ÆäÀÌÁö À̹ÌÁö
PDF
ePub

HURT v. MORGAN COUNTY. (Court of Appeals of Kentucky. Oct. 22, 1915.) 1. OFFICERS 100-CHANGE OF COMPENSA1. OFFICERS 100-CHANGE OF COMPENSA

TION-FIXING AFTER ELECTION.

While, under Const. §§ 161, 235, prohibiting change of the compensation or salary of county and public officers after their election or during their term of office, compensation, not having been fixed before election, may thereafter be fixed, it cannot subsequently be changed. [Ed. Note. For other cases, see Officers, Cent. Dig. 88 152-157; Dec. Dig. 100.]

2. JUDGES 22-FISCAL COURT- DISQUALIFICATION BY INTEREST.

One is disqualified by interest to vote as a member of a county's fiscal court on a motion to fix salaries, including his own as county judge.

[Ed. Note.-For other cases, see Judges, Cent. Dig. §§ 75-88, 179; Dec. Dig. 22.] 3. COUNTIES

57-ORDER OF FISCAL COURT -COLLATERAL ATTACK. The order of a county's fiscal court fixing salary and compensation of officers cannot be collaterally attacked.

[Ed. Note. For other cases, see Counties, Cent. Dig. §§ 74, 75; Dec. Dig. 57.]

Appeal from Circuit Court, Morgan County.

The fiscal court of, Morgan County made an order reducing the salary of S. M. R. Hurt, as County Attorney, and he appealed to the circuit court, and from its judgment of affirmance again appeals. Reversed.

Fogg & Kirk, of Paintsville, for appellant. A. N. Cisco, of West Liberty, for appellee.

MILLER, C. J. This appeal contests the right of the fiscal court of Morgan county to reduce the salary of the appellant, S. M. R. Hurt, as county attorney.

Section 161 of the Kentucky Constitution, reads as follows:

elected, but before he had qualified, as county attorney, the following action was taken: "On motion of W. G. Short and second by Franklin Walters that the salaries of the county judge, county attorney, and school superintendent for this ensuing term, beginning January, 1914, be fixed at $900 each, and yea_and nay votes: W. G. Short, Yea. Yea. A. F. Blevins, Yea. A. F. Blevins, Yea. Franklin Walters, Nay. S. S. Dennis, not voting. J. S. McGuire, Nay. J. E. Lewis, Nay. There being three yeas and three nays, and a tie vote, I. C. Ferguson, county judge, presiding, voted yea, and the motion carried.'

E. W. Day,

The fiscal court paid appellant $900 for his services as county attorney for the year 1914; but at the regular term of the court held in November, 1914, it entered the two following orders:

"(1) On motion of B. F. Blankenship, and second by J. M. Carpenter, it is ordered and directed that the county judge and county attorney receive at the rate of $900 per year each for their salaries up to January 1, 1915.

"(2) Motion made by B. F. Blankenship, and second by J. R. Day, that the salaries of the county attorney and county judge, be, and they are hereby, fixed at the sum of $600 per year beginning January 1, 1915."

From this last order reducing his salary to $600 per year, Hurt prosecuted an appeal to the circuit court. waived, and the case was tried by the cirA jury trial was cuit judge; and from his judgment affirming the order of the fiscal court, Hurt prosecutes this appeal.

[1] The meaning of section 161 of the Constitution, above quoted, is in no sense doubtful. It provides, in express terms, that the compensation of a county officer shall not be changed after his election or appointment, or during his term of office. Section 235 of the Constitution repeats the provision, by saying that:

"The salaries of public officers shall not be changed during the terms for which they were elected."

The purpose of these salutary constitutional provisions was to put it beyond the power

"The compensation of any city, county, town or municipal officer shall not be changed after his election or appointment, or during his term of office; nor shall the term of any such officer be extended beyond the period for which he may have been elected or appointed." Section 235 of that instrument further pro- ney by raising his salary or from punishing vides:

"The salaries of public officers shall not be changed during the terms for which they were elected; but it shall be the duty of the General Assembly to regulate, by a general law, in what cases and what deductions shall be made for neglect of official duties. This section shall apply to members of the General Assembly also." The appellant was elected county attorney for Morgan county at the regular election held in November, 1913, for a term of four years beginning January 1, 1914. The compensation of his office at the time he was elected was $900 per year. The orders of the fiscal court show that an annual salary of $900 had been paid to Haney, his predecessor in office, from 1910 to 1914, although there was no order of court formally fixing his salary.

