Batson v. Findley
| Decision Date | 14 January 1903 |
| Citation | 43 S.E. 142,52 W.Va. 343 |
| Parties | BATSON v. FINDLEY et al. |
| Court | West Virginia Supreme Court |
Submitted June 12, 1902.
Syllabus by the Court.
1. There must be notice of application for the appointment of a receiver in all cases of ex parte or vacation application and in all cases pending the suit, before the decree upon the merits, unless the bill prays for the appointment of such receiver, in which case it may be done in term as to real or personal estate without such notice.
2. Settled accounts are deemed conclusive between the parties unless fraud, mistake, or omission is shown.
3. A bill to reform a settlement of accounts on the ground of mistake, and to correct such mistake, must allege the mistake distinctly and particularly, giving circumstances of mistake showing wherein that mistake consists, and not be based upon mere general averments of mistake.
Appeal from circuit court, Taylor county; John Homer Holt, Judge.
Bill by John W. Batson against James W. Findley and others. Decree for plaintiff, and defendants appeal. Reversed in part.
Ira E Robinson and Davis & Davis, for appellants.
G. H. A. Kunst, for appellee.
James W. Findley, being indebted to insolvency, executed a deed of trust conveying his real and personal property for the payment of various debts, among them three notes made by Findley to George W. Reynolds, which were given a priority over various other debts, being placed in the first class of the debts secured; and also to secure payment of certain notes made by Findley to Martin and Woods, commissioners. and a note made by Findley to Patrick, on which notes Reynolds was Findley's security, and which notes were placed in the second class. Batson, one of the creditors secured in the said deed of trust, whose debt was placed in the third class in order of security, brought a chancery suit in the circuit court of Taylor county, charging that the debts secured by said deed of trust to Reynolds were fraudulent, trumped up, and fictitious, and that the provisions in the said trust for the payment and security of the said debts to Reynolds were made under confederation and connivance between Findley and Reynolds to defraud other creditors of Findley by securing and preferring in favor of Reynolds such false and fictitious debts. The bill charged that Reynolds owed Findley, and had money in his hands of Findley, sufficient to pay the debts of Reynolds. A decree in the case held that Findley owed Reynolds nothing and those debts to be unfounded, fraudulent, and fictitious as regards other creditors, denied them the preference given by the deed of trust, and declared that they should be postponed in payment to all other debts secured by said trust. From that decree Reynolds has appealed.
The said deed of trust having been made on the 30th of January, 1890, before our statute forbidding an insolvent to give a preference among creditors, it cannot be assailed merely because it gives Reynolds a preference; before that statute a man had a perfect right to prefer one honest debt over another, though insolvent. Therefore Batson's case must, for success, succeed in establishing that the debts secured to Reynolds are nonexistent, false, fraudulent, and fictitious. In passing on the question, we must eliminate from consideration the fact that Findley was insolvent; for if those debts are just, then the insolvency of Findley is without any force in the case, as I sought to show in the case of Herold v. Barlow, 47 W.Va. 750, 36 S.E. 8. I there give the reasons of this position, the chief one being that, if a man has a just debt against another, he may procure that other, though utterly insolvent, to give him a preference, even though that preference should leave none of the debtor's assets to go to other creditors. See Shelley v. Boothe, 39 Am. Rep. 481. I have come to the conclusion, upon the evidence, that such evidence falls short of the establishment of the charge that Reynolds' debts are fictitious and fraudulent. It is useless and out of place to put into this opinion the evidence, or a detail of facts developed by that evidence, found in the voluminous record in this case. The constitution, in requiring the reason for our decision to be stated, means only the legal reason, the principles of law controlling the decision, as precedents for future cases, and does not intend that we shall load the reports with details of evidence differing in every case, constituting no precedents for future guidance.
