Henry Cowell Lime & Cement Co. v. Smith

THE COURT.

One Draeseke, being in failing circumstances financially, on the ninth day of October, 1913, executed an assignment of his property to Jesse A. Muller, as trustee for the benefit of Draeseke’s creditors, and on the fifteenth day of October, Muller and Draeseke executed another assignment of the same property for the same purpose to the defendant Henry L. Smith. Smith was secretary of the San Francisco board of trade, and the assignments to him and Muller

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were both made for the purpose of closing up Draeseke’s business and paying the proceeds of the sale of his property to his creditors ratably. Pursuant to these assignments and during the month of October, 1913, Smith took over Draeseke’s property. Draeseke was at the time of these assignments indebted to the plaintiff in the sum of $450. On October 14, 1913, defendant called a meeting of Draeseke’s creditors to be held at 2 o ’clock P. M. of that day. Notice of this meeting was given to the plaintiff, and an admission of service of this notice was signed by the plaintiff and is in evidence here. Plaintiff’s attorney attended that meeting. It was held pursuant to the notice, and on the sixteenth day of October, 1913, and with full knowledge of the assignment to Muller and its purpose, the attorney for the defendant delivered to the board of trade—whose representatives both Muller and Smith were in the whole transaction—a statement of the plaintiff’s account with Draeseke, together with a letter in which it was stated that the writer understood that the affairs of Draeseke were being settled through the board of trade, and asked to be advised as to the action already taken and future action which might be taken in the matter. On October 28, 1913, the defendant sold the property of Draeseke which was in his hands under the assignment to him, and subsequently made a dividend of the proceeds. All the creditors except the plaintiff received and accepted their dividends from the defendant. The plaintiff refused to do this, and brought action against Draeseke, and on November 6, 1913, levied an attachment in said action upon all funds in the defendant Smith’s hands belonging to Draeseke. The plaintiff subsequently obtained judgment in that action against Draeseke, upon which execution was issued against the property of Draeseke, and served by the sheriff upon the defendant Smith, by which levy was made upon all moneys in Smith’s hands belonging to Draeseke. Tl.s defendant answered the levy of the execution with the statement that he had no funds in his hands belonging to Draeseke.. The writ was returned unsatisfied, and this' action was thereupon begun against Smith for the amount of the judgment.