Flanigan v. Lampman

| Mich. | Nov 10, 1863

Chbistiancy J.:

We think the question put to the witness Whittemore, on the part of the defendant below, was erroneously overruled.

Assignments, ostensibly for -the benefit of creditors, are so frequently resorted to by embarrassed debtors for their own benefit, as a convenient method of securing to themselves the property which justly belongs to their creditors, that, to avoid injustice, the most liberal rules should prevail for the admission of any evidence which may tend to prove the fraud. Possession of the assigned property by the assignor, or Ms control over it, after the assignment* has always been held to have a strong bearing upon the question of intent with which the assignment was made. And this species of evidence is perhaps more generally resorted to than any other, to show a fraudulent intent in the execution of the instrument. And we think the whole conduct of the assignee with reference to the pro~ perty, after the assignment, should be allowed to be shown, as bearing upon the question of intent. If that conduct has been entirely consistent with the professed objects of the assignment, it can not prejudice; but if it tend to show that the assignor still claims and seeks to derive a benefit from the property, to the prejudice of his creditors, it will generally tend, in a greater or less degree according to the circumstances of the case, to show that the assignment was originally made with this fraudulent purpose.

But it is urged that the question overruled related to possession after the sale by the assignee; and that, to affect his title, it should have been while he had control of the property, and that he must in some way have assented to-it. But it had already been shown, by the same witness, that one of the assignors had bought certain horses and carriages of the assigned property, at private sale, from the assignee, ostensibly as the agent of one Ashworth, his brother-in-law, who was one of the preferred creditors mentioned in the assignment, and whose claim the defendant below insisted was fraudulent. If, therefore, it could be shown that the assignor, after this ostensible purchase, had kept possession of the property himself, down to the time of the trial, this, unexplained, would have some tendency to show, not only that the ostensible purchase in the name of Ms brother-in-law was but a sham, but also, in some degree, to show that the assignment had been made by him with a fraudulent intent. And though the assignee might have acted in good faith, and in ignorance of this fraudulent intent, either in the purchase or the assignment; yet, if the assignment he found to have been made with this intent by the assignor, it would he void as to his creditors. The assignee does not stand in the position of a bona fide purchaser for a valuable consideration; and the fraudulent intent of the assignor, in making the assignment, is sufficient to defeat the title of the assignee, though he may be innocent.

The error in overruling the question put to Whittemore was not cured by the defendant’s being allowed to ask the same question of the plaintiff’s witnesses, on their •cross - examination. A party can never he precluded from introducing competent evidence from his own witnesses, and compelled to trust the proof of any. part of his case to the ■evidence he may he able to draw out on the cross-examination of those of his adversary. To hold that, by cross examining tbe witnesses of the adverse party upon the same matter, he had waived the error of the Court in excluding competent evidence offered in chief, would he to hold that he ought to have made the error of the Court as prejudicial to himself as possible. No amount of authorities could establish the soundness of such a proposition.

The judgment of the Circuit Court must he reversed, with costs of both courts, and a new trial granted.

The other Justices concurred.