and Hanes, was fraudulent as against the plaintiffs in error, creditors of said Lee Hanes; on the grounds (1) that said sale was not made in good faith, and for a fair and reasonable consideration, but was made for the purpose of hindering, de *479 laying, and defrauding the other creditors of the Hanes s Grocery company, including the plaintiff in error herein, and that such fraudulent intention was known to the defendants in error at the time of said sale, or was made under circumstances that would have led a reasonably prudent person to understand such fraudulent purpose; and (2) for the reason that no change of possession of the property pretended to be transferred by said sale was made, and that the purchasers did not take such possession as is contemplated and required by our statute. Our statute, section 2663, chapter 27, page 541, Statutes of 1893, provides: “Every transfer of personal property, other than a thing in action, or a ship or cargo at sea, or in a foreign port, and every lien thereon other than a mortgage, when allowed by law, and a contract of bottomry or respondentia is conclusively presumed, if made by a person having at the time possession or control of the property, and not accompanied by immediate delivery and followed by an actual and continued change of possession of the things transferred, to be fraudulent, and therefore void, against those who are his creditors while he remains in possession, and the successors in interest of such creditors, and against any person on whom his estate devolves in trust for the benefit of others than himself, and against purchaser's or encumbrancers in good faith subsequent to the” transfer.” This statute is identical with the statute on the same subject of California, and Dakota, and substantially the ■same as Colorado', Idaho and Montana. The supreme court of California, in the case of Young v. Poole, cited in 13 Pac. p. 492, in passing upon a statute *480 identical with ours on the subject of the delivery of possession, decided that where the panties occupied similar relations to those claimed by defendants in error between Lee Hanes and T, C. Hanes, to-wit, the relation of employer and employe, where the employer sold personal property to the employe, and the said property was allowed to remain in the same building which it had previously occupied, and the only change of the possession was the change of the sign where the employe had a sign placed over the original sign, and he was in said sign named as successor to the original owner, the court there held that this was not such a change of possession as would constitute an immediate delivery, 'and an actual and continued change of possession, such as required by statute, and that said sale was fraudulent as to the creditors of the vendor. • The supreme court of Colorado considered substantially the same statute as ours in the case of Lloyd v. Williams et al., reported in the 40th Pac. page 243. In this case the sale was made to a clerk of the vendor, who had been in the store for some months, (the same as the case at bar;) no inventory of the stock was taken upon making the sale, the signs on the store were unchanged, and nothing to indicate a change of possession, except that the vendor left the store on making the sale and did not return, and when the attachment levy was made, the vendee was present and informed the officers that he owned the goods, showing them a,t that time a bill of sale. Held by the court that the sale was void,, there being no immediate delivery, and actual and continued change of possession, as required by statute. The court there, speaking through Chief Justice Elbert, says: *481 “The vendee must take actual possession, and the p:s-session must be open, notorious and unequivocal, and such as to apprise the community, or those who are accustomed to deal with the party, that the goods have changed hands, and that the title has passed out of the seller and into the purchaser.” The court, in this opinion, further says: “In the case at bar, when the attachment was levied, there was nothing about the store, or upon the premises, from which any person could infer that McIntosh was not still the owner. Nothing had been done to advise the public, or persons dealing there that the property had changed hands No inventory was taken, and the goods were left in-the same position which they had formerly occupied. It is true that McIntosh was not there on the morning of the 17th, and Lloyd was theie, but Lloyd had been there befoie. During the whole time of the proprietorship of McIntosh, Llpyd was acting for him, in the business, as his employe and 'agent; and it is fair to assume that McIntosh had not been there himself constantly. The presence of Lloyd, and the absence of McIntosh, on that occasion, are both matters, which, in themselves, were entirely without s:gnificance. It is also true that Lloyd told the officer that he was the owner, and showed him