At the meeting of the fiscal court held November 29, 1913, after appellant had been

of the fiscal court either to reward its attor

him by reducing his salary during his term of office. This purpose is carried out by fixing the salary before those whose duty it is to fix it know who the incumbent will be. This is especially important with reference to the office of county attorney, who should, above all other officers, be entirely free from the influence that the power to regulate his pay would give to another.

In carrying out the provisions of the Constitution above quoted it was the duty of the fiscal court, by an order entered before the election of the county attorney, to fix his salary for the ensuing term; but, having failed in this case to fix the salary before his election, it had the right to do so after his election and before his qualification, or even after he had taken office. Barrett v. City of Falmouth, 109 Ky. 151, 58 S. W. 520, 21 Ky. Law Rep. 667; Marion County Fiscal Court v.

Kelly, 112 Ky. 831, 56 S. W. 815, 22 Ky. Law | cause the clerk, Sebastian, told him he had Rep. 174; Jefferson County v. Waters, 114 no right to vote, and but for this advice he Ky. 48, 70 S. W. 40, 24 Ky. Law Rep. 816; would have voted against fixing the salary Butler v. James, 116 Ky. 575, 76 S. W. 402, of the county attorney at $900. This testi25 Ky. Law Rep. 801; McNew v. Nicholas, mony was admitted over the objection of ap125 Ky. 66, 100 S. W. 324, 30 Ky. Law Rep. pellant. Dennis, however, admits that after 1147; Grayson County v. Rogers, 122 S. W. he qualified as county judge he received his 868; Fox v. Lantrip, 162 Ky. 184, 172 S. salary at the rate of $900 per year, under W. 133. the order of November 29, 1913.

It is clear, therefore, that the order of November 29, 1913, fixing appellant's salary at $900, was properly entered, and the subsequent order of November 26, 1914, changing his salary to $600 per year, from January 1, 1915, was unauthorized and invalid.

There are several reasons why the testimony of Dennis was incompetent. In the first place, the order in question also fixed Dennis' salary as county judge; and, being interested, he was not competent to vote upon the motion and thus break the tie. Grayson County v. Rogers, supra; Thomas v. O'Brien, 138 Ky. 775, 129 S. W. 103.

A court speaks by the record, and can speak in no other way. And, having spoken through the judgment and within its jurisdiction, the ruling is conclusive in a collateral proceeding and cannot be questioned, as is here attempted. Grayson County v. Rogers, supra. If a judgment could be attacked indirectly, there would be an end to that confidence in the stability of judgments, regu

[2, 3] The circuit judge seems to have reached his decision upon the theory that the order of November 29, 1913, fixing appellant's salary at $900, was improperly entered, and was therefore ineffectual for any purpose. This conclusion was based upon the testimony of S. S. Dennis, who was a member of the fiscal court at that time, and had been elected county judge at the November election three weeks before, although he did not take his seat as judge until January, 1914. Dennis testified that he was present at the meet-larly entered, which is the very foundation ing of the fiscal court on November 29, 1913, but that he was prevented from voting on the motion fixing appellant's salary at $900 be

of our system of jurisprudence.

Judgment reversed for further proceedings consistent with this opinion.

[blocks in formation]

The Bulk Sales Law (Acts 31st Leg. c. 27), requiring particular formalities for a sale of a stock of goods other than in the usual way, and making it invalid as to the creditors of the seller unless there is compliance, is a valid exercise of the police power, and does not unreasonably deprive the owners of merchandise of their control over it and right to contract in relation to it.

[Ed. Note. For other cases, see Fraudulent Conveyances, Cent. Dig. § 5; Dec. Dig. 3.]

2. FRAUDULENT CONVEYANCES 229-REMEDIES OF CREDITOR-GARNISHMENT.

Under Bulk Sales Law (Acts 31st Leg. c. 27) § 1, declaring that any sale of a stock of goods not in the ordinary course of business shall be void as against the creditors of the seller, unless the purchaser shall at least 10 days before sale make full inquiry as to the names of all creditors, obtain from the seller a written answer to such inquiries, which answer shall be sworn to by the seller, and notify such creditors of the sale, one who purchases a stock of goods without complying with the statute becomes a trustee for the creditors of the seller, and, notwithstanding the goods have been sold, by him and proceeds disposed of, the seller's creditors may recover by garnishment.

