27 Cal. 228 | Cal. | 1865
On the second day of October, 1861, a judgment for twenty-four thousand dollars was entered in the District Court of the Sixth Judicial District in favor of C. H. Burton against Bur
“We hereby confess judgment in favor of Charles H. Burton, plaintiff above named, for the sum of twenty-four thousand ($24,000) dollars, and authorize the entry of judgment against us therefor, with costs.
“ This confession of judgment is for a debt now' justly due from us to plaintiff, arising upon the following facts: Since the year 1852 up to the present time, plaintiff, Charles H. Burton, has been a resident of San Francisco, and hds during such time acted as our agent, i. e., agent of firm of Burton & McCarty, of the City of Sacramento, of which we, John Burton and E. McCarty, are the members. That as such agent the plaintiff has from time to time during the period aforesaid made advances of money upon our account,, and rendered services unto us ; that upon the 31st of May, 1861, plaintiff and ourselves accounted together and made a balance sheet of our transactions to that day; that thereupon we were found indebted unto plaintiff in the sum of twenty-seven thousand dollars; that thereupon we gave our obligation unto plaintiff to pay unto him said sum, with interest at the rate of one and one half per cent per month; that upon said note there has been paid the sum of thirty-five hundred dollars.
“ J. E. Burton, “Edward McCarty.”
The said Burton & McCarty on the same day made a further confession in favor of defendant Spillman, for ten thousand dollars, in which the facts out of which the indebtedness arose, are set forth as follows :
“ This confession of judgment is for a debt now justly due from us to plaintiff, arising out of the following facts: The plaintiff has between the years 1852 to 1857, and from thence until the present time, with exception of some four months during the year 3.857, been in our (Burton & McCarty’s) employ as salesman, at our place of business. During such period*231 we have become from time to time indebted unto him for his services, and during such time he has been in the habit of investing with us such moneys as he accumulated, to be used by us in our business. Upon investigating his account with us we find the sum of ten thousand dollars to be justly due him from us.”
This action is brought for the purpose of setting aside these judgments, on the ground that they are, respectively, fraudulent and void as to the plaintiffs, creditors of Burton & McCarty.
As to the judgment in favor of C. H. Burton, the complaint charges that at the date of the confession the indebtedness of Burton & McCarty to C. H. Burton did not exceed two thousand dollars at the most; that the confession was made without his knowledge, consent or solicitation, and that no person was duly authorized to accept or receive the same in his name or for his benefit; that the same was made by Burton & McCarty on their own motion, and was filed by them or by their procurement; that they took out execution and caused the same to be levied on their property, and that the said C. H. Burton, who resided in San Francisco, knew nothing of these proceedings until the day after the levy, when he, being well aware of their fraudulent character, justified them, and has ever since continued to justify and claim under them, as bona fide.
As to the judgment of Spillman, the complaint alleges that Burton & McCarty owed him but a few hundred dollars, instead of ten thousand. That Spillman has taken out execution on said judgment, and caused it to be levied, and that Burton & McCarty are insolvent.
All the principal allegations were denied. The trial was by .the Court, who found for the plaintiffs, and judgment was thereupon duly entered upon the findings.
The defendants moved for a new trial, on the ground of insufficiency of the evidence to justify the decision, and that it is against law; and upon the further ground, so far as Spill-
The motion for new trial was overruled, and the appeal is from the order.
The Court finds, generally, that both judgments are fraudulent, as alleged, and then proceeds to find specifically a series of facts, some of which are ultimate in their character, and others secondary merely, raising presumptions more or less cogent as to the truth of the allegations of fraud. Passing the general finding that both j udgments were fraudulent as to the creditors of Burton & McCarty, the counsel of the appellants advances two propositions: First—That all the facts, both final and secondary, bearing upon the question of fraud, were found by the Court upon insufficient testimony; and Second—That the ultimate facts found by the Court are, as matter of law, insufficient to support the judgment.
