Burt v. McKinstry

• Decision Date: 01 January 1860
• Citation: 4 Minn. 146
• Parties: WILLIAM H. BURT vs. McKINSTRY & SEELY et al.
• Court: Minnesota Supreme Court

4 Minn. 146

(4 Minn. R. p. 204.)

WILLIAM H. BURTvs.

McKINSTRY & SEELY et al.

Supreme Court of Minnesota.

Appeal from order of district court, Washington County.

Points and authorities for the appellants: —

1. That the judge did not err in permitting the plaintiff to give in evidence on the trial in the court below, the declarations and admissions of Horace K. McKinstry, one of the defendants, made some time after the execution and delivery of the assignment, as proof of the intent with which the assignment was made.

Points and authorities for respondent: —

1. The judge in the court below erred in permitting the plaintiff in the court below to give in evidence on the trial the declarations and statements of Horace K. McKinstry, one of the defendants, made some time after the execution and delivery of the assignment to the assignee Raymond, as proof of the intent with which the deed of assignment was made. Declarations of parties to be admissible in evidence as a part of the res gestæ, must be contemporaneous with the main fact under consideration, and to which they are intended to give character. In the matter of Taylor, 9 Paige, 616; 2 Phil. Ev. 185 (ed. 1859). All the cases agree that declarations made by a person after he has parted with his right are utterly inadmissible to affect any one claiming under him. 2 Phil. Ev. 322, and cases therein cited. Nor are such admissions evidence to show fraud in the deed as to creditors. Alexander v. Gould, 1 Mass. 165; Clarke v. Waite, 12 Mass. 439; Phœnix v. Ingraham, 5 Johns. 412, 415, 426. Even though they be sworn admissions to a bill in chancery. Doyle v. Sleeper, 1 Dana, 531. Even if it be doubtful whether the declarations were made before or after the deed, they cannot be received. Stockett v. Watkins' Adm'rs. 2 Gill & J. 326, 343, 344; 1 Phil. Ev. (last ed.) 322. Declarations made by the assignor or vendor of property after the transfer are not admissible. State v. Jennings, 10 Ark. 428; Settle v. Allison, 8 Geo. 201; Price v. Branch Bank at Decatur, 17 Ala. 374; Kittles v. Kittles, 4 Rich. 422; Garland v. Harrison, 17 Mo. 282; Simpkins v. Rogers, 15 Ill. 397; 1 Phil. Ev. 322. Declarations made by a debtor a week or two after having made an assignment of his property for the benefit of creditors, are inadmissible as evidence to invalidate the assignment. Ogden v. Peters, 15 Barb. 560. Admissions of an assignor of property assigned to trustees for the benefit of his creditors, made subsequent to the execution of the assignment, are not legal evidence against the assignees. Hanna v. Curtis, 1 Barb. Ch. 263; Bridge v. Eggleston, 14 Mass. 245.

Wm. H. Burt, appellant, in person.

Gold T. Curtis, for respondents.

ATWATER, J.

This was an action brought in the district court of Washington County, on behalf of the appellant, and other judgment creditors who might choose to join, to set aside a deed of assignment, made by McKinstry & Seely to Enos B. Raymond, in trust for the benefit of the creditors of the assignors. The pleadings are voluminous, and numerous issues were raised, which were submitted to a jury at the November term, 1859, of that court, and a verdict rendered for the plaintiff. The defendants moved for a new trial, which was granted, and an order entered allowing a new trial. From this order the plaintiff appeals to this court.

