23 Tex. 51 | Tex. | 1859
This is a case of special assignment of all the goods, accounts, and notes of a mercantile establishment, to pay a particular creditor, with a reservation of the balance, if any, to be returned to the debtor. Holt is nominally the creditor; though really a trustee for the benefit of the particular creditor; the note having been assigned to him for collection, and judgment thereon having been obtained in the name of Holt for the use of Henry Sheldon. The sheriff, Howerton, levied upon and sold a negro woman and child, in the possession of Hudnall, the assignor, that had been traded for in the collection of the debts of the establishment assigned. Holt notified the sheriff of his claim to the negroes, and brought this suit to recover their value. The sheriff set up in defence, that the assignment was fraudulent as to creditors; and that, therefore, the negroes were subject to the execution of Burnside & Go., under which he had
As a means of determining the character of this assignment, it is proper to notice : 1st, That it was not shown, that Hudnall was being pressed by any debts, except that of Burnside & Co., or that he was insolvent, or in failing circumstances : 2d. It is not shown, that the property assigned was the whole, or even the larger portion, of his estate. It stands on the ground then, of special assignment, in trust for the security and payment of a particular creditor, and may be regarded as a trust in the nature of a mortgage, with some of the qualities of an assignment ; inasmuch as it not only secures the debt, but also makes provision for its payment, by a disposition of the property, by which it is secured, and an appropriation of its proceeds to its discharge.
Such an instrument is a valid conveyance, when not tainted with a fraudulent intent. In Leitch v. Hollister, there was a special assignment of a particular thing, directly to certain creditors, without the intervention of a trustee, with a reservation of any balance that might remain; and the court said: “ The conveyance, whatever may be its form, is in effect a mortgage of the property transferred. A trust as to the surplus results from the nature of the security, and is not the object, or one of the objects of the assignment. Whether in the instrument, or left to implication, is immaterial. The assignee does not acquire the entire legal and equitable interest in the property conveyed, subject to the trust; but a specific lien upon it. The residuary interest of the assignor may, according to its nature, or that of the property, be reached by execution, or by bill in equity.” (4 Comstock, 216.)
There was no effort, in this case, to subject the residuary interest ; but a direct attack upon the assignment, as fraudulent, as to creditors, because it was fraudulently made, with intent to hinder and delay them.
The charge of the court, as far as it went, was correct. The
The evidence justified this charge. It was shown that there was no visible change in the possession or control of the mercantile establishment; that Hudnall remained in possession, disposing of the goods and collecting the debts, as before the assignment. Nor was it shown, that Holt ever took charge of them, even formally, or that he exercised any supervision over the acts of Hudnall, or any one else concerned in the management of the effects. Hudnall’s sign was not removed, nor does it appear that anything was done, except recording the deed, calculated to give notoriety to the change of possession. As tending to show that Holt did take possession of the goods, a mutilated power of attorney was produced by Hudnall, who was sworn as a witness for Holt, which was stated by him to have been executed by Holt, authorizing him to sell the goods, collect the debts, &c. The paper was partly destroyed, so that Holt’s name did not appear upon it, nor was there any explanation of how much more it contained, or by what means it became mutilated. This was supported by no other evidence; and was not of a character to compel the jury to believe, that it was a real and not a pretended and colorable agency ; and if they believed the latter, then it would follow, that a delivery of the possession of the goods had not been made; and they should have found for the defendant. (Butler v. Stoddard, 7 Paige, 163; Burrill, 427, 430.)
The defendant also asked the court to charge the jury, that Hudnall’s remaining in possession of the goods, and using them in payment of other debts than the one secured, was a badge of fraud; as likewise was the assignment of a large amount of property greater than the debt to be secured ; also, that if he was a judgment debtor, that fact was a badge of fraud. These charges, as well as the one first adverted to, were all refused.