the bill of sale, but a mere bill of sale is no compliance with the law, and the statute dees not permit the transaction to rest upon the declarations of the of the parties." “Even if the plaintiffs before commencing their suit, had full knowledge of the transaction, the situation would not be altered. They would only have known of a sale which was void as to them’.” In support of this doctrine the court cites, Perrin v. Reed, 35 Vt. 2. The Colorado court further says: “This sale may have been made in good faith. There is nothing in the *482 evidence to indicate that it was not. But the statute is peremptory in it® terms, and whether there was fraud, in fact, or not, the transaction was of no avail, as against the plaintiffs.” An examination of this case will show that the only difference between that case and the one at bar, is whatever the proof in this case shows as- to the change of the sign. In the case decided by the Colorado court, there was no change of sign. In this case, as to whether there was or was not a change of sign, the proof is by no means clear. Again, the Colorado supreme court in the case of Wilcox et al. v. Jackson, reported in vol. 4 of the Pac. Rep. page 966, in a case where property was levied upon by attachment, and parties sought to recover possession of the property by virtue of a chattel mortgage, in construing a statute similar to our own, which statute is set forth in said opinion, and reads as follows: “Every sale made by a vender of goods and chattels in his possession, or in 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 ihe person making such assignment.” It will be seen that this statute is substantially the same as ours, and in interpreting this statute the court there says: “The vendee must take the actual possession, and the possession must be open, notorious and un-epuivocal, such as to apprise the community, or those *483 who are accustomed to deal with the party, that the goods have changed hands, and that the title to the goods has passed out oí the seller into the purchaser'; this must be determined by the vendee’s using the usual marks or indicia of ownership, and occupying the relation to the thing sold which owners of property generally sustain to their own property.” The evidence in that case showed the business was continued in the same building, the goods being sold at retail as before. The sign of Tribe & Jefferay was not removed, nor was there a new sign put up to indicate a change of proprietors. J ackson did not devote his time to the business, but Charles Jefferay, a brother of the partner, George H. Jefferay, was placed in charge. He was a clerk of the former firm, and being- accustomed to clerk there, hils appearance indicated no change. The only visible change that appears to have been made was the employment of another clerk, one Curtis. But can it be said that the mere employment of an additional clerk in a mercantile business is- a sufficient notice of a change of ownership to put purchasers and creditors upon their inquiry? And in this case the court held that there was not such a change of the possession as to render the sale valid. One of the reasons alleged by the plaintiff in error for the contention that this case was fraululent, as to creditors, is that the consideration paid was inadequate, and not a fair price for the property .purchased. The proof in this case shows that the interpleader, Johnston, held notes against Lee Hanes for $1,150, and that payments had been made thereon reducing the amount due at the time of the sale to about $950; that R. L. Banes was *484 indebted to bis father, T. C. Hanes, in the sum of $600 on a settlement for which R. L. Hanes executed his note to T. C. Hanfes. It is claimed that, as a part of the consideration. also, that R. L. Hanes owed one Wallace a note of $600, on which T. O. Hanes was surety. Also a note to the bank of $200 on which T. C. Hanes was surety. And also a note of $125 to one John- Carson, on which T. C. Hanes was surety, making a total consideration as claimed, by the interpleaders of $2,275. The proof shows that the property conveyed by said bill of sale was worth at the time of said sale $3,000 to $3,300, thus making the value of said property exceed the consideration some where from $700 to $1,000. In passing upon this question the supreme court of Kansas, under a statute somewhat similar to the statute of Oklahoma, the difference in the two statutes being that the language used- in the Kansas statute is: “That fraud from lack of change of possession is presumed until it is shown that the sale was in good faith and for an adequate consideration,” whereas, in our statute, the fraud from lack of change of possession renders the sale absolutely void. The Kansas supreme court, in the case of Lewis v. Hughes, 49 Kansas, page 43, says: “Where a creditor purchases property of his debtor, who is insolvent, and whom he knows is attempting to dispose of bis property