Henderson v. D. S. Denehy Mercantile Co. (1920) · DecisionDepot

Henderson v. D. S. Denehy Mercantile Co.

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Court of Appeal Jun 2, 1920 No. Civ. No. 2174.Published

Before: Burnett

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Holding. The court held that a creditor's bill is a proper remedy for a judgment creditor to reach property fraudulently conveyed to a third party when statutory supplementary proceedings are inadequate, and that the complaint sufficiently stated a cause of action.

Issues

Whether the complaint stated a cause of action for a creditor's bill.
Whether the complaint improperly united multiple causes of action.
Whether the complaint was ambiguous, unintelligible, or uncertain.

Disposition. reversed

Quotations verified verbatim against the opinion

“The action is clearly in the nature of a “creditor’s bill,” and we can see no valid objection to the complaint.”

Synopsis

The facts are stated in the opinion of the court.

BURNETT, J.

The appeal is by plaintiff from a judgment in favor of defendant Denehy Mercantile Company after a demurrer to a second amended complaint had been sustained and the plaintiff had declined to amend. The sole question on this appeal is therefore the sufficiency of said amended complaint. Appellant has made and presented a synopsis of said complaint, which we substantially adopt in the following statement: On April 30, 1918, M. Hotchkiss & Sons, retail merchants of Lake City, Modoc County, California, while indebted to plaintiff’s assignors in the sum of $1,197.91, sold and delivered their stock in trade of the value of $3,000 to the defendants herein. “That neither the said M. Hotchkiss & Sons or said defendants, D. S. Denehy Mercantile Company, Incorporated, and John H. Hornbacb, or either, or any of them, either at least seven days before the consummation of said sale or transfer or assignment or ever or at all, recorded, or caused to be

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recorded, nor was there at any time recorded on behalf of either of said persons or at all, in the office of the County Recorder of the County of Modoc, State aforesaid, or any other place, a notice of said intended sale, transfer or assignment, nor was there ever recorded a notice or any notice, as provided in Section 3440, Division 4, Part 2, of the Civil Code of the State of California; that no notice of said intended sale, transfer, or assignment of any kind, character, or description, was filed or recorded or filed for record either in the Office of the County Recorder of the County of Modoc, State aforesaid, where said stock in trade was situated or at any other place.”

On August 5, 1918, plaintiff brought suit on his assignors’ claims, and on September 5, 1918, procured judgment thereon against Hotchkiss & Sons, and caused a writ of execution to be levied by way of garnishment on defendants in this action and by way of direct levy on all other known property of said Hotchkiss & Sons in Modoc County, California. Defendants denied having any property belonging to Hotchkiss & Sons, and asserted themselves to be the owners of said stock in trade, and refused to turn over the same to the sheriff for application to satisfy the execution. Under the execution upon the other property the net receipts of the sheriff amounted only to $192.46. With this exception the writ was returned

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However, it is due respondent’s counsel to say that they do not specifically make this objection. The only reason they advance for their position as to the insufficiency of the complaint is found in this statement: “If it is an action against defendant, as the vendee of M. Hotchkiss & Sons, for purchasing the stock of goods without giving the notice required by section 3440 of "the Civil Code, it fails to state a cause of action. The effect of that statute is simply to make such sale void and leave the title to the property in the vendor so far as the creditors are concerned. In other words, the plaintiff could have levied his execution or attachment upon these goods while they were in the hands of M. Hotchkiss & Sons and this sale without notice did not prevent him from following the goods and levying upon them in the hands of the vendee of said M. Hotchkiss & Sons. The remedy of the plaintiff if defendant purchased the stock of goods without giving the notice required by section 3440 of the Civil Code was to follow and seize the goods.” The foregoing may be considered as a suggestion that the complaint should show the said steps to have been taken. So considered, it is sufficient to say that therein it clearly appears that just that course was pursued. It appears that the property was in the possession of said defendant D. S. Deheny Mercantile Company—the only defendant that has appeared in this court-—and that the sheriff levied upon said property the writ of execution, “that after the levy of said writ of execution upon said defendant D. S. Deheny Mercantile Company, it neglected, failed, and refused and still neglects, fails, and refuses to deliver over to said sheriff for the plaintiff, the aforesaid stock in trade or any part thereof so received by it as aforesaid from said M. Hotchkiss & Sons, or to pay to said sheriff the value thereof or any part thereof or to pay unto said sheriff the. amount named in said writ of execution or any part thereof.” That the plaintiff did not take actual possession of the property was due to the action

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Synopsis

BURNETT, J.

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