Shauer v. AltertonShauer v. Alterton
- Reporters:
- , , ,
- Before:
- Harlan
after stating the case, delivered the opinion of the court.
In
Pachet Company
v. Clough, 20 Wall. 528, 542, one of the assignments of error was the injection of a deposition. In respect to that assignment, the court said : “ It is sufficient to say that we have not before us either the deposition or any . statement of what it tended to prove. Wé cannot know, therefore, that it was of any importance, or that, if it had been admitted, it could have had any influence upon the verdict. A party who complains of the rejection of evidence must show that he was‘injured by the rejection. His bill of exceptions must make it appear that if it had been admitted, it might have led the jury to a different verdict. This must’ be understood as the practice in this court, and such is the requirement of our twenty-first rule. By that rule it is ordered that when the error assigned is, to the admission oivrejection of evidence, the specification shall quote the full substance of the evidence offered, or copy the offer as stated in the bill of exceptions. This is to enable the court to see whether the evidence offered was material, for it would be idle to reverse a judgment for the admission or rejection of evidence that could have had no effect upon the verdict.” -At the date of the trial of that cause in the court of original jurisdiction it was provided, by rule twenty-one of this court, that “ when the error alleged is to the admission or rejection of evidence, the specification shall quote the full substance of the evidence offered, or copy the offer as stated in the bill of exceptions. Any alleged error not in accordance with these rules will be disregarded.” 11
The principle announced in Packet Co. v. Clough was reaffirmed in Railroad Co. v. Smith, 21 Wall. 255, 261, and Thompson v. First Nat. Bank, 111 U. S. 529, 535-6. The rule is not the less applicable m the present case, because the. trial court excluded the answer to the question upon the particular ground stated m the bill of exceptions. It may, therefore, be regarded as settled, that an assignment of error, based upon the exclusion by the trial court of an answer given in the deposition of a witness to a particular question, will be disregarded by this court if the answer, or the full substance of it, is not set forth in the record in appropriate form for examination.
Nor did the court err in excluding those parts of Nash’s deposition showing “ what marks and endorsements on the back of each of the checks indicated, how such marks were made, and by whom.” The checks themselves were in evidence ; and if, as the bill of exceptions states, the witness did not appear to be familiar with the course of business of the banks through which the checks passed, so as to entitle him to speak upon the subject, the exclusion of his answers relating to the subject referred’to was not error.
2. The court did not err in-allowing the defendant to read, in evidence, the confidential business statement made by Louis S. Shauer to B‘radstreet’s Commercial Agency, at Sioux City, in January, 1885. That statement, the bill of exception recites, concealed the alleged liability of Louis to his brother, then existing. Why should such concealment have been made? The answer to that question has some, though, perhaps, very slight bearing upon the inquiry whether Louis was, in fact, indebted to his brother to the full extent claimed by the latter.
3. By the statutes of Dakota it is provided that “ a debtor may pay one creditor in preference to another, or may give to one creditor security for the payment of his demand, in
Other provisions of the statute arc to the effect that “actual notice consists in express information of a fact;” that “constructive notice is notice imputed to a person not having actual notice; ” and that “ every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself.” Civil Code, §§ 2107, 2108, 2109; Compiled Laws of Territory of Dakota, §§ 1711,1712, 1713.
In view of these statutory provisions, and of the facts which the evidence tended to establish, two principal questions were considered by the court in its charge to the jury : first, whether the transfer of the merchandise in question was made with the intent to delay or defraud the creditors of Louis S. Shauer; second, whether the transfer to his brother was accompanied by such immediate delivery of the merchandise and followed
Upon the first of these questions, the court said, generally, to the jury, that an intent upon the part of the debtor to delay his creditors in the collection of their debts was as much within the statute as if the intent had been to cheat or defraud.; that while a debtor, in failing circumstances, was at liberty, acting in good faith and openly, to prefer some creditors over others, he could not, as against those not paid, reserve to himself a secret trust in any transfer; that a creditor, thus favored by the debtor, will not be permitted to .enjoy the preference given him if he seeks, by the transaction, to cover or protect the remainder of the debtor’s property so that it could not be applied to the payment of his honest debts;- and that if a creditor seeks to appropriate the debtor’s,property for a debt, any material part of which was knowingly fictitious, the whole transaction would be held as tainted with fraud and void as to other creditors.
