Lehman, Abraham & Co. v. McFarland
Lehman, Abraham & Co. v. McFarland
Opinion of the Court
The opinion of the Court was delivered by
On the 2d day of November, 1882, plaintiffs, as commission merchants, sold to the defendants, owners of a rice mill and dealers in rice in this City, a lot of rice for the sum of $2,878.05, payable in ten days. As the 12th day of November was a Sunday, the bill matured the next day; on which day demand of payment was made by plaintiffs, but without success, aud on the next day they brought suit on their bill, accompanied by attachment, which was executed on the defendants’ rice mill and other property.
The grounds urged for their attachment were, substantially, that the defendants “ have mortgaged, assigned or disposed of, or are about to mortgage, assign and dispose of t.lieir property, rights or credits or some part thereof, with intent to defraud their creditors or give an unfair preference to some of them, and that they have converted or are
. The record contains no evidence in support of,plaintiffs’ allegations, or shows any state of facts to justify the harsh remedy of attachment against these defendants; hence their motion for the dissolution of the same, on the alleged untruth of the averments on which it was issued, was properly maintained by the lower court.
The record shows that the defendant firm, owing to heavy losses sustained in speculations in rice, had become financially embarrassed and so badly crippled, that their business could not longer continue. The partners, therefore, concluded to sell their mill for the purpose of meeting their obligations, and this intention was at once commuuicated to their heaviest creditors, including the plaintiffs in this suit.
To the end of accomplishing their purpose, the defendants called on their largest 'creditors, to whom they exhibited a statement of their financial condition, asking for a few days’ extension on their maturities so as to realize on the proposed sale. The extension was granted by all the large creditors with the exception of plaintiffs, who pressed their debtors for an immediate settlement of their claim, or for security, such as an endorsement or a lien or privilege on the defendants’ mill. After vain and unsuccessful efforts to raise the needed funds or the security required by plaintiffs, the defendants declined to give the lien and privilege asked, unless plaintiffs agreed to accept said lien concurrently with the house of Bush & Levert, and the firm of Maxwell & Peale, the other heaviest creditors of the defendants. Without formally declining this proposition, plaintiffs instituted these proceedings.
The record not only fails to show any fraudulent design of the defendants, but it proves conclusively an honest, honorable and persistent intention on the part of these unfortunate debtors to make any sacrifice necessary to the payment of all their debts and liabilities.
Had they followed the suggestion made by plaintiffs, and had they given to the latter the lien or privilege which they demanded, their conduct would then have made them liable to attachment on the part of their other creditors.
The Court can have no concern with the use which the defendants made of the proceeds of the rice which they had bought from plaintiffs, or of other funds in their possession at the time that plaintiffs’ bill matured.
The prohibition of the law only contemplates the sale, mortgaging
Judgment affirmed.
Dissenting Opinion
Dissenting Opinion.
The following are the facts and circumstances attending the issuing of the writ of attachment as I find them in the record.
The defendants are the proprietors of a rice mill in this city. They buy rough rice, and by a milling process prepare the marketable article, the clean rice, for sale and consumption. The plaintiffs, having on consignment to them as commission merchants a lot of rough rice, sold it to the defendants for $2,878.05, payable in ten days from the sale. When the debt matured they, defendants, Tefused tp pay the price or sum stated, or any part thereof. It appears from the evidence, and mainly from the testimony of the defendants themselves, who were sworn as witnesses on the trial, that the rice bought of the plaintiffs was, in a few days after the purchase, prepared for market and sold and the cash realized therefor before the debt to plaintiffs matured. That the defendants used the funds, derived in part from the sale of this rice, to pay, on the very day that plaintiffs demanded their money, $2,042.68 to one party, and $1,000 to another, and $234.05 to another. After paying these, they had in cash, the same day, $1,785 left, partly derived from the sale of plaintiffs’ rice, yet they refused to pay this amount to plaintiffs, or any part of it, although plaintiffs agreed, if part of the debt was paid, to give an extension of time for the residue. It appears, moreover, from the testimony of one of the defendants, that their excuse for not paying plaintiffs out of this fund was, that they wanted to keep it to pay another debt, which was not then due, but which they, preferred paying to plaintiffs’. At this time their stock of rice was wholly exhausted, and the only means to pay plaintiffs’ debt, as they said, was out of the mill when sold, and which they stated they were endeavoring to sell. On the next day after their refusal to pay plaintiffs, the $1,785 cash to their credit in the bank was withdrawn. Three days thereafter plaintiffs filed their suit, and other creditors followed. Plaintiffs’ suit was defended and payment of their demand resisted. The other suits defendants let go by default, although on the witness stand they acknowledged that plaintiffs’ claim was a just one.
So, concluding, they were fully justified in their apprehensions respecting their debt, and justified, too, in my opinion, in resorting to an attachment as affording the only reasonable hope of realizing their claim.
The acts of the defendants, respecting this transaction, should be taken as better evidence of .their real intentions than the declarations of their good intentions declared on the trial of the case.
The law, under whieh the plaintiffs proceeded, purports to have been enacted for the protection of creditors against attempts on the part of the debtor to plaee his property beyond their reaeh, or to give unjust and illegal preferences. If it is not available to creditors, under like circumstances as shown in this case, but is to be turned to their detriment and loss, however honestly and in good faith they may seek the remedy, then, instead of proving a protection, the law becomes a delusion and a snare. I think the attachment was improperly dissolved.
I, ¡therefore, dissent.
Rehearing refused.
Reference
- Full Case Name
- Lehman, Abraham & Co. v. McFarland & Dupré
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