Richolson v. Freeman

56 Kan. 463 | Kan. | 1896

The opinion of the court was delivered by

Martin, 0. J.

: I. It is evident, from the remarks of the trial judge,- that the verdict did not meet with the approval of the court and it should have been set aside and a new trial granted, although there had been three prior disagreements. (K. C. W. & N. W. Rld. Co. v. Ryan, 49 Kan. 1, 3, 4, 12, 13, and cases cited.)

II. Upon Freeman’s examination in chief as a witness in his own behalf, he was asked the following question: ‘' Had you any knowledge or notice that Mr. Canoose was selling this stock of goods with intent to hinder, delay and defraud his creditors? ” and he answered, “No, sir.” This is alleged as error, but the question was competent, under the authority of Gentry v. Kelley, 49 Kan. 82, 88.

III. Complaint is made of instructions given, and the court seems to have erred both to the prejudice of. the plaintiff and the defendant. At the request of the defendant below, the court gave the following instruction :

“ 2. If you are satisfied, from the evidence, that C. W. Canoose sold and transferred to the plaintiff the goods in controversy with the intent to defraud, or to hinder and delay, his creditors, then the burden falls upon the plaintiff; and before he can recover he must satisfy your minds, by the preponderance of the evidence, that he made the purchase without knowledge or notice of such fraudulent intent on the part of the said C. W. Canoose, and that all the facts, circumstances and transactions attending and surrounding such sale and transfer were not of that kind and character as should have led him, as a prudent man, to make inquiry into the intent of his vendor.”

This was error to the prejudice of the plaintiff below. A prima facie case was made out in favor of the plaintiff by showing possession of the stock of goods under a bill of sale from Canoose, who was conceded to be the owner. It then devolved upon the defendant to show that the sale was made by Canoose for the purpose of hindering, delaying or defrauding his creditors, and that Freeman knew or had reason to believe that Canoose was acting in bad faith toward his creditors in making the sale. The burden of proof did not shift by the showing of the fraudulent intent of Canoose. (Baughman v. Penn, 33 Kan. 504, 508 ; National Bank v. Beard, 55 id. 773, 42 Pac. Rep. 320, 321.) Where confidential relations exist between the vendor and the vendee, it may sometimes devolve upon the latter to show that the transfer was for a valuable consideration and' in good faith; but that principle is not applicable to this case. The court also charged the jury in instruction No. 1, requested by the defendant below, that the plaintiff was charged with knowledge of all facts that he might have ascertained by examination and inspection of the books and papers he received along with and as a part of his purchase. This is going too far. The plaintiff may not have examined the books and papers, and had he done so might have been unable to understand everything that was contained in them. The contents of such books and papers, as to any showing of indebtedness, were competent evidence against the plaintiff below, and constituted legitimate subjects of argument to the jury that the plaintiff made the purchase either in haste, without regard to the rights of the creditors of Canoose, or that he closed his eyes to facts which would have been otherwise obvious; but it was erroneous to declare, as a matter of law, that he was chargeable with a knowledge of all the facts which an inspection of the books and papers might disclose.

At the request of the plaintiff below the court gave the following instruction :

“1. The jury are instructed, as a matter of law, that it is not sufficient to vitiate a sale of personal property, that it was made by the vendor to hinder, delay or defraud his creditors. In order to vitiate such sale, as against the purchaser, he must have had knowledge or notice of such intent on the part of the seller.”

And the same principle was substantially declared in instruction 3. This was error prejudicial to the defendant below. The jury may have understood therefrom that, in order to vitiate the sale as to Freeman, he must have had knowledge or notice of the fraudulent intent of Canoose. It is not necessary, however, to show actual knowledge or notice of the fraudulent intent of the vendor. »A knowledge of facts sufficient to put one upon inquiry, which, if duly prosecuted, would have disclosed such fraudulent intent, is equivalent to actual knowledge of the same. (Bush v. Collins, 35 Kan. 535, 541, and cases cited.) This principle seems to have been recognized in the instructions given by the court upon its own motion, but we cannot harmonize these general instructions with those we have criticised, and which were requested by the parties. There is little to criticise in the general instructions given by the court to the jury on its own motion. But the province of the jury was invaded by the statement that they ought to have no particular difficulty in finding a fraudulent purpose on the part of Canoose, although there was little, if any, room to doubt that fact, and the judgment would not be reversed on this ground alone. It is best, however, under our practice, to leave all facts not admitted to the determination of the jury, without any intimation of the opinion of the trial judge.

The judgment will be reversed, and the cause remanded for a new trial.

All the Justices concurring.