152 Mo. 350 | Mo. | 1899
During the middle and latter part of February, 1892, the plaintiff in this case, together with some sixteen other creditors of Stephen J. Burns & Company, began suits by attachment, and levied upon and seized certain property in the hands of the interpleader herein, Harry S. Piggott, as the property of said Stephen J. Burns & Com
“Plaintiff for answer to interplea of Harry Saxton Piggott in the above entitled cause admits that it brought the attachment and levied upon the property mentioned in said interplea, and denies each and every other allegation in said interplea contained.
“Further answering said interplea, plaintiff states that on or about the date this attachment was filed, the following parties filed in the office of the clerk of the circuit court of Buchanan county, Missouri, their several attachment suits against the defendants herein for amounts respectively as follows, to wit:
Eush & Sprague........................$ 2,944 83
Kelly & Lysle Milling Co.................. 5,523 57
Bangs Milling Co........................ 3,052 11
W. H. Stokes............................ 3,674 50
J. H. Mapes"............................ 418 60
Stillman, Wright & Co..................... 1,410 00
The Crosby Eoller Mill Co.................. 2,099 63
Wagner & G-ates Milling Co................ 10,417 79
E. D. Hubbard.......................... 4,406 10
Platte City Mill Co........................ 660 00
Lexington Mill & Elevator Co.............. 1,634 00
Bowersock' Milling Co..................... 465 00
Wm. Pollock Mill & Elevator Co............ 1,778 49
B. F. Harpster.......................... 712 20
Hoffman & Son........................ 1,130 00
Wamego Mill Co...........................
Glasgow Milling Co........................$ 1,371 55
*358 “The affidavits for attachment in said several suits alleged grounds substantially the same as those alleged in this suit, and that at the time this attachment was sued out, defendants were indebted to plaintiff herein in the sum of three thousand and fifty-two dollars and eleven cents. To said other parties above named in the amounts herein above set opposite their names respectively:
“To Salina Mill & Elevator Co. for about $22,000.
“To Combe Planting and Lithographing Co. for about $800.
“To Cain Milling Co., for $1,312.47.
“To various other parites in sundry amounts; all for merchandise recently theretofore by them bought and procured by means and in pursuance of, the fraudulent scheme herein set out.
“Plaintiff states that defendants did on the 10th day of February, 1892, execute a certain deed of trust in the nature of a mortgage to Iiairy Saxton Piggott, party of the second part, trustee for Ayr Lawn Company and National Bank of St. Joseph, parties of the third part, on certain property described as follows, to wit:
“All of the grain and stock of material now on hand in the mill and warehouse of said first party, together with all flour, oatmeal and other goods, wares or merchandise now in and about said mill and warehouse, situated on lots one, two, three, four, five and six in block twenty-six, Bobidoux’s addition; also forty car loads of flour, more or less, stored in said mill and warehouse the following described personal property, to wit, about 5,000 wood knocked down boxes, about 300,000 paper boxes, about 5,000 labels ‘St. Joe Flake,’ about 5,000 labels ‘Aunt Sally;* about 20,000 empty sacks, about four car loads of feed, a lot of wheat flour and self-rising buckwheat, two desks, one safe, three wagons, two mules, one elevator, one truck, scales, one wagon scales, eight small scales, also about six car loads of flour stored in the building known*359 as No. 615 South Seventh street, being the same building once occupied by Condon-Eiley & Company, situated on the east side of Seventh street about 200 feet south of Messaine street, also about eighteen car loads of flour stored in the building at northeast corner of Third and Oharles streets, known as the Eiley building, all of said property being in the city of St. Joseph, Buchanan county, Missouri.
“And that this deed of trust in the nature of a mortgage contained among others, the following provisions, to wit: ‘The possession of all said property is now herewith given said party of the second part with power and authority to hold, manage control and change the form thereof, and sell or otherwise convert the same into money in any way or manner that to said (Second party may seem necessary or advisable for the interest of all parties concerned, and all changes and moneys arising from any act of the said second party, shall be held by him subject to the trust hereinafter mentioned as though no change had been made.’