[Ed. Note. For other cases, see Fraudulent Note.-For Conveyances, Cent. Dig. §§ 668-670; Dec. Dig. mm 229.]

3. APPEAL AND ERKOR

747-ASSIGNMENT

OF CROSS-ERROR-NECESSITY.

Where plaintiff did not on defendant's appeal assign as error the denial of complete relief, the question will not be reviewed.

[Ed. Note. For other cases, see Appeal and Error, Cent. Dig. §§ 3053-3056; Dec. Dig. 747.]

Error to Court of Civil Appeals of Third Supreme Judicial District.

Action by the Owosso Carriage & Sleigh Company against C. K. Sweet and McIntosh & Warren, garnishee. A judgment in part for plaintiff against the defendant garnishee was reversed and remanded by the Court of Civil Appeals (146 S. W. 239), and plaintiff brings error. Judgment of Court of Civil Appeals reversed, and that of trial court affirmed.

I. J. Rice, of Brownwood, for plaintiff in error. T. C. Wilkinson, of Brownwood, for defendant in error.

YANTIS, J. This case involves, as the main questions, the constitutionality of what is commonly known as the "Bulk Sales Law," passed by the Thirty-First Legislature, and the effect of the service of the writ of garnishment upon the proceeds of the sale of merchandise which was purchased by McIntosh & Warren, defendants in error, at private sale, and not in the ordinary course of trade, but in bulk, and in violation of all the provisions of said bulk sales statute, and afterwards resold by them and converted into cash prior to the service of the writ of

garnishment upon them, which was issued at the instance of the Owosso Carriage & Sleigh Company, plaintiff in error.

Trial in the court below was had on an agreed statement of facts, which showed, substantially, as follows:

On said

One C. K. Sweet was engaged in the implement, vehicle and hardware business in the town of Brownwood. The evidence strongly indicates that on the 10th day of August, 1909, he was insolvent. date, and for at least 30 days prior thereto, he was indebted to the plaintiff in error, a foreign creditor, in the sum of $1,700 for vehicles, etc., sold him by the plaintiff in

error for use in said business. He was also indebted to various other wholesale dealers for goods used in said business, among them the Keating Implement & Machinery Company for $3,617.95, and the Emerson Manufacturing Company for $1,294. He owed various other creditors in the aggregate sum of $3,000. On said 10th day of August, 1909, he sold his stock of goods in bulk to McIntosh & Warren, defendants in error, for the consideration of $6,005.97; they assuming the payment of said $3,617.95 to Keating Implement & Machinery Company, and $1,294 to the Emerson Manufacturing Company as a part of said consideration, and paying to said Sweet in cash the sum of $500, and giving him one negotiable promissory note for $594.02, due January 1, 1910, which was paid to said Sweet on the day of its maturity. The consideration paid was a fair price for the property. At the time of

said transfer and sale of said merchandise, the said Sweet had no other property except some negotiable promissory notes, amounting in the aggregate to about $7,000, due him by various customers scattered over his trade territory, for merchandise which had been sold to them. The evidence shows that, if the crops had been good in that section for the years 1909 and 1910, said notes would have been worth something like their face value; but the crops were unusually short, and said notes were worth only about 50 cents on the dollar, and at the time of the trial it was agreed that Sweet was unable to pay all of his creditors, and was insolvent.

On October 19, 1910, plaintiff in error filed suit against the said Sweet on a promissory note in the sum of $1,695.34, and interest thereon, and at the same time caused a writ of garnishment to be issued, which was served upon the defendants in error on the 20th day of October, 1910. On the 20th day of December, 1910, plaintiff in error recovered in said suit its judgment against said Sweet in the sum of $1,883.60, with costs of suit and interest at the rate of 8 per cent.