First—We have examined the testimony contained in the voluminous record filed in this action with patient attention ; and have furthermore availed ourselves of the thorough and exhaustive discussion of counsel upon the weight of the evidence and the conclusions properly to be drawn from it, and we are satisfied not only that the case is one where the evidence is in conflict, but one in which the Court below did not so far mistake the relative weight of the opposing proofs as to justify us in going behind the special findings. The position of the counsel for the appellants that many of the special findings are without evidence to support them, is not borne out by the record. Where the findings are not sustained by direct evidence in opposition to the positive testimony of the parties to the respective judgments, they are sustained by the admissions or counter-statements in the answers, or by the evidence of circumstances; and under the
Second—The only question remaining to be considered, aside from that made upon the evidence alleged to be newly discovered, and a question of “ irregularity,” is as to whether all or any of the final facts, specially found, support the judgments as matter of law.
1. As to the judgment in favor of C. H. Burton.
It is found that Burton & McCarty were insolvent at the date of the j udgment; that C. H. Burton resided in San Francisco, and was there the day the judgment was confessed; that “the confession was given and caused to be entered up by Burton & McCarty of their owm motion;” that “no one was authorized by said C. H. Burton to receive said confession of judgment for him or to act as his agent in that respect that “ he did not know said confession had been made until the day following its entry and after the levy of execution issued thereon, after the levy of plaintiff’s attachment; and that the giving of said confession was a voluntary act on the part of said Burton & McCarty to enable said Charles H. Burton to obtain priority over all the creditors of said Burton & McCarty, including the plaintiffs; and that said Burton & McCarty directed and caused the execution on said confession to be levied on their property immediately after its issuance;” and that “ the goods so levied upon were all the visible property of said Burton & McCarty.” In addition to these findings, the complaint alleges that at the date of the confession Burton & McCarty were “apprehensive that the claims of these plaintiffs and others, their bona fide creditors, would be presented to them for payment, and if not paid, that attachments would be issued against them and their property;” and that “ the confession was made for the purpose of giving a prior lien to C. H. Burton.” The truth of these averments is not denied in the answers, and is assumed throughout in the argument of counsel. The question is: What is the legal effect of these facts upon the rights of the parties ?
It was held in Ryan v. Daley, 6 Cal. 238, on a state of facts
2. The Court further found that the actual indebtedness of Burton & McCarty to C. H. Burton at the time when the note mentioned in the confession was executed, was nine thousand eight hundred and three dollars and seventy-three cents less than the amount for which the note was given, and that said excess was included in the note for the purpose of defrauding creditors. These facts being given, the j udgment is unquestionably void. {McKentry v. G-ladwin et al., 10 Cal. 227 ; Scales v. Scott, 13 Cal. 76.) There is little or no positive evidence to support the finding upon which the conclusion proceeds, but the circumstantial evidence in favor of its correctness is entitled to the gravest consideration.
3. But further: The note is misdescribed in the judgment and in the statement on which the judgment is founded. The note was for twenty-seven thousand five hundred and forty-five dollars and eighty-one cents, at two per cent per month interest; and it is described as a note for twenty-seven thousand dollars at one and one half per cent interest, and the facts out of which the indebtedness arose are not set forth in the statement with proper precision. By reason of these defects, and on the authority of Richards v. McMillan, 6 Cal. 419; Cordier v. Schloss et al., 12 Cal. 143, and Cordier v. Schloss et al., 18 Cal. 576, the Court held that the judgment was prima facie fraudulent, and that the burden of rebutting the presumption was upon the party claiming under the judgment. Now, the confession states that the indebtedness for which the note was given was for “ services and advances,” and it behooved the creditor to prove that at the date of the note Burton & McCarty were indebted to him for “ services aud advances” in the sum of twenty-seven thousand five hundred and forty-five dollars and eighty-one cents. But the defendant (C. H. Burton) was estopped by his answer from proving the proposition—for he had averred therein that the amount
Second—As to the judgment confessed in favor of Spillman.
For reasons kindred to those already stated, we cannot set aside the findings of the Court in their bearings upon this judgment, on the ground that they are not supported by the evidence. It is true there was no lack of positive testimony in favor of its integrity, but the Court below evidently more than doubted its truth in view of the logic of the events proved. As to the legal effects of the facts found there can be no question.
It is urged that the Court examined the account of Spill-man in the books of Burton & McCarty after the case was
Mr. Justice Sawyer expressed no opinion.