to defraud his creditors, and pays for the same with a note, or an account long overdue, he must act in good faith and pay or allow his debtor an adequate price or fair value for the property purchased.” In support of his doctrine, the Kansas court cites: Phillips v. Reitg, 16 Kan. 396; McDonald v. Gaunt, 30 Kan. *485 693; Gollober v. Martin, 33 Kan. 252; Bush v. Collins, 35 Kan. 535. The statute of Idaho makes the sale of personal property in the possession of the vendor, except things in action, unaccompanied by immediate delivery, and not followed by an actual and continued change of possession, void as to creditors and subsequent purchasers. In the case of Harkness v. Smith, reported in the 28th Pac. at page 423; being a case where G-., being largely indebted, sold a stock of merchandise to EL, one of his principal creditors who held a chattel mortgage upon a stock of merchandise owned by G. The sale was made at the residence of H., twenty-five miles from the place where the merchandise was. No invoice was ■'aken, no inspection or examination of the stock was made, no change in the clerical force, no change in the conduct or management of the business. G. continued to conduct the business as before, except that he added the abbreviation, “(Mg’r.)” when signing checks, letters, etc. Held, that there was no such immediate delivery,and actual and^continued change of possession as the statute required, and the sale was void as to creditors. In that case the court uses the following language: “Under this section.the sole inquiry is, was there an immediate delivery, followed by an actual and continued change of possession? No question of intent, lona fides, or notice cuts any figure in such case.” The court further says, in the body of this opinion: “It is not enough that there is an actual delivery and an actual change of possession between vendor and vendee, so long as the property, without legal excuse, is placed back in the same condition and the same apparent rela *486 tion to the vendor that there is no such manifest and continued change of possession as would' indicate to the world that there had been a change of title.” Now, measured by the rule laid down in our statute as to delivery of possession, and the construction put upon similar statutes herein cited, and applying the evidence in this case to that rule, was there such an immediate change, followed by an open and continued possession, as would' make such sale valid as against the rights and interests of creditors? The evidence shows that the owner of said property at the time of the sale, R. L. Hanes, was at some distance from Oklahoma City, where said goods were located, to-wit: at Sulphur Springs, Indian Territory, andi had been there for some three weeks prior to said sale; that during his absence he had left Ms father, T. C. Hanes in charge of. the store, with Fightmaster and Ballard as clerks. The interpleader heie, T. O. Hanes, Fightmaster and Ballard, remained in the possession of the store, directing the business in the usual manner up until 2 o’clock, on October 1, 18D5, when this attachment was levied. The only pi oof offered to show any change of possession, was the testimony of the interpleaders themselves, Hanes and Johnston. Johnston testifies that on. the morning of the 1st, when he returned from. Sulphur Springs, after the execution of this bill of sale, he opened the store and was standing in front of the store, when the clerk, Fightmaster, who had been in the habit of opening up in the morning, came along. He says he then told the clerk, in a joking way, that he had found the door open and was standing there watching it until some one would come. He says that he afterwards, in the same conversation, and' before entering the store, told Fight-master that he and T. 0. Hanes had bought tibe stock of *487 goods; that a new firm was in, and t-hat if be continued bd® services it would be under a new firm. As to this testimony, Fightmaster’s evidence is exactly to the contrary. He says that the only talk he had' that morning in front of the store with Mr. Johnston was that detailed by Johnston abount finding the door open, which Johnston says was said in a joke, but Fightmaster says he did not so understand it. He says nothing was said to him by Johnston about any change in possession or change of proprietors, and that the first he knew from Johnston about any change of proprietors was sometime along towards noon, when he came into the store, and ®aw Johnston figuring on the books, and asked him what he was doing. He said that he and .Mr. T. C. Hanes were in the possession of the stock, that he was figuring up to see how they stood, and that he thought they had saved Lee Hanes about one ■thousand dollars. There was some evidence to show that some one was employed to paint a sign on the front of the awnings of the store building, but the evidence is not clear as to what kind of sign it was to be, and there is