“And the only defeasance clause in said deed is as follows. ‘Now, therefore, if the said party of the first part, or any one for him, shall well and truly pay off and discharge the debt and interest expressed in said notes, and every part thereof, when the same becomes due and payable according to the true tenor, date and effect of this instrument on the day that the last of said notes becomes due and payable, being the 10th day of April, the time for payment of said notes is herewith extended to said 10th day of April, 1892, then this deed shall be void, and the property. hereinbefore conveyed shall be released at the cost of the said party of the first part; but should the party of the first part fail or refuse to pay the said debt, or the said interest or any part thereof when the same or any part thereof shall become due and payable according to the true tenor; date and effect of this deed of trust, on the 10th day of April, 1892, as aforesaid, then this deed shall remain in force.’
*360 “The said trustee, Harry Saxton Piggott, immediately upon the execution and delivery of said deed of trust in the nature of a mortgage, took possession of all said property so conveyed and retained possession thereof until it was taken from him by the sheriff of Buchanan county under the several writs of attachment issued at the instance of the several attaching plaintiffs above named.
“Plaintiff states that the defendants, Burns & Company, did on the 10th day of February, 1892, execute a certain deed of trust in the nature of a mortgage in which Jefferson Hosea was party of the second part, trustee for Ayr Lawn Company, party of the third part, upon the following property, to wit: Lot .number nine in block thirty-three original town now city of St. Joseph, subject however, to deed of trust heretofore made by said party of the first part; also a certain, leasehold estate, being the lease on lots one, two, three, four, five and six in block twenty-six, in Robidoux’s addition, an addition to the city of St. Joseph, and being the same property now occupied by said party of the first part by virtue of the terms of the lease executed June 8th, 1889, by the Chicago, St. Paul & Kansas City Railway Company to said first party, recorded in book 194, page 520, in the office of the recorder of deeds of Buchanan county, together with all the appurtenances, fixtures, machinery and miller’s outfit thereon situated, part of which machinery is subject to a deed of trust of chattel mortgage heretofore made.
“The said property was the mill lately conducted by defendants, Burns & Company, and that the said deed of trust in the nature of a mortgage contained among others the following provisions, to wit: 'Now, therefore if the said party of the first part, or any one for him, shall well and truly pay .off and discharge the debt and interest expressed in said note and every part thereof, on or before the 10th day of April, 1892, to which time payment of said note is extended, then this deed shall be void and the property hereinbefore con*361 veyed shall be released at the cost of the said party of the first part; but should the party of the first part fail or refuse to pay the said debt or the said interest or any part thereof, when the same or any part thereof shall .become due and payable according to the terms of this deed of trust, then the whole shall become due and payable, and this deed shall remain in force,’ which provision is the only defeasance in said deed.
“That the pretended debt apparently evidenced by the notes mentioned in said deed was wholly fictitious.
“Said trustees, Harry Saxton Piggott and Jefferson Hoséa, immediately upon the execution and delivery of said deeds of trust, took possession of all said property so conveyed and retained possession thereof until it was taken from them by the sheriff of Buchanan county under the several writs of attachment aforesaid.
“That on the 9th day of February, 1892, said Stephen J. Burns and Martha Burns, his wife, conveyed to John E. H. Sibbald, trustee for one "William J. Hunter, lot nine in block forty-four in the original town, now city of St. Joseph, Missouri. That said deed purported to be given to secure an indebtedness of thirty-five hundred dollars, but it was in fact . wholly voluntary and is only a part of the fraudulent schemes and designs herein set out.
“That defendants by voluntary and fraudulent conveyance, conveyed away, and by other fraudulent means concealed all the rest of their property in furtherance of and as a part of the fraudulent scheme herein set out.
“That nil said conveyances were made by defendants with the design to hinder, delay and defraud their creditors and among others this plaintiff, all of which was well known to and participated in by said trustees and cestuis que trust.
“Plaintiff states that about ninety days before the filing of said deeds, defendants, Burns & Company, in furtherance of designs previously formed to defraud this plaintiff and others, began buying and did buy then and thereafter con*362 stantly up to the 10th day of February, 1892, large quantities of flour and other merchandise, including that on which the said debt of plaintiff is founded, amounting in value in all to over eighty thousand dollars.
“That said flour and other merchandise were bought on credit, without any intention on the part of Burns & Company of paying for the same, and in quantities much beyond their ability to pay for, and with the purpose and design of converting the same to their own use, and to the use of the interpleader and the other parties to the deeds of trust herein-before set out.
