20 S.W. 629 (Mo. 1892), State To Use of Salomon v. Mason

Citation:20 S.W. 629, 112 Mo. 374
Opinion Judge:Macfarlane, J.
Party Name:The State to use of Salomon, Appellant, v. Mason et al
Attorney:D. P. Dyer and David Goldsmith for appellant. C. H. Krum, John C. Orrick and Frank, Dawson & Garvin for respondent.
Case Date:November 29, 1892
Court:Supreme Court of Missouri

Page 629

20 S.W. 629 (Mo. 1892)

112 Mo. 374

The State to use of Salomon, Appellant,

v.

Mason et al

Supreme Court of Missouri, Second Division

November 29, 1892

Appeal from St. Louis City Circuit Court. -- Hon. D. D. Fisher, Judge.

Reversed and remanded.

D. P. Dyer and David Goldsmith for appellant.

(1) The court erred in refusing to instruct the jury that, if they believe that the alleged payment of $ 3,500 was not made by Trepp, they were bound to find that Trepp was indebted upon his three notes read in evidence, and to the full amount thereof. Bump on Fraudulent Conveyances [3 Ed.] pp. 574, 594; Gates v. Labeaume, 19 Mo. 26; McConnell v. Bank, 27 N.E. 617. (2) There was no evidence that the value of the property in controversy exceeded Trepp's indebtedness on said three notes, if said alleged payment was not in reality made by him, and the court, therefore, erred in refusing to instruct the jury to that effect. Hill v. Corcoran, 15 Col. 270. (3) The court erred in giving the instruction number 12. This is true: First. Because fraud in a sale can never be established by proof that the purchaser had reason to know or believe that the seller intended to defraud his creditors. Van Raalte v. Harrington, 101 Mo. 602; Carroll v. Hayward, 124 Mass. 120. Second. Because, in the case of a preference, actual knowledge by the preferred creditor of a fraudulent intent on the part of the debtor will not invalidate the preference. Holmes v. Braidwood, 82 Mo. 610; Albert v. Besel, 88 Mo. 150. Third. Because gross inadequacy in price is merely a badge of fraud; at the utmost, it only warrants an inference of fraud as a matter of fact, and does not as a matter of law establish fraud. Schatz v. Kirker, 17 Week. Notes of Cases (Pa.) 43; Motley v. Sawyer, 38 Me. 68; Craver v. Miller, 65 Pa. St. 456; McFadden v. Mitchell, 54 Cal. 628; Bickler v. Kendall, 66 Iowa 703; Kempner v. Churchill, 8 Wall. 362, 369; Ames v. Gilmore, 59 Mo. 537; Bump on Fraudulent Conveyances [3 Ed.] pp. 44, 45. Fourth. Because, even when such inadequacy is sufficient to warrant an inference of fraud as a matter of fact, it is a comment upon the evidence, and erroneous for the court to instruct the jury that they may infer it, and, therefore, it is all the more erroneous to require them to find fraud. Bump on Fraudulent Conveyances [3 Ed.] p. 34; Herkelrath v. Stookey, 63 Ill. 486; Leasure v. Colburn, 57 Ind. 374; Kane v. Drake, 27 Ind. 29. Fifth. And, finally, because there was no evidence of such an inadequacy as would warrant an inference of fraud, or constitute a badge of fraud. Fuller v. Brewster, 53 Md. 361; Bump on Fraudulent Conveyance, 45; Prosser v. Henderson, 11 Ala. 484; Hunt v. Hoover, 34 Iowa 81; Day v. Cole, 44 Iowa 452. (4) The trial court erred in excluding the parts of Mr. McIntyre's deposition which it ruled out. Bank v. Kennedy, 17 Wall. (84 U.S.) 25; Greenleaf on Evidence [14 Ed.] secs. 100, 101; Best's Principles of Evidence [Chambers Am. Ed.] p. 466, note; State v. Gabriel, 88 Mo. 631; State v. Walker, 78 Mo. 387; Wharton on Evidence [3 Ed.] secs. 1102, 262; Phillips on Evidence, pp. 169, 170. (5) When the debt preferred is bona fide, and the property transferred in payment is not excessive, there is no room to impute fraud in fact in a preference, unless a secret use in favor of the debtor is established by the evidence...

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