Applying these principles to the facts of this case, the court said: “Therefore, should‘you find from the evidence that Louis S. Shauer was fairly, and honestly indebted to his brother, Gustave Shauer, in the full amount claimed, which I believe is about $6700, you will remember the exact amount, and that with the honest intention of securing such indebtedness he purchased the property in question without notice or knowledge of any fraudulent intent on the part of Louis S. Shauer to delay or defraud -his creditors, and without any intent on his own part to secure any interest in said property, present or future, to his brother Louis, and without any intent to delay or defraud the creditors of Louis S. Shauer, then he is entitled to recover whatever may have been the intent of Louis Shauer himself, for,the intent of Louis Shauer can affect the plaintiff only in the case that he knew, had notice, or as a prudent man had knowledge sufficient from the circumstances to “put him upon inquiry as to his brother’s fraudulent intent. On the other hand, should you find that the alleged indebtedness’ from Louis to Gustave Shauer, and which forms a part of the consideration of the sale, was knowingly false
The jury was further instructed, at the instance of the’ plaintiff, that if they found that Louis Shauer made a sale of these goods to his brother, it would be presumed, in absence of proof to the contrary, that such sale was made in good’ faith and with honest intentions; that if the evidence was equally balanced, the defendant must fail in respect tó the fraud alleged by him; and that if the plaintiff knew of the insolvency of his brother, and that the payment of his debt would, deprive other, creditors of their claims, “this mere knowledge on his-part would not make the sale in question fraudulent.”
The plaintiff contends that the instructions of the court upon the question of intent were based upon an erroneous interpretation of the statute, in that they made knowledge that was sufficient, under all circumstances, to put him, as a prudent man, upon inquiry^ as to his brother’s fraudulent intent, equivalent to actual notice or knowledge of such an intent. That the court-held this view is made clear by one of the instructions given to the jury at the request of the defendant, in which it was said that “actual knowledge by the purchaser-of any fraudulent intent on. the part of the seller is not éssential to render a sale void; ” and that “ if the f-acts brought to the attention-of Gustave G. Shauer were such as to awaken suspicion and lead a man of ordinary prudence to make inquiry,
It is admitted that if át the time of his alleged purchase the plaintiff had actual notice that his brother intended, by the sale, to‘delay or defraud his creditors, the sale would have been void against creditors. But the plaintiff denies that anything short of actual notice or knowledge of such fraudulent intent will suffice, under the statute, to invalidate his .purchase. The statute of Dakota, strictly interpreted, would seem to invalidate any transfer of property made with, the intent, upon the part of the owner, to delay or defraud creditors, even when the transferee purchased in good faith. But it was not thus interpreted by the court below. It was liberally construed so as to protect
“bona fide
purchasers for value. Assuming, for the purpose of this case, that this interpretation was correct, we are of opinion that while the plaintiff was not bound to act upon mere suspicion as to the intent with which his brother made the sale in question, if he had knowledge or actual notice of circumstances sufficient to put him, as a prudent man, upon inquiry as to whether his brother intended to delay or defraud his creditors, and he omitted to make such inquiry with reasonable diligence, he should have been deemed to have notice of such fact, and, therefore, such notice as would invalidate the sale to him, if such sale was in fact made with the intent upon the part of the vendor to delay or defraud other creditors. Referring to the statute of Dakota, declaring a conveyance of real property, other than a lease for a term not exceeding one year, void as against ymy subsequent purchaser or encumbrancer, (including an assignee of a mortgage, lease, ór other conditional estate, of the same ^property or any part thereof,) in good faith and for a valuable consideration, whose conveyance is first duly recorded, the Supreme Court of Dakota, in
Gress
v.
