Franklin v. Claflin

• Decision Date: 29 May 1878
• Citation: 49 Md. 24
• Parties: ROBERT H. FRANKLIN, Claimant of Property Attached of George Hughes & Co. v. HORACE B. CLAFLIN and Others, Trading as H. B. Claflin & Co.
• Court: Maryland Court of Appeals

49 Md. 24

ROBERT H. FRANKLIN, Claimant of Property Attached of George Hughes & Co. v. HORACE B. CLAFLIN and Others, Trading as H. B. Claflin & Co.

Court of Appeals of Maryland

May 29, 1878

Appeal from the Superior Court of Baltimore City.

The case is stated in the opinion of the court.

Exception.--At the trial the plaintiffs offered the ten following prayers:

1. That if the jury find from the evidence, that the alleged sale by Hughes & Smith, trading as James Duncan & Co., to Robert H Franklin, the claimant, was made with intent to defraud the creditors of the said Hughes & Smith, then the said sale is void, and gives no title to the said claimant to the property so sold.

2. That if the said sale mentioned in the first prayer was made with intent to hinder and delay the creditors of said Hughes & Smith, the said sale is void, and gives no title to the claimant in this case to maintain his claim, even though the jury may believe that the parties to said sale intended ultimately to pay their said creditors.

3. That if the jury find that at the time of the alleged sale of the property mentioned in the evidence by George Hughes and Thomas A. Smith, to R. H. Franklin, the said Hughes & Smith were largely indebted, and had no sufficient means to meet their obligations or to continue their business, except through the indulgence of their creditors; and if they further find that said Hughes & Smith, while in the condition above mentioned, sold their stock of goods and property in Baltimore to the claimant, as mentioned in evidence, and that said property was all the assets of the firm of James Duncan & Co.; and if they shall further find that said stock of goods was worth more than $10,000 at the time of said sale and that said Franklin paid only $100 in money therefor, and that the other consideration of said alleged sale was the agreement of said Franklin, to pay the debts of James Duncan & Co., amounting to about $60,000; and if they shall further find that said Franklin was the brother-in-law of said Hughes, and had been the agent of said Hughes & Smith, to conduct this Baltimore business up to the date of said alleged sale, and knew that said Hughes & Smith were threatened with serious embarrassments, and that said Franklin, at the time of said alleged purchase of said property, had not more than $500 of his own, and was wholly unable with his own means to pay said indebtedness, and was known so to be by said Hughes & Smith; and if they further find that said Hughes & Smith took no security from said Franklin for the performance of said covenant on his part and if they shall further find, that it was in the contemplation of the parties to the sale that said Franklin could only pay the debts out of the property so conveyed, and only by selling the same in the usual course of business; and that it was known to the said Hughes & Smith and Franklin and so understood by them at the time of said alleged sale that said Franklin would be unable to comply with his covenant to carry on the business he had purchased, unless said Hughes & Smith could aid him, and unless the firm of George Hughes & Co. could effect some arrangement with their creditors, and continue their business; and shall further find that said George Hughes & Co. failed to effect any arrangement with their creditors, and have ceased business, and that their assets will yield only about 16 2/3 cents on the dollar to their creditors; and shall further find that the said sale was evidenced by the bill of sale offered in evidence, and that the same was not placed upon record for about ten days after its delivery to said Franklin; and shall further find that shortly after the said alleged sale, the said Franklin executed an assignment for the benefit of creditors, and left the same in the hands of his counsel, to be delivered, if any attachment should be issued by any creditors of the said Hughes & Smith, or if the said George Hughes & Co. should be unable to effect a settlement with their creditors, then the said sale is void, so far as the plaintiffs are concerned, and will not enable the claimant to recover.

4. That if the jury shall find the facts stated in the third prayer of the plaintiffs, then the sale relied upon by the claimant is accompanied by such badges of fraud as throw discredit upon it, and put the burthen upon the claimant of proving that the same was bona fide and not intended either to defraud the creditors of the grantors, Hughes & Smith, or to delay and hinder said creditors in the collection of their claims.

