E. L. B. Brooks v. Clayes

10 Vt. 37 | Vt. | 1838

The opinion of the Court was delivered by

Williams, C. J.

The present action is highly penal, as it inflicts on each of the parties offending a forfeiture of the full value of the property, attempted to be conveyed, besides making the conveyance void. Although the forfeiture is to be recovered by the person attempted tobe injured, yet it does not operate as an extinguishment of his right or debt. The statute is to receive a liberal construction, for the pulpóse of setting aside the conveyance, but to be construed strictly when it inflicts a penalty. It has been laid down that the rule of evidence must be the same, as in criminal cases. Full proof must be given, and the case must be established- beyond a reasonable doubt. A conveyance may be fraudulent so as to be inoperative and void, as against the ... ° „ creditors of the person making it, and yet, the penalty ol the statute not be incurred. To constitute the offence, there must be the wicked intent, the malus animus, at the time of the conveyance. This was evidently acknowledged by all the Court, in the case from 4 East, of Meux, qui tam, v. Howell & Atles. By subjecting’'every of the parties to a fraudulent conveyance, to the penalty, it appears that the intent must exist in the mind of the grantor and grantee ; that they _ both combine and intend to avoid the right, debt or duty of another. This seems to have been the view of the Court in Massachusetts, in the case of- Bridge v. Eggleston, 14 Mass. 245, and in Foster v. Hall, 12 Pick. 89.

The intent, with which such conveyance is made, is to be found by the jury. It is a question of fact, and cannot be made a question of law, whether the parties intended to deceive and defraud. These general principles are to be kept In view, in the examination of the case before us. The case comes on an exception to a particular part of the charge. It becomes, for that reason, necessary to inquire, whether that part is liable to the objections urged ; whether it was called for by the evidence, and whether -the plaintiff was entitled to such a charge, as he requested. Several expressions of the witnesses have been much commented on in the argument, whieh were designed to give a coloring to the transaction, and were, undoubtedly, urged to the jury, for that purpose, but they cannot be regarded on the question before us, which is wholly a question of law.

It appears that the testimony, on the part of the defendants, fended to show, that the purchase made by them was for a full consideration, and was intended as an absolute sale and purchase of the property in question.

The testimony, on the part of the plaintiff, tended to show a transaction of a different character, i. e. a conveyance on a secret trust, which, though absolute in its form, was not designed as sueh between the parties. Hence, the attention of the Court was directed to these two views of the case, as urged by the parties.

In either view, the intention of the parties, at the time of making the conveyance, and the character and tendency of the conveyance, as then understood by them, became important subjects of inquiry before the jury.

We do not perceive any objections to the charge of the Court, if the jury believed from the evidence, that the sale and purchase were absolute, and made in good faith. It is in relation to the other view of the case, taken by the counsel for the plaintiff, that the Court erred, if at all. If a trust was intended between the parties, it may be remarked, that if it was such as the law allows, although it is not expressed in the deed, the conveyance is not, on that account, to be considered fraudulent. Whether it would have been better if the law had been settled otherwise, is not for us to inquire. The several cases which have been decided in this Court, of Spaulding v. Austin, 2 Vt. R. 55. Gibson v. Seymour, 3 Vt. R. 565, and Williams & Putnam v. Parish & Orcutt, decided in Orange county in 1831, have established this principle, that a conveyance, absolute in its form, though intended in trust, is not, per se, fraudulent, although taking a conveyance in that form, and not expressing the trust in the deed, may afford strong evidence of a fraudulent intent. And it will result from this principle, that the decision in Gould v. Ward, 4 Pick. 104, must be recognized, viz. that an agreement on the part of the purchaser, to conceal the fact of his having purchased, is only evidence of fraud, but is not in itself a fraud. The jury were, therefore, very properly directed to inquire as to the intention of the parties, at the time of making the contract, and its character and tendency, as then understood by them. It has, however, beeii strenuously urged as an objection to the charge, that the jury were instructed that the fraud must consist in securing the property to Irish, to the ultimate exclusion of his creditors. We can discover nothing improper in this direction. A fraudulent conveyance is, when the intent of the parties is to cheat or defraud some third person, and when a benefit is designed for the grantor. It usually enters into the definition, and idea of a fraud, that there is a secret trust, for the benefit of the person making the conveyance.