“That the trustees and cestuis que trust in the deeds of trust herein, were well aware of said purpose and design of defendants and aided in and abetted them in carrying same into execution. That said trustees and cestuis que trust knew that large quantities of flour and other merchandise were being received as aforesaid, by said Burns & Company, and that the purpose and intention of said firm was to convert it and turn it over to them, which said purpose and intention was consummated by turning over the said flour and other merchandise to the Ayr Lawn Company, National Bank of St. Joseph, Jefferson ITosea, Harry Saxton Piggott, this interpleader, John E. H. Sibbald and William J. Hunter, the trustees and cestuis que trust aforesaid, who together with their agents in that behalf well knew when said flour and other merchandise was being purchased, that the sellers thereof were not to be paid therefor, and who, when they took the same for their suppositious indebtedness, well knew that said flour and other property had not been paid for.
“It is a fact and was known by said trustees and cestuis que trust so to be that during said ninety days, defendant Burns & Company, although having on hand large quantities of flour and other merchandise largely in excess of the needs of their business and in excess of what said firm usually carried, or the market required, were by letter, telegram and other*363 wise hurrying forward said flour and other merchandise in pursuance of said fraudulent design of getting the same into their possession before the claim therefor matured, in order to enable them to convert and wrongfully appropriate it as aforesaid. And further aiding and abetting defendants’ design and fraudulent scheme aforesaid, the Ayr Lawn Company, National Bank of St. Joseph, Jefferson Hosea, Harry Saxton Piggott and John E. H. Sibbald, demanded, accepted and received from common carriers and others in St. Joseph, flour and other merchandise shipped to said Burns & Company, which reached St. Joseph after the execution and delivery of the conveyances hereinbefore set forth, and after the delivery to said trustees of the possession of the property transferred by said deeds.
“That said Burns & Company were during said ninety days, and for a long time prior thereto had been, customers of said National Bank of St. Joseph, which was and during all said times had been familiar with the business affairs, and especially with their financial transactions and conditions; and further abetting the fraudulent scheme of defendants, and their intent and design to hinder, delay and defraud their creditors, the said bank concealed their financial condition and gave them a fictitious standing, and thereby induced creditors among others, this plaintiff, to extend credit to the defendants.
“That about thirty days before the filing of said deeds, defendants still further carrying out said fraudulent scheme, put said John E. H. Sibbald into possession of a large amount of flour and other merchandise procured by them as aforesaid, and induced him to pretend to be carrying on business in that line, whereas, he was in fact aiding said Burns & Company in carrying out said fraudulent scheme, and they did, through him, dispose of large quantities of flour and other merchandise for cash and on credit for the purpose of putting said flour and other merchandise and the proceeds thereof beyond the reach of this plaintiff and other creditors, and to hinder, delay*364 and defraud them in the collection of their debts. That said Sibbald, who is a son-in-law of defendants, took part in this scheme and with the knowledge and collusion of said other trustees and beneficiaries opened' up a pretended business in said line in St. Joseph, Missouri, and aided defendants in the manner above set forth in carrying out their fraudulent scheme aforesaid.
“The said Ayr Lawn Company and National Bank of St. Joseph, have substantially the same stockholders, directors and officers and are under the same control and management.
“That the trustee, Jefferson Hosea, named in said deed of trust hereinbefore set forth, is an attorney at law connected with the firm of Spencer, Bums & Mosman, who are attorneys for, and interested in the National Bank of St. Joseph, and Ayr Lawn Company, and are and were attorneys for defendants.
“The said trustees, Jefferson ITosea and Harry Saxton Piggott were not nor was either of them by the terms of the instrument creating their trusts, required to give any bond for the faithful performance of said trusts, and they are and were irresponsible, incompetent and inexperienced in the conduct and management of the business intrusted to them, and in the sale and disposition of the property conveyed to them by the deeds aforesaid.
“That in connection with the business of Burns & Company, and among the assets of said firm, were many valuable accounts, bills receivable and other dioses in action; that the books in which the same are recorded and kept, have been spirited away and concealed by said Burns & Company, in furtherance of said fraudulent scheme and designs, and with the knowledge and collusion of said trustees and beneficiaries, and although demand and diligent search for the same have been made by the sheriff, he has not been able to find them.
