Armfield Co. v. Saleeby
Armfield Co. v. Saleeby
Opinion of the Court
after stating the case: It having appeared that the property sold by C. A. Saleeby to his codefendants was worth more than the amount 'of his indebtedness to the plaintiff, the court gave judgment against both defendants for $446.29, which was the amount of the debt.
The court submitted to the jury, for their determination upon the evidence, the question whether the “Bulk Sales Law” had been violated, and refused to instruct the jury as requested by the defendant. This was error. The statute forbids the sale of a large part or the whole of a stock of merchandise, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the seller’s business, without first complying with certain requirements therein specified as to notice, etc., and if they are not observed, declares that the sale shall be void, and even if they are, such a sale is made prima facie evidence of fraud. Fraud on creditors is the basis of this new remedy, in the one case the fact of noncompliance with the requirements of the statute is -conclusive evidence of it, and the sale is void, and in the other it is prima facie fraudulent, and the evidence is referred to the jury upon which they may find the fact of fraud. Gallup v. Rozier, 172 N. C., 283; Pennel v. Robinson, 164 N. C., 257. The precise questions now before us were not present in the Gallup v. Rozier case, which involved only the correctness of the charge, upon a different ground than the one taken in this case. The point here is whether the court should have given the instruction requested by the defendant. A sale is not forbidden by the statute unless it is of the whole or a large part of the stock, and we do not think that 10-per cent thereof constitutes a large part of this stock. There was evidence to support the prayer of defendants, for L. L. Greenwood,
Tbe defendant further contends tbat, as this action was originally brought in tbe recorder’s court, tbe Superior Court only acquired the jurisdiction derivatively of tbe recorder’s court, and could not amend the pleadings so as to change tbat jurisdiction or to enlarge it, and tbat it has attempted to do so by allowing tbe plaintiff to waive tbe tort arising out of tbe fraud, and to sue on contract. Tbe jurisdiction conferred upon the recorder’s court is limited to those cases of contract where tbe amount in dispute does not exceed $500, and in cases of torts, when it does not exceed $300,. but within those limits tbe jurisdiction is quite broad and comprehensive. Tbe Public-Local Laws of 1913, cb. 667, makes tbe jurisdiction of tbe recorder’s court concurrent with tbat of tbe Superior Court (sec. 3, subsec. 2) in all civil actions, matters and proceedings founded on contract within tbe above limit, and tbe same provision is made in tbe case of torts; and by section 26 tbe procedure, with certain exceptions, is required to follow tbe rules and practice as set forth in chapter 12 of tbe Revisal of 1905, on Civil Procedure and Amendments thereto, in so far as tbe same may be adapted to tbe needs and requirements of said court, and any changes in tbe rules of procedure of tbe court are required to be published. We think tbe court had tbe power, under this act, to proceed against both defendants upon tbe supposition tbat tbe tort, if one was committed, bad been waived, and tbat plaintiff bad elected to sue in contract. Tbe complaint, as originally framed, indicated clearly tbat this was tbe intention of tbe pleader, and we must construe it liberally. Rev., sec. 495; Blackmore v. Winders, 144 N. C., 215; Brewer v. Wynne, 154 N. C., 467; Bank v. Warehouse Co., 172 N. C., 602. No one can read tbe complaint, with prayer for judgment, and not conclude that tbe plaintiff was waiving tbe tort and suing on tbe implied contract, as in indebitatus assumpsit. When tbe court allowed tbe amendment so as expressly to waive tbe tort, it did not substantially change tbe cause of action but simply amplified tbe statement so as to show more clearly and expressly what was implied or to be inferred from tbe complaint as already drawn. This was legitimate and proper. It was not tbe substitution of a new cause of action but a better pleading of tbe original one. Simpson v. R. R., 133 N. C., 95, 98; Pickett v. R. R., 153 N. C., 148; Hockfield v. R. R., 150 N. C., 419; Gadsden v. Crafts, 175 N. C., 358. We said in tbe Simpson case, supra: “Tbe general scope and purpose of this action, or what is sometimes called tbe gravamen, tbe grievance or injury specially com
"We have held that in cases of fraud, where the person.committing it has been thereby enriched to the damage or detriment of the other and innocent party, indebitatus assumpsit will lie against him, upon the ground that the law implies a promise on his part to' restore what he has thus gained by the transaction. The subject is discussed in Keener on Quasi Contracts, pp. 318-325. We so decided in Sanders v. Bagan, 172 N. C., 612, where Justice Hoke treats the subject, and reviews the authorities with much clearness and discrimination, and concludes as follows: “The action of indebitatus assumpsit, as stated, is dependent largely on equitable principles (Mitchell v. Walker, 30. N. C., 243), and in the absence of a special contract controlling the'matter, and unless in contravention of some public policy, it will usually lie wherever one may have been enriched or his estate enhanced at another’s expense under circumstances that, in equity and good conscience, call for an accounting by the wrong-doer.” The third syllabus is especially pertinent to this case: “When one’s property has been wrongfully converted by fraud or deceit the owner is allowed to waive the tort and sue on an implied contract in the equitable action of indebitatus assumpsitIt has also been held that, in equity, where one has acquired the property of another in fraud of the rights of a third party, and has disposed of the same so that it cannot be reached by execution or ordinary process, the court may render a money judgment against the fraudulent vendee for the value of the property so fraudulently converted. Sprinkle v. Wellborn, 140 N. C., 163-178, and cases cited. The law simply compels the vendee, who cooperated with his fraudulent vendor, to surrender what he has unfairly and unjustly received, and of which he has deprived the vendor’s creditors, it being an asset of their debtor to which they .are entitled to resort for the satisfaction of their claim.
It was decided in Whitmore v. Hyatt, 175 N. C., 117, where the property was alleged to have been sold in violation of the “Bulk Sales Law,” that the creditors could recover of the buyer the vahxe of the goods so sold by their debtor, who was the seller, citing Daly v. Drug Co., 127 Tenn., 412, and Martin v. Binger, 91 S. E. (W. Va.), 386. The Daly case involved this very question.
There was error in the charge, because of which a new trial is ordered.
New trial.
Reference
- Full Case Name
- ARMFIELD COMPANY and J. A. NIVEN, Trustee in Bankruptcy v. C. A. SALEEBY and T. S. SALEEBY
- Cited By
- 7 cases
- Status
- Published