Evans,
1 Dakota, 387, 399, said : “Actual notice of a prior unrecorded conveyance, ■ or of any title, legal or equitable, to the premises, or knowledge and notice of any facts which should put a prudent man upon inquiry, impeaches the good faith of the subsequent purchaser. There should bo
A less stringent rule cannot be applied to the Dakota statute relating to transfers of property with intent to delay or defraud creditors. The plaintiff had the right, by a purchase of. his brother’s stock of merchandise, to obtain payment of his, claims in preference to the claims of other creditors. But the statute of Dakota, however liberally construed in favor of purchasers from, a fraudulent debtor, will not permit him to enjoy, to the exclusion of other creditors, the fruits of his purchase, when the sale was made with the intent to delay or defraud other- creditors, if he had, at the time, actual notice of such intent or knowledge of such circumstances or facts as were sufficient to put a prudent person upon an inquiry that would have disclosed the existence of such intent upon the part of. the vendor. The plaintiff could not properly have claimed a more favorable interpretation of the Dakota statute than was given to it by the court below. A statute that declares every transfer of property, made with intent to delay or defraud any creditor of his demands, void against all creditors of the debtor, would be wholly ‘defeated in its operation if. the rights of the transferee were not subject to the rule that “whatever is notice enough to excite attention and put the party on his guard, and call for inquiry, is notice of everything to which such inquiry might have led.” Wood v. Carpenter, 101 U. S. 135, 141; Kennedy v. Greene, 3 Myl. & K. 699, 722.
4. Having disposed of the question as to the intent with which the sale in question was made, the court referred to the
In addition to what appears in the charge, the court, at the’ instance of the defendant, instructed the jury that a change of the property in controversy in this case must not have been merely nominal and momentary, but real, actual, .and open, such as could .be publicly^ known; and- that if the.property was permitted to remain in -the possession of Louis S. Shauer, then the transfer was fraudulent in law as to his creditors, notwithstanding the sale may have been made to his brother in good faith arid for a valuable consideration.
The specific objection made by the plaintiff to these instructions is that they stated an arbitrary rule, namely, that the change in possession must be accompanied by such outward, visible signs as would apprise the world of the change, and
In this connection, it is appropriate to say that the interpretation placed by the court below on the Dakota statute, relating to change of possession, accords‘with the decisions of’ the Supreme Court of California in respect to a similar statute. In Stevens v. Irwin, 15 California, 503, 507, it was said: “ A reasonable construction must be given to this language, in analogy to the doctrines of the courts holding the general principles transcribed into the statute. The delivery must’ be made of the property; the vendee must take the actual possession; that possession must’ be open and unequivocal, carrying with it the usual marks and indications of ownership by the vendee. It must be such as to give evidence to the world of the claims of the new owner. He fnuSt, in other words, be in the usual relation to the property which owners of goods occupy to their property. This possession — not taken to be surrendered back again’ — riot formal, but substantial.” See also Lay v. Neville, 25 California, 545, 553; Woods v. Bugby, 29 California, 466; Parks v. Barney, 55 California, 239. There are many other cases to the same effect.
5. Exception was taken to what the court said to the jury
The jury could not have been induced by anything said by the court’ to give undue weight to the fact that the transaction
We are of opinion that it was not error for the jury.to be told that the relations of the parties to the transaction made it necessary to carefully scrutinize the, facts, but that their determination must,,at last, depend upon the inquiry whether the transaction was honest and bona fide. .
. We perceive no ground to doubt that the case was well tried. The jury were fully and properly instructed in respect to every aspect of the case, and we have no authority to set aside their verdict; even if it does not appear to be justified by the evidence. Railroad Co. v. Fraloff, 100 U. S. 24, 31; Lincoln v. Power, ante, 436.
Judgment affirmed.