88 Wis. 63 | Wis. | 1894
The plaintiffs, Herman Kaufer, Charles Smithing, and S. E. Sherman, nnder the firm name of Kaufer, Smithing & Co., did a commission auction business in the city of Milwaukee, and sold merchandise to the trade (wholesale), and also insolvency goods and real estate for different parties who consign to them, at public auction. Jacob Berkson & Co., wholesale merchants and jobbers of gents’ furnishing goods, of the city of Chicago, consigned to the plaintiffs various lots of said goods between the 14-th and 29th days of August, 1891, and the plaintiffs had received the same to be sold on commission, of the value of $10,000; and the plaintiffs had advanced on the same, at different times, the sum of $7,606.10. The said Jacob Berkson at that time was, and for some time before had been, indebted to one Aaron Eeltenstein, by promissory note and checks, in two sums, of $2,500 and $6,800; and the said Eeltenstein made an affidavit in which he stated, in effect, that the said Jacob Berkson had made such a disposition of his property with intent to hinder, delay, or defraud his creditors; and thereupon he procured writs of attachment to issue from the superior court of the county of Milwaukee against the said Berkson and his property, and placed the same in the hands of the defendant, who was sheriff of Milwaukee county; and the defendant, as such sheriff, levied upon and attached said gents’ furnishing goods as the property of said Berkson, and then in the possession of the plaintiffs as aforesaid, and which had not yet been sold by them. The plaintiffs thereupon brought this action of replevin against the said defendant for their special interest of $7,606.10 in said goods, which they had so advanced to the said Berkson. The defendant answered, setting up said writs of attachment and the levy of the same on said goods by him as such sheriff, and alleged that the said goods were the property of said Berkson. This raised the question of fraud in the consignment of said
The testimony on the trial tended to prove the following facts: Jacob Berkson had been a wholesale merchant or jobber of gents’ furnishing goods in the city of Chicago for a long time, and had become indebted to a great number of persons and in large amounts which he was unable to discharge, and was grossly insolvent. For some time before he made these consignments to the plaintiffs he had been secretly shipping away his goods to different places and persons, and his stock of goods had become reduced to the amount and value of $20,000. One Nathan Rubin Wide-man, sometimes called Nat Rubin or Rubien, had been employed for some time in the store and business of Berkson. He had formerly been in business as one of the firm of Kaplin & Rubien. He had been acquainted with the plaintiffs about two years, and had made several consignments of goods to them from different concerns, and plaintiffs paid him a commission of two per cent, thereon; and, when his firm of Kaplin & Rubien was about to fail, he made a consignment to them of their goods on the same terms. Such consignments were not made in the name of the consignors, and to the names of the plaintiffs as consignees, but fictitious names were used for both, so that the goods could not be traced. Berkson and the plaintiffs were not acquainted with each other, and Rubin brought them together to make arrangements for these consignments. They were also to be made in the names of fictitious persons. Mr. Smithing of the plaintiffs visited the store of Berkson in Chicago, and examined his stock of goods, and estimated them at $20,000; and he was told by Rubin that Berkson was about to fail and wanted the goods shipped in fictitious names so that they could not be traced, and Smithing acceded to such request. The plaintiffs employed Rubin to obtain the consignment for them, and they agreed to pay
The jury rendered a verdict in favor of the plaintiffs, and that they are entitled to the possession of the property, of the value of $10,000, and six cents damages, and the defendant has appealed from the judgment entered thereon.
There was an immense mass of testimony, defensive and explanatory, making a printed case of over 900 folios; but, altogether, it does not seem to change the effect of this statement of facts. The case -was very ably tried by distinguished counsel, and, although the main facts were few and simple, this mass of testimony, much of it remote if not immaterial, was well calculated to confuse the jury and obscure the main and simple issues of the case.
