Burnham v. Logan

• Decision Date: 18 February 1895
• Citation: 29 S.W. 1067
• Parties: BURNHAM et al. v. LOGAN et al.
• Court: Texas Supreme Court

29 S.W. 1067

BURNHAM et al. v. LOGAN et al.

Supreme Court of Texas.

February 18, 1895.

Error to court of civil appeals of Second supreme judicial district.

Action by Logan, Evans & Smith against Burnham, Hanna, Munger & Co. to try the right to property. There was a judgment for plaintiffs, which was affirmed by the court of civil appeals (30 S. W. 97), and defendants bring error. Reversed.

McCormick & Spence, for plaintiffs in error. Browning & Madden, for defendants in error.

BROWN, J.

Frank and Louis Dysart were partners under the firm name of Dysart Bros., doing a mercantile business at Claude and Panhandle City, Tex. They were indebted to the plaintiffs and defendants, and to one W. E. Grinnell, as well as other people. The firm was insolvent, and on the 10th day of February, 1890, conveyed their stocks of goods at both places to W. E. Grinnell, in trust, to be by him sold, and the proceeds applied to the payment of the debt due to himself (Grinnell), and expenses of administering the trust, and, if there was any surplus, then it was to be paid pro rata to a number of creditors named, among whom plaintiffs in error were mentioned, but not the defendants in error. Grinnell's debt amounted to $800, with interest for a few months, and was, before the assignment, secured by a deed of trust or mortgage on a storehouse worth about $1,400. The stock of goods conveyed to Grinnell invoiced $3,200. The debts secured by the assignment or deed of trust amounted to much more than the value of all the property. After Grinnell had sold $300 worth of the goods for cash, retail, he sold the remainder of the stock to the agent of the plaintiffs in error for $900 cash, it being estimated that the stock would then invoice at cost $2,700. Plaintiffs in error paid cash for the goods, and sent them to the depot for shipment, when they were seized by the sheriff under attachment sued out by the defendants in error upon a debt due to them from Dysart Bros. Burnham, Hanna, Munger & Co. presented to the sheriff their affidavit of claim made in good faith, and bond, as required by law, and took the goods. The case was tried upon issues made involving the good faith and fairness of the deed of trust and the sale to plaintiffs in error. A trial was had in the district court, and judgment rendered against the plaintiffs in error, the claimants of the property, which was affirmed by the court of civil appeals. 30 S. W. 97. Plaintiffs in error present to this court the following grounds of error: First. That the court of civil appeals erred in refusing to sustain the first and second assignments of error, which are based upon the refusal of the trial court to give the second charge asked by the plaintiffs in error, defendants below. Second. The court of civil appeals refused to sustain the fourth assignment of error, which is based upon the refusal or failure of the trial court to charge what constitutes fraud. Third. Error of trial court in admitting evidence of the sale of a safe by one of the Dysarts after plaintiffs in error had purchased it, the safe being included in the sale to them by Grinnell, and that the court of civil appeals erred in overruling the assignment thereon. Fourth. That the instrument made by Dysart Bros. to Grinnell is an assignment, and not a mortgage, and that the court of civil appeals erred in holding it to be a mortgage. Fifth. That there was no evidence introduced to show that plaintiffs in error knew anything of any fraud on the part of Dysart Bros. or Grinnell, if there was any such, and that the verdict was without evidence to support it.

The second, third, and fifth objections presented are not tenable. In the charge of the court the grounds upon which the assignment might be held void for fraud are stated with sufficient certainty under the facts, except as hereafter mentioned. If the defendants desired a more specific charge, they should have asked a charge to supply the omission. Great latitude is allowed in regard to the introduction of evidence upon questions of fraud, and we are not prepared to say that the evidence of the sale of the safe by one of the firm of Dysart Bros. was not admissible as a circumstance, in connection with other evidence, as to the possession of the Dysarts after the making of the deed, as well as upon the question of the knowledge of the agent of claimants of the facts which would show that the transaction was had with a fraudulent intent. We will not discuss the facts bearing upon either question. It was claimed that there was no evidence tending to prove that Miller had notice of any fraudulent intent on the part of Dysart Bros. in making the assignment, but we think there was evidence sufficient to submit the question to the jury. This case was tried in the district court, and presented to and decided by the court of civil appeals, upon the theory that, if there was fraud in the making of the instrument from Dysart Bros. to Grinnell, the property was liable to levy, which would be correct if the instrument is either a mortgage or common-law assignment. If, however, it is a general assignment, it would not be so liable. The court charged the jury, in substance, that if Dysart Bros. made the instrument with intent to defraud their creditors, and the defendants knew of the fraud of Dysart Bros., or of the fraudulent intent of Grinnell in making the sale to claimants, the plaintiffs must recover. The charge omitted to inform the jury that, if there was a fraudulent intent in making the instrument, Grinnell must have participated in that fraud in order to affect the validity of the conveyance. Defendants asked the court to give a charge consisting of two paragraphs, as shown in the transcript (it is divided into three in the brief). The first was, in substance, embraced in the charge of the court and a special charge given at defendants' request, with the exception that it asked the court to charge that Grinnell must have participated in the fraud, if there was fraud, in order to render the instrument void. This paragraph also asked the instruction to the jury that if Grinnell actually took possession of the property, and the assignment was made in good faith for the payment of the debts of Dysart Bros., it would be valid. This last proposition was relevant and proper, because one of the grounds of attack set up in the issues tendered by plaintiffs was that Dysart Bros. remained in possession and exposed the goods to sale in the usual course of trade, which would, if true, render it void. The second paragraph of this charge reads as follows: "You are further instructed that if you find and believe that Charles W. Miller, acting for claimants, consulted with Dysart Bros., and obtained their consent to the purchase of the goods in controversy before the purchase was made, and if said Dysart Bros. approved of and directed said sale of said goods, and if said claimants paid the fair market value of said goods to said Grinnell, and if said purchase price was applied in payment of the debts or any debt mentioned in said assignment of Dysart Bros., then said purchase would be valid, and the title to said goods passed to said claimants, and would no longer be subject to plaintiffs' attachment writ, and you will find for the claimant, irrespective of the validity or invalidity of the assignment to Grinnell." The district judge indorsed the charge as follows: "The foregoing special charge requested by the defendants is refused to be given by the court to the jury, for the reason that the same, as a whole, does not present the law applicable to the case."

This indorsement implies that the charge was in part correct, but was not entirely so; and we have presented to us, as the first question upon that ruling, whether or not the court should have...