Fraud is never presumed, but must be established by him who asserts it. He carries the burden, and must make his assertions of fraud reasonably clear. Now, as to the three notes made by Findley to Reynolds dated 5th February, 1886,--two of them,--and the third dated January 1, 1890: These notes are before us. Both Findley and Reynolds swear positively that they were actually made on the dates they bear. As to the two dated 5th February, 1886, witness Curry says that he was present at a settlement of the large cattle and land transactions between Findley and Reynolds, and saw the settlement made on that date, and saw those two notes executed by Findley on the same piece of paper. His evidence is quite satisfactory as to this settlement and these notes. It would alone establish the execution of those notes at that date. Moreover, in the year 1886, F. M. Reynolds saw these notes. Further, McDonald saw them in 1887. Thus it is clear that those notes were not newly fabricated at the late date of the deed of trust. This suit was not brought until 1895. It is clear that the notes are genuine, and bear the true date of their execution. One of those two notes is for $4,820.86, the other for $3,029.16; two notes being given because one of them was on a consideration touching some land, the other on other considerations, and Findley requested that the land transaction be put into separate note. Hence the two notes of the same date payable at one day. The third note was for $1,105.85. Those two notes of earlier date were given when no one dreamed that Findley was embarrassed, a circumstance tending strongly to negative the idea that they were fictitious. Had they been given very recently, there might be some pretext for saying that they were for a false debt. Were those two notes given for a fictitious consideration? Why shall we say so? Findley and Reynolds were large cattle dealers doing business together buying, grazing, and shipping large numbers of cattle, their transactions amounting to thousands of dollars. Reynolds was a man of large means and business experience. He furnished money for the purchase of cattle. Both Reynolds and Findley so swear, and it was this fact which brought Findley in debt to Reynolds on the settlement of the transactions of several years dealing made in February, 1886, when the notes were given. Findley owned a good deal of land, and dealt very considerably in stock, and was regarded as solvent; but under the light revealed by passing time, and clearly established in this case, Findley was always largely in debt, operating on borrowed money, buying land on credit, borrowing money out of bank. Having commenced on nothing, he was really never worth anything after payment of his debt. The fact that he borrowed large amounts of money from individuals and banks, bought land on credit, pursued the system of renewing and not paying his notes, some of his debts standing 10 to 15 years, unfailingly tell us that he was always hard pressed for money, and was worth little or nothing yet. It is therefore highly probable, under all the light cast by the evidence in this case, that Reynolds, being a man of large means, but needing the co-operation of Findley in the cattle business, would and did furnish the money for its prosecution. Both he and Findley so swear positively. I see nothing to contradict this position proven by the evidence of both of these men and other circumstances in the case. They lost money in stock dealing. The evidence is not of sufficient weight to prove these two notes as given for a false and fictitious debt. Those two notes covered the cattle transactions up to their date, and a land transaction. When Findley, prior to this settlement some years, purchased the Francis Findley farm, he was unable to pay the heirs for it, and Reynolds advanced for him large amounts of money to pay for it on the faith of the land being responsible for it. He, as a witness, named the parties to whom he made payments, and exhibited checks and papers to show such payments, and he exhibited the original memorandum of settlement, verified by the oath of himself and Findley. Curry sat in the room when this settlement was made February, 1886, and says that Findley acknowledged that Reynolds had paid money on the land, and owed Reynolds the balance shown by the two notes, which he saw executed, and that Findley requested the land debt put in a note to itself, as expressed on its face. Both Findley and Reynolds swear that the debt represented by the notes was honest, and is unpaid. Findley and Reynolds kept on dealing together in stock thereafter, and the note of $1,105.85 represents a settlement of such later transactions. The remarks above made as to the other notes largely apply as to this note. Notes given by one man to another on settlement of accounts between them running through years and years, covering large transactions, which all admit to have existed, and those notes and their consideration verified by the unqualified evidence of those two parties, cannot be overthrown in a court of justice by mere general charges of fraud,--mere suspicion of foul play. The law requires certainty in such cases. As to those notes and settlements, the evidence to overthrow them...
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