In the view which is taken of this case by the court, it would perhaps be unnecessary to notice any of the several grounds upon which a new trial was urged in the court below. But as it is important that the law of this state should be settled, upon the point on which a new trial was granted, and as the same has been distinctly presented for adjudication, it is proper that it should be considered in this connection. Upon the trial of the cause, the plaintiff introduced several witnesses to prove the declarations of McKinstry, one of the assignors, made subsequent to the assignment, as to the value of the property of the assignors, at the time of the assignment, and the purpose with which the same was made, &c., the object being to show an intent to hinder and delay creditors, and protect their property from execution by means of the assignment. This testimony was objected to by the counsel of the defendants, but was allowed by the court. This was manifestly erroneous. Declarations, by a party who has conveyed his title or interest in property, made subsequent to such conveyance, and disconnected with it, cannot be received to invalidate the title of the grantee, or those claiming under him. This principle is well settled by elementary authorities and numerous decisions of adjudicated cases in different states. 1 Greenl. Ev. § 180; Part 1, C. and H. Notes on Phil. Ev. 276; Ogden v. Peters, 15 Barb. 560; Hanna v. Curtis, 1 Barb. Ch. 263; Bridge v. Eggleston, 14 Mass. 245; Bartlett v. Delprat, 4 Mass. 702; Phœnix v. Ingraham, 5 Johns. 412; Frear v. Evertson, 20 Johns. 142; Doyle v. Sleeper, 1 Dana, 531; 2 Gill and J. 326, 343-4. The authorities on this point are based upon sound principle, as the admission of such evidence would often be productive of the most dangerous consequences. A grantor would have it in his power, by collusion with a real or fictitious creditor, or other party, to deprive his grantee or his assigns of their property, by a species of proof which it might be difficult, if not impossible, to rebut. Nor can it be properly urged that the case of a voluntary assignment, for the benefit of creditors, should form an exception to the rule; for although the trustee in such case is not regarded as a purchaser for a valuable consideration, yet he is not the real party in interest but the creditors of the assignor, who may mostly desire to sustain the conveyance. The learned judge, upon discovering his error in the admission of this testimony, hastened to correct it by granting a new trial.

But in the view of this court, no issue of fact is presented by the pleadings, and therefore a new trial was improperly granted; or perhaps it would be more proper to say that an issue of law is tendered, the decision of which will render unnecessary the trial of the issues of fact embraced in the pleadings. The statute (Comp. Stat. ch. 51, § 1) provides that "every conveyance or assignment, in writing or otherwise, of any estate or interest in lands, or of goods, chattels, or things in action, or of any rents, issues, or profits, made with the intent to hinder, delay, or defraud, creditors or other persons of their lawful suits, damages, forfeitures, debts, or demands, and every bond or other evidence of debt given, suits commenced, decree or judgment suffered, with the like interest [intent] as against the person so hindered, delayed, or defrauded, shall be void." The principal inquiry in actions of this nature is as to the intent of the grantor in making the conveyance. If it appears from the instrument itself, or the pleadings in the case, that the intent is such as is prohibited by statute, it precludes the necessity of examining into facts aliunde by the jury. This intent may appear from the instrument in various ways; as, by providing that the goods or property may be sold on credit, that the debtor reserves a part of the property for his own use (when required to assign the whole), requiring the creditors to discharge their debts in full as a condition of sharing in the benefits of the conveyance, or by showing that the grantor had more than sufficient property, at the time of the assignment, for the payment of all his debts. Assignments of the nature of the one under consideration have always been looked upon with disfavor in the eye of the law, and are only sustained on the principle that they are for the benefit of creditors; and when it appears that they are made with an intent to prejudice the rights of creditors, they are obnoxious to the law, and must be avoided. The statute is broad and comprehensive, aiming not merely to prevent the debtor from defeating his creditors in the collection of their debts, but even from in any manner hindering or delaying them.

The complaint in this case sets forth at length the assignment of the defendants McKinstry & Seely, to Raymond. In this instrument (or in the schedule forming a part of the same), the grantors have given a description of the property assigned, and have carried out opposite the several items the value of the same, with the exception of the notes and judgments in their favor, which are put in as the amounts appear on their face. The amount of their indebtedness is also stated, and shows about $28,000. The value of their property, as estimated by the defendants in round numbers (including the notes and judgments at their face), is $85,000. This is estimating one item mentioned in the schedule at $300, about which the pleadings are in conflict, the complaint claiming that the figures read, and were intended to read, $34,000, while the defendants aver they read, and were intended to read, 3 to $700. This wide difference between the two values of the...