Now, if there is a trust, for the benefit of the person making the conveyance, and the object and intent are to secure the whole amount of the property conveyed, to satisfy the rights of the creditors, although such conveyance may be inoperative, to effect the purpose intended, and may be void, as against creditors, yet, it cannot be said that the D J . . ..... parties to the conveyance are guilty criminally, and liable to the penalty of the statute, when they design the benefit, and not the injury of the creditors. Some of the creditors may be delayed, some one may be prevented from appropriating the whole ostensible property of his" debtor, to his exclusive benefit. The object and intent of every valid assignment is for the ultimate benefit of -the creditors, and yet, in its immediate effect, it delays or hinders some of them, and places'the-property of the assignor in such a situation, that it cannot be taken by execution or attachment. Such an assignment has, however, been upheld in our own Courts, in the Courts of the United States, and in those of Great Britain; and not only upheld, but declared to be an “ act of duty, rather than of fraud,” when no purpose of fraud is proved, and to arise “out of the moral duty, attached to his character as debtor, to make the fund available, for the whole body of creditors.” Pickstock v. Lysler, 3 M. & S. 375. We are fully satisfied with the doctrine, recognized by the County Court in their charge, that, if the parties intended to have the property disposed . of, to the best advantage, and the avails appropriated as fast as secured, in payment of the honest debts of Irish, and that nothing was reserved to him, until his creditors were first satisfied, they were not guilty of the offence against the statute, notwithstanding they may have intended to prevent attachments, and a consequent sacrifice of the property, even although the conveyance itself might have been inoperative.

The counsel for the plaintiff have assumed the position that every creditor has a right to attach the property of his debtor, and this right cannot be disturbed without danger. It. is true, that every creditor has a right to attach any property of his debtor, which such debtor may own, or be possessed of, at the time of the service of the attachment, and he has the same right to arrest his body. He may levy an execution on the body or property of his debtor. Neither of these are inconsistent with the right, which every one has, of disposing of his property to the best advantage, or of purchasing of others, when no design is entertained to defraud the creditors. The argument seems to be based on the supposition, that the creditors of every man in debt may claim that his property should always remain subject to attachment and * 4 J * J execution, and every conveyance, even though made for the purpose of raising money to pay the debt is void, because it may prevent , the attachment or execution. The soundness of the argument is not perceived, inasmuch as it would tend to prevent all transfers of property, and greatly embarrass all the transactions of business. Moreover, I apprehend that the word right in the statute was intended as synonymous with debt or duty.

It is complained of, that the judge told the jury, the testimony,of Irish did not prove a case under the statute. Although this does not appear from the bill of exceptions, it may be worthy of consideration.

On the views already presented, the testimony of Irish, if believed, would not tend to prove a case under the statute, although it may show that the defendants conducted improperly, both before the conveyance, to induce him to make it, and afterwards, in the management and disposition of the property conveyed. He discards every dishonest motive in himself, describes himself as having no intent to injure his creditors, as wholly surprised, and remonstrating when they made the general sweep of his property, and as indignant when Clayes, some days after the conveyance, said they must frighten the creditors, and buy up the debts at a discount. This testimony tended to show, that the intentions of Irish were honest, and the conveyance made with a view to carry into effect those intentions, and to aid, and not defraud the creditors.

It only remains to examine the requests made by the plaintiff’s counsel; and of each of them it may be remarked, that they are not founded on the supposition, that the intent of the parties was dishonest, and if all the facts were found, which are supposed to have been proved, still, if this intent was wanting, the penalty of the statute was not incurred. This, alone, would be sufficient to justify the Court in neglecting to notice them in their charge. But further, the judge, in his charge to the jury, is not under obligations to ánswer requests there made, upon a hypothetical case. Such requests are calculated, to mislead, and to withdraw the attention of the jury from the subject, actually in controversy. The law, and all the law upon the subject, which is required to enable the jury to come to a correct determination, must be decided, or it will be error; but the- parties cannot claim to have abstract questions of law decided, on a supposed case, which may or may not be warranted by the testimony. Every question of law, arising on the testimony as presented, was decided, and decided correctly in this case, and the judge was under no obligation to answer the particular requests enumerated, either in the affirmative or negative.

On the whole, we think the charge of the judge was correct, and such as he ought to have given, calculated to direct the attention of the jury to the question in issue; to assist them in arriving at a correct conclusion,. and to exclude all improper and extraneous considerations, in a case where their feelings might have led them into a wrong path, and improperly influenced their verdict.

The question, as to the intention of the parties, was submitted to the jury, and they must have found from the evidence that no corrupt motive influenced the defendants; — ■ that they either made a fair purchase, for a valuable consideration, or undertook a trust, laudable and honest, and with no design to injure or defraud the creditors of Irish.

The judgment of the County Court is, therefore, affirmed.

Collameii. J. — Dissenting,