Bowden v. Spellman

• Decision Date: 09 June 1894
• Citation: 27 S.W. 602
• Parties: BOWDEN v. SPELLMAN.
• Court: Arkansas Supreme Court

27 S.W. 602

BOWDEN v. SPELLMAN.

Supreme Court of Arkansas.

June 9, 1894.

Appeal from circuit court, Pulaski county; Robert J. Sea, Judge.

Action by B. F. Bowden against O. M. Spellman for unlawfully levying an attachment on his property. Judgment for defendant, and plaintiff appeals. Affirmed.

This was an action for damages growing out of an alleged illegal seizure of personal property which appellant claimed belonged to him, and was unlawfully levied upon and taken out of his possession by appellee, under writs of attachment from the United States court, commanding appellee, as United States marshal, to attach and safely keep the property of Martin Bros. Appellee admitted the levy upon part of the property described in appellant's complaint, but denied that it was the property of appellant or in his possession when levied upon; says he was not a party to nor bound by the attachment proceedings, that the writs were in due form, and that the property levied upon belonged to Martin Bros. He denies the loss and damage. Martin Bros., insolvent merchants at Reyno, Ark., on the 29th day of December, 1891, sold their stock of goods and certain other articles of personal property to one B. F. Bowden, the appellant. The consideration for the purchase was $4,500, evidenced by various promissory notes. H. T. Simon, Gregory & Co. and Shafer, Schwartz & Co. were creditors of Martin Bros. for large sums which had accrued before the sale from Martin Bros. to Bowden. Martin Bros. assigned two of the Bowden notes — one, for $325, to H. T. Simon, Gregory & Co.; and another, for $275, to Shafer, Schwartz & Co. — as collateral security. These firms did not know, at the time the notes were received by them, that said notes were given as a part of the price of the property sold by Martin Bros. to Bowden. Their collecting agent, however, received information as to the sale and all the circumstances connected therewith on the 7th day of January, 1891. On the 12th day of January, 1891, this agent, at the instance of Simon, Gregory & Co. and Shafer, Schwartz & Co., brought suits in the United States court for the eastern district of Arkansas, H. T. Simon, Gregory & Co. and Shafer, Schwartz & Co. being the plaintiffs, and Martin Bros. the defendants. Writs of attachment were issued on same day suits were brought, based on the sale of Martin Bros. to Bowden, which the plaintiffs in attachment alleged was fraudulent as to creditors. These were the writs under which appellee seized the property for which damage is sought in this action. The attachments were dissolved on the 6th day of March, 1891. The notes of Bowden which had been transferred by Martin Bros. to H. T. Simon, Gregory & Co. and Shafer, Schwartz & Co. had never been returned, but were in possession of Muse, their collecting agent, and were referred to and exhibited on the trial of the issue on the attachments.

Rose, Hemingway & Rose, for appellant. S. R. Cockrill and Geo. H. Sanders, for appellee.

WOOD, J. (after stating the facts).

The court, over the objection of appellant, gave the following instruction: "(7) If the jury believe from the evidence that Martin Bros. delivered two of the notes executed by Bowden, as consideration for the sale of the property to Simon, Gregory & Co. and Shafer, Schwartz & Co., without notifying them that they were the proceeds of a sale of the property to Bowden, and that Simon, Gregory & Co. and Shafer, Schwartz & Co. did not, at the time of receiving and accepting said notes, have information or knowledge that the said notes were the proceeds of a sale to Bowden of the property afterwards attached, then they were not estopped from causing the attachment to issue," — and refused to give the following, asked by appellant, to which ruling he also objected: "(3) If the jury find that said sale was fraudulent in law because of its tendency to cheat, hinder, or delay the creditors of Martin Bros., still the sale would be good as between the parties to that sale, and could only be set aside on the intervention of creditors, and such creditors might waive their right to attack said sale; and if the jury further find that, after making said sale, Martin Bros. sent the attaching creditors notes that were given by Bowden for a part of the price of the property thus bought by him, and that they, or their agent, acting for them in that behalf, knowing that said notes were given for a part of said price, have retained said notes until the present time, then they were estopped from maintaining their said attachments, and they must be considered as having ratified said sale; and, as between them and said Martin Bros. and said Bowden, the property thus sold was the property of the said Bowden, and was not the property of Martin Bros., and was therefore not subject to attachment in favor of said attaching creditors; and, if the jury find that said attachments in favor of H. T. Simon, Gregory & Co. and Shafer, Schwartz & Co. were levied on said property for the debt of Martin Bros. under these circumstances, then said levy was illegal, and they will find for the plaintiff in this suit."