5. That if the jury find that at the time of the alleged sale of the property mentioned in evidence by George Hughes and Thomas A. Smith, trading as James Duncan & Co., they were in embarrassed circumstances, and that they failed in business at or about the time of said alleged sale, and if they find that Franklin was wholly unable of his own means to pay the debts of James Duncan & Co., and was known to said Hughes & Smith so to be at the time of said alleged sale; and if they further find that it was known to the parties and so understood by them at the time of said sale, that said Franklin could not comply with his part of said contract, and was not expected to comply with his part of said contract, unless George Hughes & Co. could effect an arrangement with their creditors, and aid him, said Franklin, in meeting the debts of Duncan & Co., by obtaining extensions thereof or otherwise; and if they shall further find, that said George Hughes & Co. were in fact insolvent, and that they were unable to make any arrangement with their creditors, then the alleged sale to Franklin is not such as to sustain his claim of property in this case, and he is not entitled to their verdict on the issue joined.

6. If the jury find that notwithstanding the alleged sale by Hughes and Smith to Franklin, the said Hughes and Smith, or either of them, retained any interest in or control over the property so sold, the said alleged sale is void, and passed no title to said Franklin.

7. If the jury find from the evidence that the alleged bill of sale was not executed on the day it bears date, but that it was executed at a subsequent date and antedated, such antedating under the circumstances shown by the evidence in this case is a badge of fraud.

8. That the bankruptcy proceedings offered in evidence, subject to exception, are inadmissible for any purpose, under the pleadings in the cause, except for the purpose of throwing light upon the pecuniary condition of the defendants, Hughes & Smith, at the time of the alleged sale.

9. That the evidence offered, subject to exception, by the claimant, to show that one of the considerations for the execution of the bill of sale offered in evidence, was a covenant or agreement by the claimant to pay the debts of the grantors, is inadmissible to support such bill of sale.

10. That the evidence mentioned in the seventh prayer of the plaintiffs is inadmissible to support the alleged sale from the defendants to the claimant, if they find that the bill of sale offered in evidence was executed and delivered by the defendants to the claimant.

The plaintiff offered also the six following supplemental prayers:

1. That the claimant is not entitled to their verdict under his second prayer, if the jury find the facts stated in plaintiffs' first, second, third and fourth prayers.

2. That if the jury find that the facts stated in the plaintiffs' first and second prayers, the fact that the claimant paid money under the alleged purchase of property will not prevent said sale from being null and void.

3. That if any part of the claim of the plaintiffs was due at the time the attachment was issued, the jury cannot find for the claimant, under the first prayer of the claimant.

4. That there is no evidence in this case legally admissible to show the contract of sale alleged to have been made to Franklin, except the bill of sale, the deed and the covenant in writing, all dated January 8th, 1876, and offered in evidence, and all verbal negotiations between the parties as to said sale, were merged in said instruments, and are inadmissible to prove the terms of said contract of sale.--(This prayer is granted, but with the qualification that all the evidence may be considered in passing upon the bona fides of the transaction.)

5. That the proof necessary to establish the fraud in this transaction, is only such proof as would be necessary to satisfy the jury of any other fact, and the plaintiffs pray the court so to instruct the jury in connection with the claimant's sixth prayer, should the court grant said prayer.

6. In passing upon the question of fraudulent intent, the jury are at liberty to infer such intent from facts proven in the cause, and in order to ascertain the motives and designs of the parties, the jury may look to all the circumstances surrounding the transactions, and every fact, however trivial, which can throw light upon the subject.

And the claimant offered the six following prayers:

1. If the jury believe from the evidence that the attachment in this case was issued before the debt of James Duncan & Co. to the plaintiffs, upon which said attachment is founded, became due and payable, their verdict must be for the claimant.

2. If the jury believe from the evidence that the goods attached in this case were the property of the claimant, Franklin, at the time of issuing and levying the attachment, their verdict must be for the said Franklin.--(Granted as qualified by plaintiffs' first and second prayers.)

3. If the jury believe that George Hughes and Thomas A. Smith being the owners of the goods attached, did sell and deliver the same to the claimant, Franklin, on or about the 8th of January, 1876, in...