The evidence indicates that there was no intentional fraud upon the part of the defendants in error in purchasing said mer

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

chandise, or on the part of said Sweet in making the sale, and while there is no distinct finding of fact by the trial court, or in the statement of facts to this effect, we will assume such to be true in the consideration of the issues. In making the purchase of said merchandise, the defendants in error did not at least 10 days prior thereto, or at any time prior to the sale, make inquiry of the said Sweet, the transferrer of said goods, as to the names and places of residence, or place of business of each and all creditors of said Sweet, and the amount owing to each said creditor by him, or obtain from him a written answer in any form to such inquiries; nor did they 10 days prior to said purchase, or at any other time before said sale, notify each of the creditors of said Sweet of said proposed sale and transfer. The plaintiff in error had no notice of said proposed sale at any time before it occurred, and the bulk sales statute of 1909 was not complied with in any form in making said sale. Defendants in error, who were the garnishees, answered said garnishment suit to the effect that they were not indebted to said Sweet in any amount at the time said writ was served, or afterwards, nor at the time of answering the same, and that they did not have any of his effects in their possession. Plaintiff in error contested this answer, alleging both that they were indebted to said Sweet, and that they had effects of said Sweet in their possession at the time said writ was served, in that they purchased the stock of goods without complying with the bulk sales statute. The plaintiff in error did not allege that the defendants in error had sold said merchandise prior to the service of the writ of garnishment, and the defendants in error did not file any special exception to said pleading for said omission, but the defendants in error by their second special exception excepted to said pleading,

as follows:

"Because it appears from said controverters' affidavit that plaintiff is endeavoring to hold these garnishees liable for property that has passed out of their possession, on the ground that they should be held as trustees for property wrongfully received by them."

In section 10 of the agreed statement of facts it appears that it was proven at the trial that the defendants in error, who were the garnishees, had sold all of said goods, wares, and merchandise prior to the service on them of the writ of garnishment, and that they had realized from same at least as much as they had paid for them. It does not appear which party to the suit introduced the evidence, and neither does it appear that either party to the suit objected to its introduction. It also appears that in their sixth assignment of error the defendants in error assert the fact of sale by them prior to the service of the writ of garnishment, and ask relief because of that fact, claiming that, having already sold the property before the service of the writ, no lien at

tached, and no liability arose against them. Upon the trial of the case in the court below plaintiff in error awarded judgment against the defendants in error for the sum of $1,094, with 6 per cent. interest from the date of said judgment, which is the amount that was paid by defendants in error to Sweet as a part of the consideration for the transfer; but the trial court did not enter a judgment against the defendants in error for the full amount of the plaintiff in error's judgment against Sweet, which was $1,883.60, and the plaintiff in error's cross-assignment complaining of the failure of the trial court to render judgment against the defendants in error for the full sum was abandoned on motion for rehearing in the Court of Civil Appeals. The judgment of the trial court was reversed and remanded by the honorable Court of Civil Appeals for the Third District, with instructions that a reasonable attorney's fee be allowed by the court below in favor of the attorney for the defendants in error; said court holding that the writ of garnishment was served too late to be effective, on account of the resale of merchandise before its service.

[1] The bulk sales law, so far as material to a correct determination in this case, is as follows:

"Section 1. That any sale or transfer of any portion of a stock of merchandise otherwise than in the ordinary course of trade in the usutransferrer's business; or a sale or transfer al and regular prosecution of the seller's or of an entire stock of merchandise in bulk, shall be void as against creditors of the seller or transferrer unless the purchaser or transferee shall at least ten days before the sale or transfer, in good faith make full and explicit inquiry of the seller or transferrer as to the name and place of residence or place of business of each and the amount owing to each such creditor by and all creditors of the seller or transferrer, the seller or transferrer, and obtain from the seller or transferrer a written answer to such inquiries, which answers shall be sworn to by the seller or transferrer; and unless the purchaser or transferee at least ten days before the sale or transfer in good faith, notify or cause to be notified personally or by registered mail each of the seller's or transferrer's creditors of whom the purchaser or transferee has knowledge, of said proposed sale or transfer.

"Sec. 2. Any purchaser or transferee who shall conform to the provisions of this act shall itor of the seller or transferrer for any of the not in any way be held accountable to any credgoods, wares or merchandise that have come into the possession of said purchaser or transferee by virtue of such sale or transfer. "Sec. 3. Nothing in this act shall apply to sales by executors, administrators, receivers or any public officer conducting a sale in his official capacity, nor to a sale or transfer of stocks debts where all creditors share equally and of merchandise for the payment of bona fide. without preference in the sale or transfer or the proceeds thereof." Acts 31st Leg. c. 27.