1. It is insisted that the court was correct for two reasons: (1) Because of a failure to set out all of the testimony; and (2) because of inherent defects in the instruction refused. The bill of exceptions begins thus: "Be it remembered that, on the trial of this cause, evidence was introduced tending to show the following state of facts." Rule 13 of this court relieves us of the burden and expense of setting out the testimony in extenso. That is no longer required in civil cases or misdemeanors. But, to keep this court from indulging the presumption that all facts necessary to establish the correctness of the rulings of the lower court were proved that could have been proved, the bill of exceptions must show affirmatively that it contains a statement of all the facts required to explain the rulings of the trial court upon the issues involved. This is just as essential now as it was formerly, where the evidence was fully set out, to say: "This was all the testimony in the case." The statement "that evidence was introduced tending to show the following state of facts" would by no means be conclusive that there would not be other facts shown on the trial which, if brought before us, would sustain the rulings and judgment of the lower court. It must not be left for us to say by implication that there were no other facts shown. We should decline, therefore, to reverse for the refusal to give the third instruction, even if it were correct; for we are unable to say from the record that there was not testimony produced at the trial which rendered the giving of the instruction either unnecessary or improper. For instance, if the plaintiff offered to return or surrender the notes before bringing the attachment suits, or at the trial, and Martin Bros. refused to accept same, the above prayer would have no place in the case. Upon the hypothesis that the bill of exceptions contained a statement of all the facts necessary to explain the ruling of the court in refusing it, was the prayer correct?

In the case of Millington v. Hill, Fontaine & Co., 47 Ark. 309, 1 S. W. 547, it is held that "a conveyance to defraud creditors is good as between the parties and the privies, although it may be avoided by the creditors of the fraudulent grantor. If the creditors condone the fraud, the grantee's title is good against all comers, and when any creditor, with knowledge of the wrong that has been done him, makes his election to take from the grantee the purchase price of the land, his conduct is, in effect, an affirmance of the sale, and a waiver of the right to complain of the fraud." The principle here announced is elementary, and is as applicable to this case as to the one in which it was announced, although the facts are different. If the attaching creditors, with knowledge of the fraudulent sale, elected to take the notes given for the purchase price of the goods bought, their conduct would be, in effect, an affirmance of the sale, — a condonation of the fraud. Thompson v. Peek, 115 Ind. 512, 18 N. E. 16. It is urged, however, that, instead of an election to take the notes, the attaching creditors, by issuing their attachments, were proceeding in the most vigorous and emphatic way to disaffirm the fraudulent sale, and to announce their intention of taking nothing under it. But in the absence of a return, or offer to return, the notes, or a showing that such was impracticable or impossible, how are we to know that it was not their double purpose to hold on to the fruits of the fraud with one hand, while attempting to uproot the tree that bore it with the other? Sumner v. Parker, 36 N. H. 449. Our own court has long ago announced the rule that a party defrauded must, "within a reasonable time after the fraud is discovered, elect to rescind, if such be his purpose; and he can only rescind by returning, or offering to return, whatever he may have received under the contract of value to either party." Desha's Ex'rs v. Robinson, 17 Ark. 240; Seaborn v. Southerland, Id. 603; Bellows v. Cheek, 20 Ark. 438; Hynson v. Dunn, 5 Ark. 395; Davis v. Tarwater, 15 Ark. 286; Johnson v. Walker, 25 Ark. 204; Hobbs v. Benjamin, 31 Ark. 151; Merritt v. Robinson, 35 Ark. 483; Hanger v. Evans, 38 Ark. 334; Berman v. Woods, Id. 351. To the same effect, see Farwell v. Hanchett, 9 N. E. 58; Id., 120 Ill. 573, 11 N. E. 875; Bowen v. Shuler, 41 Ill. 192; 8 Am. & Eng. Enc. Law, p. 850, and other cases there cited; Johnson v. McLane, 43 Am. Dec. 102. And the general rule is that such return, or offer to return, must be before the bringing of suit. There are, however, some well-settled exceptions, even as firmly established as the rule itself. One is where the vendor who seeks to rescind for fraud has received nothing but the notes of the vendee in payment. In such a case, if the vendor can and does produce them...