Kahn v. Kerngood

Hinton, J., delivered the opinion of the court. The plaintiffs, who constitute the firm of Kerngood Bros., in their bill allege that they are creditors of one J. B. Hofheimer, who had recently sold his stock of goods and personal property to one B. Kahn, with intent to defraud the creditors of the said Hofheimer; that Kahn had conspired with Hofheimer in his attempt to carry out this fraudulent purpose; and they pray that Kahn and Hofheimer may be enjoined from disposing of said property; that a receiver may be appointed; the conveyance be declared void; and the property may be sold under the direction of the court. This bill was filed in the clerk’s office of the corporation court of the city of Norfolk, on the 27th day of April, 1888, in vacation; and on the same day an injunction was awarded; a receiver appointed, and a sale of the property was directed by the judge of that court, in accordance with the prayer of the bill. On the next day Kahn filed his answer, in •which he specifically denies every allegation of fraud in the bill positively, so far as he was concerned, and to the best of his information and belief, so far as his vendor, Hofheimer, was concerned. On the 29th April, 1883, the receiver advertised the property for sale, at auction, on the 4th May then next en [344] suing. On April 30th, 1883, Kahn served notice of a motion to be made on May 2nd, 1883, to dissolve the injunction on the bill and answer. On the last mentioned day, the cause came on to be heard, pursuant to said notice, upon the bill and answer, and three affidavits in support of the bill, when the judge overruled the motion to dissolve the injunction, and continued the same to the hearing. Whereupon, the said Kahn applied for and obtained an appeal from one of the judges of this court. The first question, therefore, which arises is as to the power of this court to take cognizance of the case. It is insisted that this being a mere order refusing to dissolve an injunction, that no appeal lies therefrom. Such, however, is not the case. The Code 1873, chap. 178, § 2, provides that “ any * party to a case in chancery wherein there is a decree or order dissolving an injunction, or requiring money to be paid, or the possession or title of property to be changed, or adjudicating the principles of the cause, * * * * may present a petition for an appeal from the decree or order,” &c. And Judge Moncure, in the case of the Baltimore and Ohio R. R. Co. v. City of Wheeling, 13 G-ratt. 57, said, “As to the objection that no appeal lies from the other order; it being a mere refusal of the judge in vacation to dissolve the injunction, and not an order adjudicating the principles of the cause. There seems to be no substantial difference between the provision on this subject in the Code, p. 682, ch. 182, § 2, and the law as it existed when the Code took effect. In Lomax v. Picot, 2 Rand. 247, it was decided that an order overruling a motion to dissolve an injunction might come within the terms of the law allowing appeals from interlocutory orders, and within the mischief intended to be remedied by that law. The appeal in that case was from such an order, and the court entertained jurisdiction of it. In Talley Tyree, 2 Rob. R. 500, it was held, in accordance with Lomax v. Picot, that an appeal lies to this court from an order of the circuit court overruling a motion to dissolve an injunction which was improvidently granted. The law under which those two cases were decided [345] being the same in effect with the provision on the subject in the Code, they maintain the right of appeal from the order in this case.” And again he says, at page 59: “The refusal of the judge to dissolve the injunction adjudicated the principles to this extent, that the injunction had not been improvidently awarded, and that as the cause then stood it ought still to be continued. It is therefore such an order as may be appealed from.” Upon this point we think the statute and ease above (¡noted imist. be regarded as conclusive. The appeal in the case before us was taken as well from the order appointing a receiver and directing a sale, as from that refusing to dissolve the injunction ; and as it cannot be contended with any show of success that the stock of goods described in this case is of the character of those spoken of in section 16 of chapter 148, Code 1873, which the court is authorized to sell because “perishable and expensive to keep,” we must assume that the court regarded and treated them as the property of Hofheimer, for upon no other ground could the judge have the slightest pretext for selling this property; and this was a practical adjudication of the matter in issue, namely, the title to the property; and even then, his action must be regarded as irregular and premature. But it is contended, that the amount of the plaintiff’s claim being under $500, that this court cannot take jurisdiction of the case. This contention is founded, in our judgment, upon an entire misapprehension of the real matter of controversy. This is a suit to set aside a conveyance alleged to be fraudulent as to creditors. The value of the property, stated in the deed, is $1500, and upon this appeal, in the absence of proof of its real value being less, we must assume that amount as its value, and it is therefore sufficient to give jurisdiction. As between the plaintiffs and the defendant Kahn, there is no contest over a debt. It is admitted, that no matter what may be the debt due from Hofheimer to the plaintiffs, that Kahn does not owe them one cent. Nor is it pretended that Kahn’s property, if it be [346] Kahn’s, is bound by any lien of the plaintiffs. It is only in the event that the deed is proven to be fraudulent in its entirety that the plaintiffs can have any possible claim upon the property conveyed thereby. It is therefore not a contest, so far as Kahn is concerned, over a debt, or even over property, of less value than $500, but it is as to him, a contest as to his title to $1500 worth of property. The suit not having been brought to set aside the deed in part but in whole, the real question, so far as Kahn is concerned, is whether the $1500 worth of property conveyed by that deed is his or Hofhoimer’s, and the question as to the amount of the plaintiffs’ debt is one collateral to the main issue. And this brings us to the last question in the case, which is, whether the court should have dissolved the injunction on bill and answer or not? The general rule is, that when a motion to dissolve comes on to be heard upon the bill and answer, and the answer denies all the equity of the bill, the injunction is usually dissolved; but this rule is not inflexible, for the court may, for good cause shown, refuse to dissolve flic injunction, and continue it to the hearing, without adjudicating the principles of the cause. Sands’ Suit in Equity (new edition), § 366; 1 Barton’s Ch’y Pr. 467; B. & O. R. R. Co. v. City of Wheeling, 13 Gratt. 58. AVe think the case at bar falls within the exception. The law of this state being settled since the case of Ducts v. Turner, 4 Gratt. 423, that the retention of the possession of personal property by the vendor, after an absolute sale, is ;prana facie evidence of fraud as against the creditors of the vendor, which will vacate the transaction as to them, unless the vendee shall prove it to be fair and bona fide. AVe think it was proper for the judge to have refused to dissolve the injunction upon the mere answer of only one of the parties to the assignment. AVe are of opinion, therefore, to reverse the order of the judge of the corporation court of the city of Norfolk, made in vacation on the 27th day of April, 1883, in so 'far as it directs a sale [347] of tlie property in tlie bill and proceedings mentioned, and to direct that tlie said property be returned to the custody of the appellant Kahn, upon his executing and delivering a sufficient bond to secure the forthcoming of the propei’ty, to answer the future orders of the court, to discharge the receiver, and to remand the cause for further proceedings to be had in order to a final decree.