The defendants in error assail the constitutionality of the act. If the act is an unreasonable restraint of the natural rights of the owners of merchandise over their control and use of their property, and their right of contract connected therewith, it should be held unconstitutional; but, if it is merely a

proper exercise of the police power of the state in a wholesome restraint upon the said natural rights for the common good, then the said act would not be repugnant to the organic law. An unreasonable restraint of the natural rights of the owners of merchandise over the control and use of their property, and their right of contract connected therewith, would be intolerable, and violative of rights guaranteed under the Constitution; but a wholesome restraint upon the natural rights of such owners for the common good would be within the police power of the state, and therefore valid.

The identical question involved here was before this court in the case of Nash Hardware Company v. Morris, 105 Tex. 217, 146 S. W. 874. In that case the conclusion was reached by this court, speaking through the late Chief Justice Brown, that the act was within the police powers of the state, and was a reasonable regulation, and not in violation of the Constitution. We approve the holding in that case, and overrule the assignment which assails the constitutionality of the act.

[2] Passing from this we will now consider the important question as to the effect of the service of the writ of garnishment upon the defendants in error subsequent to the sale of the merchandise by them, which they had purchased from Sweet. It is contended that the garnishment did not fasten upon either the property belonging to Sweet, or upon its proceeds after sale, for the reason, as asserted, that the property belonging to Sweet, which passed into the hands of the defendants in error, had been sold by them, and that the proceeds of the sale could not be reached by the writ of garnishment, and that the writ of garnishment would not be effective unless served before such sale. Upon the other hand, the contention is made that the writ of garnishment took effect and became a lien upon the proceeds of the sale of said merchandise.

In considering this question it should be remembered that the purchase by defendants in error from Sweet, however innocently intended, was in open violation of the bulk sales law, and, under section 1 thereof, "void as against creditors of the seller." There was, then, no real sale, in law, but merely a change of possession. The parties could not accomplish that which was prohibited by law. The possession was transferred from Sweet to the defendants in error, which left them holding it in trust for the benefit of Sweet's creditors, with the title still in Sweet. This necessarily follows as the result of the attempted sale being rendered void by the statute. A contract between citizens, however honestly made, cannot prevail as against a statute which prohibits the making of the contract. Either the contract or the statute must fall in such a clash, and

or more citizens of a state could repeal the state's laws by contract among themselves. Neither could they defy the state's laws, and expect the courts to uphold them. And if any one should suffer loss in the attempt, it should not fall upon a creditor who has been diligent to act within the law, but rather upon the ones who produced the situation and caused the loss.

Defendants in error had not the power nor the right to acquire title to this property as against creditors, for the statute in cases of this kind impounds and holds the merchandise for the benefit of the creditors of the seller. And since their act in attempting to purchase was void, it follows, as stated above, that the title to said property remained in Sweet, the seller, and did not pass to the defendants in error; and, when defendants in error sold said merchandise, the proceeds of said sale were subject to garnishment.

When the defendants in error sold the merchandise, the title to which remained by law in Sweet, they became indebted to Sweet for its value. Having sold and converted property which, in law, belonged to Sweet, it obviously follows that they owed him for its value. It is true, the law would not aid Sweet in recovering its value from the defendants in error; for, having acted in the sale in open violation and defiance of a statute, public policy would deny him a remedy, and leave the parties to the legal wrong where it found them. Especially would this be true since the statute in question, under the circumstances of this sale, holds the property for the benefit of Sweet's creditors, and the courts would not aid Sweet to withdraw it beyond their reach. But the plaintiff in error is not in the same attitude as Sweet. Not having participated in in the wrongdoing, the law would aid it to recover the fund set apart by statute for creditors. Now the evidence shows that the defendants in error sold the merchandise for at least as much as they agreed to pay for it. In other words, the evidence shows that the defendants in error sold Sweet's property for at least as much as $6,005.97, and at the time the writ of garnishment was served they still were indebted to Sweet in said sum, and the garnishment fastened upon said fund.

The identical question presented here has not been adjudicated by this court in connection with the bulk sales statute. In other jurisdictions the authorities appear to be somewhat in conflict, but the weight of authority is to the effect that, when one purchases merchandise in violation of the bulk sales law, he holds the property, not for himself, but as trustee for the seller's creditors, who may reach the trust fund by writ of garnishment, even though the purchaser has paid full value for the merchandise and has

« ÀÌÀü°è¼Ó »