Gere v. Murray

• Decision Date: 01 January 1861
• Parties: WILLIAM B. GERE vs. WILLIAM P. MURRAY.
• Court: Minnesota Supreme Court

Page 213

6 Minn. 213

WILLIAM B. GERE vs. WILLIAM P. MURRAY.

Supreme Court of Minnesota.

Appeal from order of the district court, Ramsey County.

Murray brought the action to recover possession of personal property assigned to him by a firm of merchants, for the benefit of their creditors. The defendant (below) justified his taking, as United States marshal, under an execution against the assignors, alleging that the assignment was void as to their creditors.

The questions here arose on defendant's requests for instructions to the jury, which are set forth in the opinion.

Points and authorities for appellant: —

The court erred in refusing to charge the jury as requested by defendant, "that the assignee had no right to carry on the business at retail, and that if it was so intended by the assignors at the time of the assignment, it is void; and in charging that such an intent would only be strongly indicative of fraud, but the question would be for them to decide." Case, p. 20, line 1. And also in refusing to charge, "that if the intent of the assignors at the time of the assignment was to prevent a forced sale of their property, and in order that the business might be carried on and the goods sold at retail, the deed is void;" and charging, that it was a question for the jury, and that such an intent, if so found, would be strongly indicative of fraud. The court virtually charged on those two requests, that two questions were before the jury — one as to the existence of a certain intent in the minds of the assignors at the time of the assignment; the other as to whether that intent was a fraudulent one. The defendant desired the question to be left to the jury as to whether those intents did exist; but if the jury should find that the intent did exist, he then claimed it was a question of law as to whether such an intent was a fraudulent one. The court below, in its opinion on the motion for a new trial, says: "The question for the jury was not simply whether any particular fraud existed at the time of the assignment, but whether, in view of all the circumstances before them, that intent was a fraudulent one." And then goes on to say that it must also appear that the assignee knew of the intent, and co-operated with it. It is the simple intent on the part of the grantor, not its accomplishment or success, or its failure. These assignors may have intended to defraud, and yet the assignee might have prevented their carrying out their intent. The assignment is nevertheless void, for the good faith of the assignee cannot counterbalance the bad faith of the assignors. The assignee in this case was not a purchaser for a valuable consideration, and so not entitled to protection under sec. 5, p. 484, Burrill on Assignments. Haggerty v. Palmer, 6 Johns. Ch., 437; Slade v. Van Vechten, 11 Paige, 21. And, consequently, if the assignment was made with an intent to hinder, delay, or defraud, on the part of the assignors, it is void, and the judge in the court below actually so charged. Case, p. 19, lines 13 to 16.

Conceding, then, that it is not necessary that the assignee should be a party to, or cognizant of, the fraudulent intent on the part of the assignors, let us examine the question whether what is a fraudulent intent is a question for the court or jury.

It is for the law and court to decide what intent is legal and proper, and what illegal and fraudulent. It is for the jury to decide what intent exists; that intent once found, the court must characterize it. Because, if the jury is to judge what is a fraudulent intent in one case, they must in all, and if the evidence showed an intention on the part of the assignor not to deliver the property, but to retain it to support his family, it would be equally competent for them to declare such an intention not fraudulent, because his family needed it. The question of fraudulent intent, says Judge Nelson, is a "mixed question of law and fact." That is, it is for the court to declare and charge what is a fraudulent intent, and for the jury to find as to whether that intent exists. Suppose this precise intent which is embodied in the instructions asked for, had been apparent on the instrument of assignment, would it not have been fraudulent on its face? Would not the court have charged that such an intent was illegal, and that, it appearing on the face of the instrument, the evidence of the existence of such an intent was conclusive, and the verdict must be for the defendant? And is there any difference between the intent appearing on the face of the instrument, and the same intent being shown aliunde, except in the character and conclusiveness of the evidence produced to prove it.

Thus it seems from these cases that the execution of a chattel mortgage with the intention that the mortgagor shall retain and dispose of the goods, is a "violation of a principle of law," and that when that intention appears on the face of an instrument, it is conclusive evidence of such intent, and the instrument is held void by the court, or the jury instructed to so find it void. When such an intent is shown aliunde, it is the duty of the court to declare such an intent a "violation of a principle of law," and if the jury find such an intent to have existed, to find against the instrument. Thus there is really no such thing as fraud in law and fraud in fact. Fraud is one and the same; the difference is in the evidence of it. It simply amounts to this, that an instrument which bears on its face the violation of some principle of law, furnishes conclusive evidence of its own invalidity, and has been called fraudulent in law in contradistinction to cases where the evidence of the violation of such principle has appeared aliunde. In either case the law decides what may and what may not be done, what intent is lawful and what not; and the jury must decide whether the principles of law as expounded to them, have been violated or not.

It can hardly be necessary to argue that, if the assignors had incorporated into their assignment, clauses stating "that the assignee should carry on the business at retail, and that he should make no forced sale, but that the business should be continued and the goods sold at retail," the deed would be void. We claim that we were entitled to go to the jury upon the question whether we had not shown such an intention on the part of the assignors outside of the instrument, and that if the jury believed that we had shown such an intention, we were entitled to a verdict. If, under the assignment as it is, the assignee had carried out such an intention, he would have been guilty of a breach of trust. Hart v. Crane, 7 Paige, 37. And certainly an act that would be a breach of trust on the part of the assignee, if intended by the assignor at the time of the assignment, would be a fraudulent intent. Hart v. Crane, 7 Paige, 37; 18 N. Y., 497.

Points and authorities for respondent: —

The sixth and seventh instructions asked by the defendant's counsel, and which the court refused to give in the terms asked, we propose to consider together.

Sixth. "That the assignee had no right to carry on the business at retail, and that, if it was so intended by the assignors at the time of the assignment, it is void." Upon which "the court charged that the assignee had no right to carry on the business at retail, and that if it were so intended by the assignors, such an intent would be strongly indicative of fraud, but that the question would be for the jury to decide."

Seventh. "That if the intent of the assignors at the time of the assignment was to prevent a forced sale of their property, in order that the business might be continued and the goods sold at retail, the deed is void." Upon which the court charged "that it was a question for the jury, and that such intent, if so found, would be strongly indicative of fraud."

The view of the counsel and these instructions were clearly based upon the decisions of the supreme court of the State of New York, which created the necessity of that provision of statute from which ours is copied, making "the question of fraudulent intent in all cases a question of fact, and not of law." See Comp. Stat., 459, sec. 4.

The requests are, that the court will submit to the jury and direct them to find only, whether the assignors intended that certain acts or things should transpire after making the assignment; whether the intent existed to have the business carried on at retail; whether they intended to prevent a forced sale, and if so, then the court should decide that such intent was fraudulent per se, not submitting the question of fraudulent intent to the jury, but submitting to them the question only, whether an intent existed that certain things should be done, which, if done, would be evidence of a fraudulent intent, and asking the court to determine that the fraudulent intent did exist as a matter of law. Suppose the jury had found that the assignors did intend to prevent an immediate forced sale of the property, and intended that the goods should be sold at retail, is such finding anything more than evidence of the fraudulent intent? Strong evidence, perhaps, but not conclusive; it may be explained by other evidence equally strong and satisfactory to the jury, to show that no fraudulent intent, in fact, existed, and that is the very question for the jury (not the court) to determine.

Nearly every assignor in embarrsssed circumstances, who makes an assignment in good faith for the...