Blum v. Simpson, Case No. 5294

Case No. 5294 | Tex. | Apr 16, 1886

Willie, Chief Justice.

It is apparent, from the evidence, that the intention of I. A. McLure, in making the sale to Simpson, was to defraud his creditors, and the only question in the case is, did Simpson know of this intent, or have notice of such facts as would excite the suspicions of a man of ordinary prudence, and put him upon inquiry as to the reason and motives of the vendor in making the sale? Mills v. Howth, 19 Tex., 259; Traylor v. Townsend, 61 Tex., 146.

The evidence does not show that Simpson had any actual knowledge of McLure’s design in selling out his property, or of any debts existing against him. We have only to inquire, therefore, as to whether he was in possession of sufficient facts to arouse his suspicions as to the fraudulent intent of McLure in selling out his property.

It was shown that the property was sold for less than it was worth. This was what induced Simpson to buy it. The sale was out of the usual course of trade, and made without any inventory of the goods having being taken. McLure appeared to be doing a prosperous business at the time, and had just bought goods to replenish his stock. Why a merchant, apparently doing a good business, should suddenly propose to sell out, not only his stock on hand, but newly purchased goods not yet arrived, at a price below their value, together with the house where he was doing business, and, so far as the purchaser knew, strip himself of all property liable for the payment of his debts, was a question which would have suggested itself to almost any one contemplating a purchase of the property. But the fact in this case was rendered more suspicious for the reason that the seller required that the purchase money not paid in cash should be secured by notes, not made payable to himself, but to his brother, living in a distant state; and not only so, but that they should be made payable to bearer, instead of to the order of the payee. It must have occurred to the purchaser, that something so unusual was required for some special purpose. It must have occurred to him too that McLure might have intended to give the notes the appearance of being the property of another, and yet, at the same time, reserve to himself the privilege of disposing of them, as he afterwards did, for his own benefit. The reason given by him for having this form given to the notes was a very poor one, viz.: that his brother Avas interested in the business. If these notes were to be sent to his brother in satisfaction of his interest in the property sold, it was certainly better that they should be made to his order ; if they were to be used for his benefit in whole or in part at the point where the transaction took place, there was no reason whatever why his name should be placed in them at all.

Simpson must also have known that if McLure had any creditors his purchase of the property deprived them of all legal recourse for their debts, and placed them at the mercy of the seller. He had reason. too. to believe that McLure owed defendants. He knew that McLure had purchased goods on credit; for, but a short time before, a commercial man had collected a debt from McLure by taking six bales of cotton in payment of it. Hot only so, but, at the very time the trade for the property was first proposed by McLure’s clerk to Simpson, McLure himself was in Galveston purchasing goods; and Simpson knew, before the trade was made, that he had bought goods there, for they were in transit at the time and included in the sale. These were circumstances rendering it probable that McLure was indebted at the time he disposed of all the estate he had subject to execution.

Taking all these circumstances in connection, it does seem that there was enough to arouse a suspicion in the mind of any prudent man that there was an intention on the part of McLure to dispose of his property in such way that, if he had any creditors, of which there was great probability, they would be deprived of all power to enforce their claims against him. Tet he made no inquiry as to whether or not McLure owed debts, but said “it was none of his business, and he didn’t care. ’ ’ This showed a disposition on his part to make the trade and get possession of the property at a low figure, no matter how much the seller’s creditors might suffer thereby. To meet this array of facts tending to put Simpson upon notice of McLure’s intentions, we are pointed, by appellee’s counsel, to the fact that the former inquired, before buying, as to whether there were any liens, mortgages or other encumbrances on the property, and that he even examined the records to ascertain in reference to that matter, and to the fact that he inquired why McLure wished the notes made payable to his brother. We regard these facts as rather strengthening the other testimony tending to show that Simpson’s suspicions were aroused as to McLure’s fraudulent intentions. He asked and examined the records as to liens, because he knew, if registered, they would affect his title, whether he knew of them or not; but he avoided asking as to other debts, because if he knew of their existence, he would be charged with notice of the fraudulent intent of his vendor. He showed his want of confidence in McLure by refusing to take his word as to the liens, and examining the record himself. His inquiry as to the reason why McLure wanted the notes made payable to his brother shows that he thought the requirement a singular one. He had never heard of this brother before.

We think the evidence presents an array of circumstances tending to put the appellee upon inquiry as to the fraudulent intent of McLure in making the sale to him, which are not affected by any of the facts which, it is contended, tend to show the fairness of the purchase. The verdict of the jury is so directly against the great weight of the testimony as to lead us to the conclusion that it must have been in some measure affected by the manner in which the case was presented to the jury by the counsel for the claimant.

The language of counsel, made the subject of the first assignment, was certainly not warranted by the evidence, and tended to prejudice the jury against the plaintiffs. It could not be excused on the ground that the opposite counsel had traveled out of the record in stating that McLure had been for a long time indebted to Leon & H. Blum, for the evidence showed this to be the case. Bills of exception to the use of this language were saved by the appellants, and they were made a ground of the motion for new trial. The fact that the plaintiffs’ counsel had an opportunity to reply did not affect the question, for it is not the policy of the courts to encourage a war of inflammatory and unwarranted words between counsel on the opposite sides of a cause.

Had the verdict not been against the great preponderance of the evidence, we might not have disturbed it, for the presumption would have been that it was not influenced by these remarks of the appellee’s counsel. But the finding is so little in accordance with the proof that it is highly probable the improper remarks had some influence upon the minds of the jury, and the judgment will be reversed and the cause remanded.

Reversed and Remanded.

[Opinion delivered April 16, 1886.]