*365 ■ “Plaintiff states that in truth, no consideration for said deeds passed from said Ayr Lawn Company, The National Bank of St. Joseph, John E.-H. Sibbald, Jefferson Hosea, and 'Harry Saxton Piggott or William J. Hunter, or either of them, but that said conveyances were fraudulent and without any consideration and were made for the purpose' of hindering, delaying and defrauding the creditors of said Burns & Company, of which purpose the Ayr Lawn Company, The National Bank of St. Joseph, Jefferson Hosea, Harry Saxton Piggott, John E. H. Sibbald and William J. Hunter, each and all were fully conversant at the time said conveyances were made.
“That any possession of the goods herein claimed by the interpleader which the interpleader held for ór as agent or otherwise was in consummation of and a part of the fraudulent scheme and design hereinbefore set out.
“Wherefore, plaintiff prays that the property levied on as aforesaid be held to its said attachment, and for all proper relief.”
To this answer the interpleader filed a reply, which will be unnecessary to detail at this time, further than to say all allegations of fraud on part of the trustees, and the beneficiaries are denied.
As was suggested, this is one of a series of suits, involving about the same state of facts that have grown out of the levy and seizure by numerous creditors of Stephen J. Burns & Compány, of property in the possession of the interpleader herein, Harry S. Piggott. One of those cases, Stokes v. Burns, Piggott, interpleader, has been tried and on appeal to this court the judgment in favor of the interpleader in the circuit court was affirmed. [See report of case in 132 Mo. 214.] Another, that of Mapes v. Burns, Piggott, interpleader, was tried and taken on appeal to the Kansas City Court of Appeals where a like judgment in favor of the interpleader was affirmed. [See 72 Mo. App. 411.]
In the Stokes case, plaintiff’s chief contention was that if the conspiracy was as .alleged in his answer, it not only rendered the purchase of the flour and provisions by Burns & Company voidable at the election of the defrauded vendors, but also in some manner incapacitated the bank and the Ayr Lawn Company from taking said flour from Burns & Company as against their general creditor.
In that case, although the answer charged that the debts of the bank and Ayr Lawn Company were fictitious and dishonest, little or no effort was made to establish that allegation, except to argue that proof of the fraudulent participation by the bank and Ayr Lawn Company, with Burns & Company, in the purchasing of said flour from plaintiff and others, had a
In this case while not so much effort was made or time spent to prove fraud on the part of Burns & Company in the original purchase of the flour in controversy, or to prove the conspiracy set up in the answer, between Burns & Company and the officers of the bank and the Ayr Lawn Company, or any participation therein by the bank and the Ayr Lawn Company, and more time was given in an attempt to show that there was actual fraud in the conveyance by Burns & Company to the interpleader for the use of the bank and Ayr Lawn Company, appellant still contends that the testimony that was offered tended to prove the fraud on part of Bums & Company in the purchase of the flour, and was also offered as showing the participation in that fraud by the bank and the Ayr Lawn Company, and that these facts in some way operate as an impeachment of the honesty of the indebtedness held by those two institutions against Burns & Company, so far as same affect their attachment creditors.
