Pierce v. Evans

The opinion of the court was delivered, May 11th 1869, by Agnew, J. It. seems to us there was no substantial error in the charge of the court in this case. The agreement of the 6th of August 1867 between Hanley and Pierce and Green certainly operated as an abandonment of the executions of Pierce & Neyhart and of Green. They were inconsistent and could not stand together. The goods were to be sold by the plaintiffs and not by the sheriff — it was to be by private and not public sale, and without the notice that the law requires. If anything is settled it is that sheriff’s sales must be public and not private, and on the notice required by law: Gibbs v. Neeley, 7 Watts 305; Bingham v. Young, 10 Barr 396; Keyser’s Appeal, 1 Harris 411; Ricketts v. Unangst, 3 Id. 90; McMichael v. McDermott, 5 Id. 353. The tendency of all arrangements for a private sale under execution is to fraud, and hence it is against public policy. The proceeds of the sales were to be paid to the plaintiffs and not to the sheriff, as argued for the plaintiffs in error. The residue of the goods not needed for satisfaction of the claims was to be returned to Hanley, and indeed the whole scheme of the agreement was aside from the proceeding upon the writs. The writs were referred to in the agreement only for the purpose of description, to identify the claims of the plaintiffs. The objection that there was no consideration for the agreement is untenable. The covenants were mutual and the writing was under seal. The fact that the property was levied in execution does not alter the case. The plaintiffs chose to take a present private transfer and possession; in lieu of a future official sale at public auction, for reasons they deemed most beneficial to themselves. Upon a careful examination of the whole charge we do not think that the portion set forth in the 3d assignment of error was a binding legal instruction to the jury that Hanley contemplated bankruptcy at the time of the agreement. It was certainly a pretty strong assertion of the opinion of the judge on the question of fact, but what follows it immediately, as well as the answer to the defendant’s 6th point, and other portions of the charge show that the court left the question as to the agreement being made in contemplation of bankruptcy by Hanley, as a fact to be found by the jury. The plaintiffs in error have not furnished us with the [421] testimony bearing on this question, but as we find the facts stated by the judge in his charge, and by the defendant in error, it would seem beyond question that Hanley was largely insolvent before he gave the judgments to the plaintiffs. The allegation of the fact of bankruptcy, and that the judgments were given and the agreement entered into in order to prefer the plaintiffs set forth in the creditors’ petition; Hanley’s default and the decree against him thereupon by the bankrupt court, were certainly sufficient to justify a very strong assertion of opinion on part of the judge unless it were meant to be binding on the jury. But we think the whole charge could not be misunderstood by the jury, and this fact was therefore submitted to them. Nor do we discover any error in the portions assigned for error in the 4th and 5th assignments. Clearly the transfer of all of Hanley’s goods and the lease of the storehouse in which they were kept, and putting others into possession with authority to sell all his stock, and apply the proceeds to the payment of debts in execution, was not in the usual course of business; did break up his business; and was not only some, but very strong evidence of an intent to prefer these creditors, Hanley being at the time clearly insolvent. What is the usual course of a retail merchant’s business ? It is to sell his goods at his usual place of business to customers as they come, to keep up an ordinary stock and continue in business in the usual way that such merchants do. Certainly it is not in the usual course of a retail merchant’s business when in a state of actual insolvency to confess judgment to certain creditors, suffer executions to be levied by them, and. then to assign over to them all his stock and his place of business, put them in possession, and provide that the surplus over payment of their claims shall be returned to himself. Such a state of facts undoubtedly did justify the court in saying that it was required to be rebutted by some evidence that the transaction was not intended as an undue preference contrary to the provisions of the Bankrupt Law. Finding no error, the judgment is affirmed.