1. The learned counsel of the appellant asks this court to reverse the judgment on the ground that the verdict is against the evidence. The question of intent to defraud in such a disposition of his property by Berkson to the plaint
2. The exceptions taken to the rejection of testimony offered on behalf of the defendant to show other transactions of the plaintiffs, claimed to be similar in character and intent t© this consignment, were not well taken. Such evidence would create extraneous and outside issues, im
3. Many exceptions were taken to the instructions of the court to the jury, which we are compelled to hold were well taken, and that the instructions excepted to contain errors of law sufficiently material and important to cause a reversal of the judgment and the remanding of the cause for a new trial. The main issue in this case and the law relating to it are very simple and easily and readily understood by the jury upon very brief instructions by the court. The instructions on the law should be applied to the case before the jury on the evidence, and not consist of abstract dissertations on the law of fraud. The jury should have been instructed that it was incumbent on the defendant to prove that the various consignments of goods to the plaintiffs by Berkson were made by Berkson with intent to hinder, delay, or defraud his creditors of their lawful actions, damages, debts, or demands, and that the plaintiffs, or one or more of them, knew of such intent or had knowledge of such facts and circumstances as would put a prudent man
First. The court instructed the jury that the defendant, Walsh, as sheriff, levied upon the property by virtue of writs of attachment in actions in which one Feltenstein was plaintiff, etc., and “ that Walsh is only a nominal party, and that the party in interest is Feltenstein, who is the plaintiff in the actions, and that he defends this action as a creditor of Berkson, and claims and- insists that the transfer of the property was made with intent,” etc. This long instruction of the manner in which Feltenstein was interested in the case as an attaching creditor and the only party in-interest, was wholly unnecessary and the jury had nothing to do with it one way or another. But this was not all. It- misstated the parties to the action, and introduced a new defendant to the action, not in the record, and tended to confuse and complicate the issue and load the memory of the jury with extraneous and immaterial matter. The defendant, Walsh, answered that he took the goods as sheriff on certain attachments as the property of Berkson, and alleged that they" were the property of Berk-son. To prove that they were still the property of Berk-son, the defendant, Walsh, introduced testimony tending to show that the disposition of the goods by Berkson to the plaintiff was fraudulent and void. It is the defendant, Walsh, who has answered, justifying his taking of the goods as sheriff on certain writs, and it is the defendant, Walsh, who claims and insists that the transfer was fraudulent; and that is all the jury had any interest in knowing. Why introduce to the jury this Chicago creditor of Berkson
Second. The court instructed the jury as follows: “Fel-tenstein, the real party in interest, defends this action as a creditor of Berkson, and claims and insists that the transfer of the property under consideration to the plaintiffs by Berkson, in the way and manner in which it was done' by him, was done with the intent to hinder and delay the creditors of Berkson-in the collection of their debts and demands due them from Berkson, and to defraud them, and that the plaintiffs in this action knew of the fraudulent design and intent of Berkson in thus transferring and delivering the goods to the plaintiffs to be sold, at the time they were received by them, and at the time they made their advances on the property, and that the plaintiffs had knowledge or notice of, and participated in, the fraudulent transaction, and with such knowledge of facts and circumstances in the premises, they aided and assisted Berlcson in his attempt to hinder and delay and defraud his creditors, and thereby became partakers in the. fraud of Berkson, and although there may have been paid an advance of money on the property when it was delivered into their possession by Berkson or his agent, yet they are not bona fide purchaser's or holders of the property, by reason of having had
Third. After instructing the jury as to the burden of proof on the plaintiffs, and that the plaintiffs have undertaken to prove the same, the court said that they had undertaken to show “ that the goods were obtained and procured by them in the. regular course of their business,”
Fourth. The court also instructed the jury “that it is incumbent, also, upon such party [defendant] to prove to your satisfaction and convince you by a fair preponderance of the evidence ” that the sale or transfer was made with intent to hinder, delay, or defraud creditors, etc. In other words, it must be proved to your satisfaction and convince yon that the transfer of the property was made with such intent, but this must be done by a fair preponderance of the evidence. The jury, after they should find that such intent was proved to their satisfaction, and that they are convinced of it, must then inquire what is meant by a fair preponderance of the evidence, and they would certainly be unable to understand it. This word has no proper use in such a connection. Fraud is not to be presumed, but clearly proved, is all there is of it, and anything more would be likely to confuse the jury.
Fifth. The court said further: “ It is a maxim of the law that the party alleging fraud must prove it. That means that it is not to be presumed, however suspicious the facts and circumstances may be. In cases of this nature, facts must be shown in order to establish a defense.” The jury might well understand, from this language, that positive evidence wTas necessary to prove fraud, in contradistinction from suspicious facts and circumstances, however suspicious they may be. Fraud is more generally proved by suspicious facts and circumstances than in any other way. Positive evidence of intent to defraud is impossible.
Seventh. The following instruction is clearly erroneous “ But you must also find, in order to defeat a recovery by the plaintiffs, that the plaintiffs knew, or had reason to know, at the time of making such advances to Berkson, the latter did not intend to use such advances in the payment of his indebtedness, or for the legitimate reguirements of his business, or that Berkson 'intended to use or dispose of such advances in such a way as to hinder, delay, or defra/ud his creditors, and the burden of proving such■ knowledge on the part of the plaintiffs is on the defendant.” This instruction would account for the verdict having been rendered for the plaintiffs, even though the evidence of the fraud was as strong as it ever was in any case in the books. It imposes an utter impossibility on the defendant,— to prove that the plaintiffs knew what disposition Berkson was going to make of the advances or the fruits of the fraud. There is no such legal principle. This error was very material, and no doubt affected the verdict.
Eighth. To make this last instruction still more conclusive of the case, it is followed by the instruction: “And the defendant must satisfy you that they had such knowledge, by a fair preponderance of the evidence.”
When the consignments of the Berkson goods were first received by the plaintiffs, it does not appear that they had any general property in them. They were consigned to be sold at auction on commission, and the title remained in Berkson until they were sold. When the attachments were levied on the goods, the plaintiffs had advanced on
On account of the above errors the judgment must be reversed and a new trial ordered.
By the Court.— The judgment of the superior court is reversed, and the cause remanded for a new trial.