63 S.W.2d 647 | Ark. | 1933
STATEMENT BY THE COURT.
On July 15, 1930, the Union Co-operative Gin Association of Rector, Arkansas, a co-operative gin association, was indebted to the First National Bank of Rector, Arkansas, in the aggregate sum of $10,144.13. For convenience of the parties, appellant, J. M. French, and three other stockholders and directors in the gin association, executed their individual promissory notes in favor of said bank aggregating the total indebtedness of the gin association to it. Appellant J. M. French's note was for the sum of $2,593.52. This note was dated December 22, 1929, due eleven months after date and bearing interest at 10 per cent. per annum. The total indebtedness of the gin association, aggregating $10,144.13, was secured *997 by a mortgage dated July 15, 1930, covering all the gin properties. The three other stockholders and directors of the gin association who joined with appellant in executing notes aggregating the total indebtedness to the bank have not appealed. The First National Bank of Rector went into receiver's hands in November, 1930, and this action was instituted by such receiver to foreclose the mortgage against the gin properties and seeking individual judgments against the respective makers of the several notes.
It was alleged by the receiver in the foreclosure suit that appellant French had, sometime prior to the filing of the suit, purchased, and had induced the transfer to himself of a certain mortgage, executed by the gin association in favor of the National Cottonseed Products Corporation, upon which, on November 11, 1930, there was a balance due of $3,013.13; that on November 11, 1930, this prior indebtedness was paid by the gin association and appellant, J. M. French; that the National Cottonseed Products Corporation assigned said mortgage to appellant French, whose interests therein amounted to $2,260. It was further alleged that J. M. French is insolvent and has no property from which a judgment could be collected, other than the cottonseed products mortgage, and that said prior mortgage favor of the National Cottonseed seed Products Corporation, which had theretofore been assigned to J. M. French, should be impounded and foreclosed for the benefit of the receiver. The appellant, J. M. French, answered the complaint by alleging that he had transferred and assigned the National Cottonseed Products Corporation mortgage to one M. L. Burns. Thereupon an amendment to the complaint was filed in which it was alleged that the assignment of the National Cottonseed Products Corporation mortgage by French to Burns was fictitious, fraudulent and made without consideration, and was made with intent and design of hindering, delaying and defrauding the receiver in the collection of his debt.
The chancellor found that appellant was indebted to the receiver in the sum of $2,603.36; that the transfer from French to Burns was fictitious and fraudulent and *998 made for the purpose of hindering and delaying the receiver in the collection of his debt; and that by reason of the transfer French had become insolvent.
Appellants, J. M. French and M. L. Burns, prosecuted this appeal to reverse the decree of the chancellor, holding that the assignment from French to Burns of the National Cottonseed Products Corporation mortgage was fraudulent and void. Other facts and circumstances will be referred to in the opinion. (after stating the facts). But one question is presented on this appeal for determination, namely, was the assignment of the National Cottonseed Products Corporation mortgage by French to Burns fraudulent and void?
The chancery court of Clay County found that his assignment was fraudulent and void, and this judgment should be affirmed, unless the chancellor's findings are contrary to the clear preponderance of the testimony. Mente Company, Inc. v. Westbrook,
This court has held that the intent to defraud creditors may be presumed from an act necessarily resulting in such hinderance. Metcalf v. Jelks,
Again, this court said in the last case cited that the testimony of a party to an action who is interested in the result will not be regarded as undisputed in determining the legal significance of the evidence.
It would serve no useful purpose to detail the testimony presented to the chancellor. It suffices to give only a short statement thereof. French testified that Burns paid him more than $2,000 in cash as consideration for the assignment. Burns testified to practically the same statement of facts. Other testimony, however, shows that Burns was a renter and had been for a number of years; that he owned no real estate and but little personal property; that at numerous times during the past several years he was forced to borrow very small and insignificant sums of money from the banks in the vicinity; that *999 he had been a renter on French's farm for a number of years. On the other hand, the testimony shows that French was substantial in his dealings; that he carried very substantial balances in the banks in that vicinity; that he was a man of some means and no necessity appears for his negotiations with Burns. French and Burns were examined and cross-examined time and again in the presence of the court, and the contradictions and inconsistencies which appear from their testimony were entirely sufficient to warrant the trial court in disbelieving their testimony.
After carefully reviewing the transcript of the testimony, we cannot say that the chancellor's findings of fact were contrary to the clear preponderance of the testimony.
Decree affirmed.
