American Varnish Company v. Reed

• Citation: 55 N.E. 224,154 Ind. 88
• Decision Date: 14 November 1899
• Docket Number: 18,462
• Parties: American Varnish Company et al. v. Reed et al
• Court: Supreme Court of Indiana

55 N.E. 224

154 Ind. 88

American Varnish Company et al. v. Reed et al

No. 18,462

Supreme Court of Indiana

November 14, 1899

Rehearing Denied Jan. 24, 1900.

From the Elkhart Circuit Court.

Affirmed.

W. H Hauenstien, J. H. State, L. Chamberlain, J. M. Van Fleet and V. W. Van Fleet, for appellants.

O. T Chamberlain and P. L. Turner, for appellees.

Monks, J. Baker, J., took no part in the decision of the cause.

OPINION

Monks, J.

Appellants sued to recover personal judgments against appellee Reed for the amounts due them respectively, and to set aside as fraudulent certain sales of personal property made by said appellee to his co-appellees. Upon the trial of said cause the court found for appellants as to their respective claims against said Reed, and against said appellants upon that part of their complaint which sought to set aside the sales of said personal property as fraudulent, and over appellants' motion for a new trial judgments were rendered against said Reed for the amounts found due appellants respectively, and in favor of the other appellees against appellants for costs.

Appellants insist that the trial court erred in overruling their motion for a new trial, because the finding of the court was contrary to law. The burden of proof was upon appellants to establish, among other things, that appellee Reed sold his said personal property to his co-appellees with the fraudulent intent to cheat, hinder, or delay his creditors, and that said co-appellees paid no consideration therefor, or if they paid a valuable consideration therefor that they purchased with notice or knowledge of the alleged fraudulent intent of Reed. Scott v. Davis, 117 Ind. 232, 233, 20 N.E. 139; McFadden v. Ross, 126 Ind. 341, 346, 26 N.E. 78; Willis v. Thompson, 93 Ind. 62, 64; Bank v. Carter, 89 Ind. 317, 322.

In this class of cases, under our statute, there is no such thing as fraud in law, but fraud is a question of fact which cannot be presumed but must be proved, because the presumption is always in favor of honesty and fair dealing, and against bad faith. § 4924 R. S. 1881 and Horner 1897, § 6649 Burns 1894; Bank, etc., v. Gear Co., 143 Ind. 550, 557, 40 N.E. 810; Bruner, Rec., v. Brown, 139 Ind. 600, 609, 610, 38 N.E. 318, and cases cited; Rockland Co. v. Summerville, 139 Ind. 695, 699, 700, 39 N.E. 307; Fulp v. Beaver, 136 Ind. 319, 322, 36 N.E. 250; Hutchinson v. Bank, 133 Ind. 271, 282, 283, 30 N.E. 952; Bank v. Findley, 131 Ind. 225, 228, 229, 31 N.E. 62; Coal Co. v. Terre Haute, etc., Co., 129 Ind. 73, 81, 26 N.E. 884; Cicero Tp. v. Picken, 122 Ind. 260, 263, 23 N.E. 763; Wallace v. Mattice, 118 Ind. 59, 20 N.E. 497; Phelps v. Smith, 116 Ind. 387, 393, 394, 17 N.E. 602; Stix v. Sadler, 109 Ind. 254, 258, 9 N.E. 905; Caldwell v. Boyd, 109 Ind. 447, 455, 456, 9 N.E. 912; Louisville, etc., R. Co. v. Thompson, 107 Ind. 442, 446-449, 8 N.E. 18; Rose v. Colter, 76 Ind. 590; Morgan v. Olvey, 53 Ind. 6; Stewart v. English, 6 Ind. 176; Lawson on Presumptive Ev. (1st ed.) pp. 93, 98, 439, 440, (2nd ed.) pp. 112, 117, 118, 517, 518.

It is also the rule that when the facts of a case are consistent with either honesty and good faith or dishonesty and bad faith the presumption of honesty and good faith will prevail. Louisville, etc., R. Co. v. Thompson, 107 Ind. 442, 448, 449, 8 N.E. 18; Bradish v. Bliss, 35 Vt. 326; Wait on Fraud. Con., §§ 5, 6; 2 Thompson's Trial Prac., §§ 1938, 1939, 1940.

We have carefully read the evidence, and, considering the same in view of the foregoing rules and presumptions, we are unable to say that said finding of the court is contrary to law, and cannot therefore disturb it.

Many facts and circumstances were given in evidence which were proper to be considered by the trial court in determining whether or not Reed made the sales of his personal property to appellees with the fraudulent intent alleged, and whether or not appellees had notice or knowledge of such intent if it existed; but what inference should be drawn from said facts and circumstances was a question for the trial court, and not for this court, unless perhaps they were such that only one inference could be drawn therefrom. Elliott's Gen. Prac § 429. Moreover there was a conflict in the evidence as to some of the facts and circumstances given in evidence. Badges of fraud are not fraud, however, but simply evidence of fraud. From the facts and circumstances in evidence the law draws no inference of fraud. Whether such facts and...