If it be conceded that Burns & Company did purchase large quantities of flour of the plaintiff herein, and others, not intending at the time to pay therefor, we fail to find in this record any fact or facts, or circumstances from which the fact
If, however, the doctrine announced in the Stokes case is it be adhered to, then all that part of plaintiffs answer, as well us the testimony offered in the attempt to show the knowledge of and participation by the bank and the Ayr Lawn Company in the fraud committed by Burns & Company in the original purchase of the flour in controversy, was improper in this character of a suit. If the officers of the bank and the Ayr Lawn Company knew of and assisted Burns & Company in perpetrating a fraud upon-their various customers by representing them to be of good financial standing and otherwise aided them by giving to them a standing and rating that they were in no wise entitled to, whereby they were enabled to buy up the lai’ge quantity of flour (that afterwards found its way into the hands of Piggott for the use of the bank or the Ayr Lawn Company) as against the general creditors of Burns & Company, they were not incapacitated from after-wards purchasing said flour or taking it as security for valid debts due and owing to them; and in this character of an action those questions do not properly arise, and the recitation of the existence of those facts by plaintiff in its answer, and the attempted proof of their existence were both useless and unavailing. Each lot of flour after it was purchased, was the property of Burns & Company, against the whole -world, except only the defrauded vendors; and Burns & Company could convey the title to it to whomsover they chose, provided
In this character of action the sole contest is, who owned the flour on the day of the issuance and levy of the writ of attachment herein. The interpleader claims it under and by virtue of the deed of trust made to him by Burns & Company, on the tenth day of February, 1892, to secure the alleged indebtedness due to the bank and the Ayr Lawn Company by said Burns & Company. The plaintiff claims and asserts and to recover necessarily must show and prove title to the' property still in the defendants Burns & Company, notwithstanding the deed of trust; that the deed of trust was made in fraud of the rights of said plaintiff, and other creditors of said Burns & Company, and that the property for that reason is. still in law the property of Burns & Company to satisfy their general creditors. No issue as to the fraud in the original purchase from plaintiff of some undefined and unknown portion of the general stock of flour conveyed to Piggott can be here made. In fact, no claim is made that any definite or particular part or parcel of the flour sold by plaintiff to the defendants Burns & Company, is included in the property covered by the deed of trust. The fact to be determined then is, was the eon
By its action upon the account for the flour sold and delivered the appellant has affirmed its sale to the defendants Burns & Company, and it will not now in this suit by attachment on the account, or one growing out of and constituting a part thereof, be allowed to try the case as if it had dis-affirmed the sale, and was trying to assert title to the flour by reason of the original fraud that entered into the purchase thereof by Burns & Company, or Burns & Company in' conjunction with others.
The two positions are utterly at war with each other, and can not be asserted at one and the same time, in one and the same action. To sustain the latter position, that the flour in controversy was not the property of Burns & Company to dispose of as they might desire, on account of the original fraud (on their part) in its purchase, would be to defeat the original suit on the account for the sale of the flour and necessarily defeat the right of the officer to hold the property by-virtue of the writ of attachment issued in aid of said suit on the account.
While the plaintiff on account of the fraud alleged in its answer; might have had either of two remedies against defendants that it chose to pursue, yet those remedies are not concurrent, but separate and distinct, and proceed upon theories antagonistic to and at variance with each ether. The one proceeds upon the assertion of the existence of a sale and purchase, the other of a denial thereof on account of fraud. If plaintiff approve the sale he may proceed with his action upon the account, aided by attachment. By disapproving the sale, lie may sue for the particular property sold, if same can be found and identified, but the two suits can not be prosecuted
But with that as an additional remedy open to plaintiff, it is wholly unavailing in this action for the claim and delivery of the property in controversy in a suit that by statute has been permitted to be injected into and become engrafted upon plaintiff’s suit by attachment upon the account for the purchase price of the flour sold by plaintiff to the defendants Burns & Company.
Again, we can not understand under the facts of this controversy how the plaintiff can be heard to complain of the fraud of Burns & Company, either by themselves or in combination and conspiracy with others, in the purchase of the property herein involved. None of the flour sold by the plaintiff is identified as the flour covered by the Piggott deed of trust. While the statute on fraudulent conveyances was intended for the protection of creditors, to the extent of making void against them, conveyances by their debtor intended to hinder, delay and defraud them in the collection of their debts, still conveyances to debtors are wholly unaffected by that statute. By what right either of statute or at common law can a creditor complain because a debtor fraudulently procured property to be conveyed to himself; because he has become possessed of additional property out of which the creditor may be able to enforce his debt and the debtor to discharge his obligations more readily ?