It is true, that the court is not allowed to charge upon the weight of evidence, but it may explain to the jury the reasons,
Possession by the assignor, when the deed is absolute, is generally held to be prima facie evidence of fraud, which, if not explained away, makes the deed void, as to creditors, who are hindered and delayed by it. (Earle v. Thomas, 14 Texas Rep. 592.) Any use of the property, not consistent with the objects of the deed, would increase the force of this presumption, unless satisfactorily explained. An assignment of a much larger amount of property, than what would be necessary to pay the debt, as well as the fact of there being a judgment creditor, are badges of fraud, and are admitted in evidence, as tending to establish it in connection with other facts. (Twyne’s Case, 1 Smith’s Lead. Cas. 83.)
Courts cannot be expected or required, in all cases, to explain in detail, in the charge given to the jury, the purposes for which every piece of testimony has been admitted. But in cases of fraud, where the main issue is, usually, the intent with which the deed is made, something more, than giving in substance a copy of the statute of frauds, will often be necessary, to enable a jury to determine a case, in accordance with the principles which have governed chancellors, in adjudicating the facts connected with assignments. Under the restriction of our statute against charging upon the weight of evidence (Hart. Dig. Art. 753), the court may not be able to do more than explain, that the fact of an assignor being a judgment creditor, or of his having assigned an excessive amount of property, is admitted in evidence as tending to establish a fraudulent intent, and that its effect is to be determined by them, in connection with any facts that may be in the case, explaining them, and making their existence consistent with the objects of the deed, and with fair dealing. To charge
These are all matters of fact,—evidence tending to establish the fraudulent intent, but subject to be explained by any other fact that may. be proved in the case, so as to break their force. And when the object of their admission is sought to be pointed out, in a charge asked, the accompanying proposition should be placed in the same connection,—that they are not in their nature conclusive, but subject to explanation by other facts, if they are shown to exist. These charges then, except the first, may have been objectionable in the form in which they were asked, with reference to the facts in evidence. But the first one, as to delivery of possession, was correct and appropriate, and should have been given. The greatest means of control, however, which courts have, in relation to this subject, are to be found in their power of granting a new trial, if the verdict should not properly respond to the facts of the case. When considered upon its facts, on a motion for a new trial, the badges of fraud present themselves in forcible array. The possession and unlimited control by the assignor, without any visible change in the possession or control; the appropriation of a portion of the property assigned, to be sold in satisfaction of his debt, and its diversion from the expressed objects of the deed, by the assignor; the large amount of property assigned to pay this one creditor; the subsequent suit by the assignee on the note, which this assignment proposed to secure and pay, and the matters connected with this suit; the fact that it is not shown that the debtor has other property, to satisfy in whole, or in part, his other debts; are strong circumstances, which can hardly be said
Another question in the case, arises upon the objections taken by the defendant below to the admission of Hudnall, the assignor, to testify in behalf of the assignee, against the sheriff, who sold the property. The objection was made on account of his interest; and no good reason is now seen, why he was not interested. If the sheriff was compelled to pay the value of the negroes, it would at once be appropriated towards the payment of the debt, secured by the assignment. If the sheriff succesfully resisted the suit, he lost that much. For the sheriff, we must presume, (as he testified on the trial) had appropriated this money to the debt due to Burnside & Co. And so far as it appears, from the facts, this appropriation of it would enure to the benefit of Hudnall, in the payment of the debt of Burnside & Co.; even though he had to pay it again, by this suit, towards the debt of Holt.
It is not like the case of a vendor who has conveyed, with warranty expressed or implied, property, which is afterwards levied on, upon a trial of the right of property. In such case, there has been no appropriation of its value, in discharge of the execution against him, at the time he gives his testimony; and there can be but one appropriation of it, in any event, and so far as his pecuniary interest is concerned, it is immaterial to him, to which obligation it is finally appropriated. Hence his interest is said to be balanced. We think the objection was well taken. The judgment is reversed and cause remanded.
Reversed and remanded.