mnc-h dispute as to just when this sign was painted. Johnston thinks the sign was painted about noon. That is also the testimony of one of the painters, who assisted in painting the sign; but when we hear in mind that this witness could not tell the month or year, or the season of the year in which the sign was painted, and- the further fact that he says his recollection is that he left Oklahoma City in the early part of September, 1895, bis testimony ■on the subject can bave but little weight. Homer Fight-master seems to be a disinterested witness; be testified that whatever sign was painted there, that it was not done until about the time of tbe levy of this attachment. ■Fightmaster also testified that in the forenoon of O'cto- *488 her 1, 1895, which, according to the contention of the in-terpleaders, was after they had taken possession under this bill of sale he had some bills to make and collect, and be was instructed by T. 0. Hanes to stamp upon the bills with a rubber stamp the name of the Banes Grocery company, which instructions he followed. Therefore, we think, taking into consideration the peculiar relations of the parties, that this sale was made at a distance from where the goods were located without an examination as to the vendees, as to the kind, quality or amount of the goods; that no inventory was taken., and that there was no manual change of possession and no visible change in the arrangement of the store — it does not seem to us that there was such a change of possession as would render such a sale valid as against creditors of Lee Hanes, or of the Hanes Grocery company. This question of the delivery of possession, and the question of the good faith and dona fides of the sale are-largely questions of fact, and the rule established by tnis court is that on questions of fact the verdict of the jury will not be disturbed by this court, where an inspection of the record will show that there is evidence which reavon-abty sustains the verdict. But it is always the duty of' this court to examine carefully the evidence, as developed in the record,, and determine whether such evideuce does reasonably sustain the veidict rendered by the jury. We are aware that it is largely the province of the jury to determine the weight.and credibility to be given to the testimony of witnesses. The jury have certain facilities for determining truth and detecting falsehood in the testimony of witnesses which this court does not have, such as the general appearance of the witnesses before them, *489 their intelligence, candor, or lack oí candor, their demeanor while on the stand, their manner and appearance while giving their -testimony, and from these -sources the jury are better able to judge of the weight and credibility of the testimony than this- court possibly can be on a mere examination of that testimony on paper; but, when the court, from an examination -of all the evidence as developed in the record, is satisfied1 that there is- not evidence w-hi-ch reasonably -sustains the findings, then it is the duty of the court to reverse and set aside the verdict of the jury. We cannot conceal from ourselves the fact, that however improper it may be, jurors are sometimes bjased and influenced by local surroundings, or their knowledge of the parties, and sometimes where the interests of an individual come in contact and run contrary to the interests of corporations, jurors sometimes allow their views and- feelings in favor of individuals to- warp and distort their judgment; and because these things- a-re true is the reason of the rule adopted by this court, that if the court can say, from a fair and candid examination of the who-l-e record, that the evidence does not reasonably support the verdict of the jury, then the court should vacate and set such verdict aside. WTe have examined carefully the instructions of the court, and- we -are inclined to think that in the main the instructions of the court were correct, añd that as to the law -of the case the jury were properly instructed-; but, it -seems to us, when we view the evidence in the light of the instructions-, that the jury either lo-s-t sight -of one instruction of the court, or disregarded it. Instruction number 7 given by the court is as follows: *490 “The court further instructs the jury, that if you believe from the evidence that interpleader, T. O. Hanes, subsequently to the dissolution of the said co-partnership of Hanes and Fightmaster, represented himself to any of the agents or employes of plaintiff, to be a partner with R. L. Hanes in the Hanes Grocery company, and that said plaintiff relied upon said representations, and for thai reason extended credit to the Hanes Grocery company, which it otherwise would not have done, then the said interpleader, T. C. Hanes-, cannot recover in this action, although he may not, in fact, have been a partner of the said R. L. Hanes in said business.” Now, what is the proof as to the statement