The fact that Burns & Company purchased large quanti
As a second reason assigned by appellant why this case should be reversed, it asserts that there was evidence tending to show that the deed of trust was made in part at least, for the use and benefit of the grantor Burns & Company, and for that reason should have been declared ovoid as to their creditors. The act complained of under this head is thus stated in appellant’s brief. “The National Bank of St. Joseph permitted Burns & Company to overdraw their account from the 8th day of December, 1891, to the 10th day of February, 1892, to the extent of $8,511. On the last named date, the date of the deed of trust, the bank took their note for $9,000, and this is one of the notes secured by the deed of trust. This note overpaid the overdraft and placed to the credit of Burns & Company, $469. In other words the bank paid this amount
In the Mapes case, that was tried upon the same state of facts as are. presented here, the Kansas City Court of Appeals, in disposing of the same contention made by appellant here (page 425), say: “If, now, there was any proof that this $469.45, or any considerable portion thereof was paid over to the debtor” (Burns & Company) “then the insistence-of plaintiff’s’counsel would be of some avail — notwithstanding-its insignificance when compared with the magnitude of the-transactions......This would be a conveyance to the use of the grantor and void under the statute of fraudulent conveyances.” Proceeding with the discussion of the case upon that point the court of appeals, however, disposed of the case adversely to appellant’s contention on -the facts, using the following language: “But the weakness of this point is manifest from the consideration of other conceded facts and the utter-absence of any evidence to prove that Stephen J. Burns received any part of this $469.45.” "Without detailing the facts and circumstances, that led the court of appeals, as this court, to the conclusion, that there was a want of testimony to prove that Stephen J. Burns & Company received the-$469.45, or any part thereof placed to their account upon the books of the bank, when the previous overdrafts of Burns & Company from December 8, 1891, to February 10, 1892, at the bank were liquidated by the note for $9,000, made on the day the deed of trust was given, and included therein, as one-of the secured debts in favor of the bank, we are disposed to-think that even though the facts be considered, as stated by appellants in their brief, that the bank did pay to Burns & Company the $469.45 that was placed to their account on the-books of the bank, and that it was paid to procure the execution of the $9,000 note and the deed of trust securing it (and the other notes therein named), and that Burns & Company
In what manner and to what extent did that act withdraw from the plaintiff or the other creditors of Burns & Company, property or money or anything of value, which but for the act they or any of them could have subjected to the payment of their debts in whole or in part ? If by the act complained of nothing could have been or was .taken from the plaintiff or the other creditors of Burns & Company, but that which Burns & Company had the right to convey to Piggott for the use of the bank and the Ayr Lawn Company, then the act could not be said to fall within the ban of the statute against fraudulent conveyances. A grantor can never be subject to the condemnation of a statute, when he does that which the statute expressly sanctions.
Nor is the act of performance in anywise to be impeached because the creditor was an active agent in bringing about that result, or caused it to be accomplished by a moneyed consideration moving from the bank to Burns & Company, rather than by persuasion or by the voluntary choice of the debtor wholly unsolicited by the preferred creditor. If the right of preference is to be recognized (as it is in this State), then the right to secure that preference by any rarticular creditor can not be questioned by others, so long as he confines his efforts to the accomplishment of that end, and nothing more. That a creditor can not buy or receive absolutely from the debtor, property free from the claims of other creditors, beyond the limit of value of his indebtedness, is unquestioned; but to that limit, there are no restrictions, and within that limit nothing of value is withdrawn from the creditor that the
Here, as in the Mapes case, the testimony shows that at the time the $469.45 was placed to the account of Burns cfc Company on the books of the bank as the result of the settlement of the overdrafts, by the giving of the last named note for $9,000 secured by the deed of trust in controversy, the defendants Burns & Company were then actually indebted to the bank and the Ayr Lawn Company in the aggregate sum of $56,530.55, $48,000 of which was evidenced by nine notes of varying dates and amounts, and $8,530.55, on account of overdrafts made by Burns & Company upon the bank, that had been paid by that institution. Now if in the settlement of those overdrafts by note, Burns & Company exacted of the bank as a consideration therefor, a further loan of $469.45 to be included in the note liquidating the overdrafts; or if we consider that the $469.45 placed to the account of Burns & Company on the books of the bank, as a payment made by the bank to Burns & Company, to procure the preferences as obtained by the deed of trust securing the original notes for $48,000, and the last note for $9,000, or as a voluntary gift by the bank to Burns & Company, still that act was not violative of the statute against conveyances for the use of the grantor, in view of the further well established fact in this case that the aggregate of all the property conveyed to the interpleader by the deed of trust in controversy, together with all the other property turned over and assigned direct to the bank and the Ayr Lawn Company by Burns & Company, to secure and pay their said indebtedness, was only about $43,000, $13,000 less than the bank and the Ayr Lawn Company were entitled to have received, not counting the $469.45, and about $4,000 less than they were entitled to recover if we fail to consider the last $9,000 note in which the $469.45 transaction, however considered, was included.
