Bender v. Kingman
| Decision Date | 21 May 1902 |
| Citation | 64 Neb. 766,90 N.W. 886 |
| Parties | BENDER v. KINGMAN ET AL. |
| Court | Nebraska Supreme Court |
OPINION TEXT STARTS HERE
Syllabus by the Court.
1. Where a debtor transfers his property with intent to defraud his creditors, a purchaser from such debtor will be protected only to the extent of the consideration with which he has parted before receiving notice of the fraudulent intent of his grantor.
2. Admission of testimony regarding conversations had in the presence of the purchaser of a fraudulent vendor pending the transfer of the property, charging him with notice of the fraudulent intent of his vendor, held not error.
3. The doctrine of constructive fraud does not obtain in this state, as by virute of section 20, c. 32, Comp. St., the question of fraudulent intent is made a question of fact, and not of law.
4. Fraudulent intent, declared to be a question of fact by statute, does not differ in kind or degree from other questions of fact; and, when the evidence adduced in a case upon the question of fraudulent intent is so conclusive that reasonable minds cannot differ as to the conclusion to be drawn therefrom, it is not error for the court to direct a verdict accordingly.
5. Evidence examined, and held that a peremptory instruction given by the trial court was properly given.
Commissioners' opinion. Department No. 1. Error to district court, Thurston county; Evans, Judge.
Action by Philip H. Bender against Kingman & Co. and another. Judgment for defendants, and plaintiff brings error. Affirmed.Geo. G. Bowman, R. G. Strong, and M. C. Jay, for plaintiff in error.
James H. McIntosh, for defendants in error.
This is a replevin action brought in the district court of Thurston county by Philip H. Bender, plaintiff in error, against Kingman & Co. and John H. Mullen, defendants in error. Mullen was the sheriff of Thurston county, and had levied upon a stock of goods under writs of attachment issued in suits brought by Kingman & Co. against Weiser Bros., and in the action plaintiff in error obtained possession of the stock of goods, claiming to be the vendee of Weiser Bros. An opinion was filed in this case July 10, 1901 (87 N. W. 142), an application of plaintiff in error for a rehearing was allowed, and the case is again presented for consideration.
The facts and circumstances with respect to the transfer to Bender by Weiser Bros. are set out somewhat at length in the opinion of this court in the case of Kingman v. Weiser, reported in 48 Neb. 834, 67 N. W. 941, and no further statement of such facts need be made herein. The trial court directed a verdict for defendants in error, and such action and the rulings of the court upon the admissibility of certain evidence are assigned as error in this proceeding.
The first contention of plaintiff in error is that the court erred in admitting in evidence conversations had between two witnesses who were called by defendants in error and Weiser Bros. It is disclosed by the evidence that these conversations were had in the hardware store during the progress of the inventory being taken of the goods which plaintiff in error had purchased from Weiser Bros. The evidence discloses that at that time plaintiff in error had parted with no consideration for the goods. Certain papers had been drawn up and deposited in the bank at Pender in escrow, to be held until the invoice was completed, so as to ascertain the value of the goods, to determine for what amount plaintiff in error should execute his notes to Weiser Bros., in addition to a contract for the purchase of certain lands which he had or was to assign. This testimony was undoubtedly admitted for the purpose of showing that plaintiff in error had full knowledge of the fraudulent intent of Weiser Bros. in making the sale before he had parted with any consideration. His duty upon having this knowledge brought directly home to him was immediately to stop further proceedings, and by proceeding with the transfer, and by surrendering his papers and giving his notes with full knowledge of the fraud of Weiser Bros., he became a party to such fraud. Hedrick v. Strauss, 42 Neb. 485, 60 N. W. 928;Karll v. Cohn, 38 Neb. 540, 57 N. W. 379;Temple v. Smith, 13 Neb. 514, 14 N. W. 527. This evidence was clearly admissible for the purpose of showing the knowledge of plaintiff in error of the fraud which Weiser Bros. were about to perpetrate on their creditors, and its admission was not error.
The next contention of plaintiff in error is that the court erred in directing a verdict for defendants in error. This contention is based upon two grounds: (1) That the evidence was not sufficient to establish fraud; that, in any event, it was not a case in which the evidence was of such a conclusive character that reasonable minds could not differ, and therefore was a case which must be given to the jury; and (2) that under the statutes of this state the question of fraudulent intent must necessarily be submitted to the jury for determination.
Regarding the first point, it is sufficient to say that from an examination of the evidence we are led to the conclusion that it is of such a character that had the question been submitted to the jury, and a verdict returned for plaintiff in error, it would have been the duty of the court to set such verdict aside. This being true, it was not error for the trial court to direct a verdict for defendants in error, unless, under the statutes of this state, the question of fraudulent intent must necessarily be submitted to the jury for determination. The answer to this question depends upon a construction of section 20, c. 32, Comp. St. 1899, which is in the language following: “The question of fraudulent intent in all cases arising under the provisions of this chapter shall be deemed a question of fact, and not of law, and no conveyance or charge shall be adjudged fraudulent as against creditors or purchasers solely on the ground that it was not founded on a valuable consideration.” Difficulties in arriving at the true import and meaning of language employed in a statute may sometimes best be removed by reference to the conditions prevailing at the time, and with reference to which the legislature enacted the statute regarding the purpose and meaning of which uncertainty may exist. The contention of plaintiff in error, in effect, is that by reason of the statute quoted the question of fraudulent intent, in every case tried to a jury, must be submitted to the jury for determination; and that this is so, even though the evidence establishing a fraudulent intent is so conclusive that reasonable men could draw but one conclusion therefrom, and that it is not within the power of the court to resolve the question into one of law and direct a verdict. The correctness of this contention is the question requiring determination.
Our section quoted above is identical in phraseology with the provision of the statute of frauds of the state of New York. Michigan and other states have provisions substantially the same. Before the enactment of the New York statute, the courts of that state, following the English cases, recognized a two-fold classification of fraud, namely, actual fraud and constructive fraud. Actual fraud is defined by an eminent writer as that where a party intentionally or by design misrepresents a material fact, or produces a false impression, in order to mislead another or to obtain an undue advantage. In every such case there is a positive fraud in the truest sense of the terms. There is an evil act with an evil intent. Story, Eq. Jur. § 192. But constructive fraud was recognized as having an actual, potential existence in the absence of all fraudulent intent. Contracts, although not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, but having a tendency to deceive or mislead other persons, violate private or public confidence, or impair or injure public interests, were deemed equally reprehensible with positive fraud, and were therefore prohibited as within the same reason and mischief as acts and contracts done male animo. Id. § 258. In the case of Reade v. Livingston, 3 Johns. Ch. 481, 8 Am. Dec. 520, decided in 1818, before the enactment of the New York statute (our section 20), Chancellor Kent said: Freeman v. Pope, 5 Ch. App. 538. In Hamilton v. Russell, 1 Cranch, 309, 2 L. Ed. 118, it is said: “The want of possession [in the grantee] is not merely evidence of fraud, but is a circumstance per se which makes the transaction fraudulent in point of law.” Sturtevant v. Ballard, 9 Johns. 339, 6 Am. Dec. 281. It is apparent to us that it was for the purpose of abolishing and avoiding legal presumptions of fraud as recognized in the foregoing cases that section 20 of our chapter 32 and similar provisions in other states were enacted. In the case of Babcock v. Eckler (decided by the court of appeals of New York) 24 N. Y. 623, Sutherland, J., commenting upon the case of Reade v. Livingston, supra, said: ...
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