made b,y the interpleader, T. C. Hanes, subsequent to the dissolution of the partnership of Hanes and Fightmaste-r with regard to his being a partner of R. L. Hanes, in the business? T. C. Hanes denies that he ever made any such statement to the effect that he was a partner. The testimony of O. H. Waterhouse, (record, page 320,) is, that in September, 1895 T. C. Hanes told him he was a partner in the business now and that Lee was away sick. At the time of this conversation, Waterhouse says that T. C. Hanes was pressing him for payment of a debt due the Hane® Grocery company. Leach, another witness (record, page 872,) says T. 0. Hanes told him he was a member of the firm. This talk was in April, 1895. Again, the same witness, (record, page 376,) -says that in a conversation between himself, Lee Hanes and T. 0. Hanes, Lee Hanes told him, in the presence of T. 0. Hanes, that T. 0. Hanesi, Ills father, was a partner in the business. Afterwards Leach says that T. G. Hanes told him several times between April and October, 1895, that he was a member of' the firm; that he had taken hold of the business, and expected to- make some money; that he had made money at one time in the *491 grocery business, and believed he could again. The testimony of Stoker, (record, page 248,) is that Lee Hanes told him in the presence of T. C. Hanes, that T. C. Hanes was a partner in the business. While it is true that the testimony of Stoker is not entirely satisfactory, as lie is not clear as to whether the question he asked was understood, by Lee Hanes, and as to whether T. O. Hanes understood what was said, never thel’ess, it is apparent that Lee Hanes did say, on that occasion, that T. C. Hanes was a partner. The testimony shows that T. O. Hanes, at all times, when in and about the store and business, seemed to be taking an active interest in the business. We find on several occasions, in the testimony of several witnesses, he was pressing several people who were indebted to the company for payment. That he was signing notes and going security with various persons for the purpose of paying their m-« debtednes® to the Hanes Grocery company. We find that just before this sale he was making arrangements with the plaintiffs herein, with the Ranney-Alton Mercantile company, through their agent, Leach, to settle up their indebtedness' to that company; that he was giving out checks at the rate of one hundred dollars per week to this company to pay off their indebtedness. Therefore, it seems to us, that under all this testimony, and the evidence of all these witnesses, that the unsupported, naked denial of this man, T. C. Hanes, was not sufficient to authorize the jury to disbelieve the statements of these numerous witnesses, who testify that he had told them that he was a partner in the firm. It seems to us that the testimony clearly shows that the credit given by the plaintiff to the Hanes Grocery com- *492 panv, was on account of the representations of T. C. Hanes that he was a member of the firm; and, if this was true, then under the instruction number 7, given by the court, this verdict should have been in favor of the plaintiff in error, and against the interpleaders. A copy of the books of the Hanes Grocery company, (record, page '296.) seems to conti adict the testimony of T. 0. Hanes, as to the amount due him from Lee Hanes. That book shows that on April 17, 1895, there was due from T. C. Hanes to the Hanes Grocery company, the sum of |1861.81. It seems strange that if the indebtedness alleged by T. C. Hanes to be owing to him by Lee Hanes, was due at that time, that the boobs of the Hanes Grocery company, which were in fact the books of Lee Hanes, and to which books T. C. Hanes had access, and from (hi evidence must have been familiar, s-hould be permitted to show that he was indebted to the Grocery company, in the amount therein stated. Taking all these facts and circumstances together, with the statements of the parties concerning the transactions, and taking into consideration all the circumstances surrounding this sale, as shown by the evidence, the relationship of the parties, and their circumstances concerning it, such as the statement of Johmton, as sworn to by the witness Graves, and the witne.-.® Fightmaster, that they had saved Lee Hanes one thousand dollars by the transaction, and the statement of T. C. Hanes to the witness, Leach, that they did not come down here afoot and would not go out afoot, with all of the circumstances surrounding the transaction, and after a, full and careful consideration and investigation of this evidence, as a whole, we me compelled to say that we are satisfied that the *493 evidence does not reasonably sustain the verdict of the jury, hence we think the decision of the district court should be reversed, and the cause remanded for further hearing in that courl. Burwell, J., having been of counsel in the court below, not sitting; all of the other Justices concurring.