The $469.45 transaction, considered from any point of view that has been suggested by appellant, or as indicated by
The sole purpose and object' of the statute on the subject of fraudulent conveyances is to secure the appropriation of the debtor’s property to tire payment of his debts; not all of his debts, however, but such part thereof as he can and prefers to pay, else all preferences would be prohibited. When, therefore, the result of any given conveyance is to appropriate the property conveyed at a fair valuation to the payment of an honest indebtedness or a part thereof, it can not fall within the condemnation of the statute, for, as said above, what the law directly sanctions it will not by indirection condemn.
So long as the entire property conveyed is subjected to the payment of some honest debt of the grantor, the conveyance is honest and lawful. So long as nothing is taken from the creditors of the grantor, the transaction can not be fraudulent against them, and so long as the property is subject to the payment of an honest debt, it can not be said to be withdrawn from the creditor of tire grantor.
It is the property that the debtor conveys or purports to Convey, that must give character to the transaction, that must determine whether or not the act falls within the prohibition of the first section of the statute on fraudulent conveyances for the use of the grantor. It is not claimed that any part of the property included in the deed of trust to Piggott or any-of what was turned over or assigned direct to the bank and the
Appellant makes the further contention that the evidence in the case tended to show that part of the indebtedness secured by the deed of trust to the interpleader was fictitious and for that reason the deed of trust was void and that issue should have been submitted to the jury. This contention is predicated in part upon a statement made by Stephen J. Burns t'o the effect that he thought he had paid to the bank either a $4,100 or a $6,000 note, during the month of February, 1889, by means of a check drawn upon the bank, and this was followed up by appellant offering an exhibit of the books of the bank, showing the account of Burns & Company with the bank, and in which appellant claims that no payment as that named appears to have been entered to his or the firm’s credit. While these two circumstances, if standing alone, undisputed and unexplained, might have been sufficient to have warranted the jury in finding that one of the notes named in the deed of trust had been paid, or at least that one of the number of notes held by the bank and included in the deed of trust should have been credited with that amount, and to that extent treated the debt as fictitious, yet when it is considered that Stephen J. Burns gave that statement as a mere opinion without being
In various ways debit and credit entries in the books of the bank showing its account with Burns & Company, have been manipulated by appellants with a view of discrediting their accuracy and of impeaching in some vague way the
Appellants urge as a further ground of error on part of the trial court its action in excluding a part of the deposition of Stephen J. Burns relating to a transaction between himself and his daughter and son-in-law, that took place at or near the samo time as the executing of the deed of trust in controversy, upon the theory as they contend and argue, that to establish the fraudulent intent it was competent to produce evidence of other fraudulent conveyances made at about the time of the conveyance under consideration. While it may be said that no rule of evidence is better settled in this State now, than the one that permits evidence of fraudulent transactions by the same party of a similar character at or near the same time in order to show the fraudulent intent of the party in the transaction under investigation, the rule has no application to the action of the trial court in excluding that part of the deposition of Stephen J. Burns in this case, for the two-fold reason that (first) the evidence excluded was all to the effect that the transaction between Stephen J. Burns and his daughter and son-in-law were free from fraud and grew out of an honest transaction and had no tendency to prove fraud, and (secondly) there was no evidence or offer of evidence that the interpleader or any one connected with the bank or the Ayr Lawn Company was a party to or in any manner connected with the transactions, which Burns was detailing in his deposition, and
The only effect off such testimony would have been to have confused the mind of the jury with irrelevant matter, and the trial court acted properly in excluding it from their hearing.
Complaint is also made by appellant to the action of the trial court in refusing to permit it to use a transcript of the evidence of Calvin E. Burnes previously taken in the case of Bowersock v. Stephen L Burns & Company, in the Clinton Circuit Court, the witness Burnes having been shown, at the time of giving his testimony in that ease, to have been president of the beneficiary bank named in the deed of trust in controversy. We fail to see from the transcript of the testimony offered how it could have in any wise been beneficial to appellants; but considering it as containing according to appellant’s contention, a detrimental admission to the claim of the bank, as to one of the notes secured by the deed of trust under which
The judgment of the trial court will be affirmed.