Hasie v. Connor

• Decision Date: 06 July 1894
• Parties: GEORGE E. HASIE v. J. W. CONNOR, as Sheriff of Cowley County
• Court: Kansas Supreme Court

37 P. 128

53 Kan. 713

GEORGE E. HASIE v. J. W. CONNOR, as Sheriff of Cowley County

Supreme Court of Kansas

July 6, 1894

Error from Cowley District Court.

ALL the material facts are stated in the opinion.

Judgment reversed and new trial granted.

Asp Shartel & Cottingham, for plaintiff in error:

1. The court erred in instructing that the burden of proving bona fides rested on the plaintiff, and in refusing to instruct that the burden of proving fraud devolved upon the defendant. See Wait, Fraud. Con., § 242; Martin v. Fox, 40 Mo.App 664; Smith v. Collins, 10 S. Rep. 334; Austin v. Bowman, 81 Iowa 257; Allen v. Kirk, 81 id. 658; Lane v. Statt, 1 S.D 107; Tenbrook v. Brown, 17 Ind. 410; Lininger v. Heron, 18 Neb. 450; Adams v. Ryan, 61 Iowa 733; Schultz v. Hoagland, 85 N.Y. 468; Mills v. Hunt, 15 S.W. 518; Whitson v. Griffis, 39 Kan. 214; Long v. West, 31 id. 298, 301; Curry v. Lloyd, 22 F. 267; Kenney v. Williams, 89 Mo. 139; Cadere v. Guidry, 7 S. Rep. (La.) 232; Nadal v. Britton, 112 N.C. 180; Rice v. Rogers, 34 P. 796.

2. The court erred in instructing that actual or constructive notice of a purpose on the part of the plaintiff's mortgagor to hinder, delay or defraud other creditors would defeat the plaintiff's mortgage.

On the facts of the case, the law is with the instructions refused and against those given. See Kohn v. Clement, 58 Iowa 589; Owens v. Clark, 78 Tex. 547; Hodges v. Coleman, 79 Ala. 103; Bell v. Throop, 140 Pa. 641; Lewy v. Fischl, 65 Tex. 311; Inglehart v. Willis, 58 id. 306; Strang v. Swafford, 81 Iowa 695, and cases cited; York &c. Bank v. Carter, 38 Pa. 446; Hirsh v. Richardson, 65 Miss. 227; Cooper v. Bank, 11 S. Rep. (Ala.) 760; Nadal v. Britton, 112 N.C. 180, 16 S.E. 914; Rathell v. Grimes, 35 N.W. 394; Howell v. Bowman, 10 S. Rep. (Ala.) 644; National Bank v. Naill, 52 Kan. 211.

The cases of Gollober v. Martin, 33 Kan. 252, Phillips v. Reitz, 16 id. 396, Kurtz v. Miller, 26 id. 314, and McDonald v. Gaunt, 30 id. 693, are not in conflict with the rule herein contended for.

3. The court erred in instructing the jury that when one brother prefers another as a creditor they must both act in good faith.

We submit that the relationship of the parties does not change the rule so as to make the fraud of a mortgagor alone a sufficient ground for setting aside the mortgage. That was the plain and palpable effect of this charge. See Martin v. Fox, 40 Mo.App. 664; Smith v. Collins, 10 S. Rep. 334; Tenbrook v. Brown, 17 Ind. 414; Schultz v. Hoagland, 85 N.Y. 468; Lininger v. Heron, 18 Neb. 450; Allen v. Kirk, 81 Iowa 658; Mills v. Hunt, 15 S.W. 518.

The whole scope of this charge, together with the specific parts pointed out in this assignment of error, is utterly inconsistent with the case of Lewis v. Hughs, 49 Kan. 23. The instruction criticised in that case in tenor is very similar to the instruction complained of here. If that case be followed, it will work a reversal of this case.

4. The court erred in instructing upon the facts and peremptorily charging the jury what facts they ought to take into consideration.

The court certainly has a right to say to the jury what facts they may consider, providing no undue or misleading prominence is given to any particular fact, and the jury be left free to value or to reject any fact as having no evidential bearing on the case. But when a fact bears such relation to the case that as a matter of law the jury may accept it as a factor in the case or reject it altogether, then the peremptory command of the court to the jury to consider that fact is an invasion of the province of the jury.

J. D. Houston, and W. H. Boone, for defendant in error:

The facts were admitted, and the law is plain that this suit could not be maintained by George E. Hasie till the attachment suits against him were in some manner disposed of. 16 Kan. 466; 18 id. 288; 22 id. 110; 23 id. 733; 24 id. 280. Even if the goods were attached as the property of M. S. Hasie, the rule is not changed. See Talbot v. DeForest, 3 Gr. (Iowa), 586; Cobbey, Repl., § 257.

1. There was no error in the instruction. Did the court place the burden of disproving fraud on the plaintiff, and neglect to place the burden of proving fraud on the defendant? We think not. It clearly charges the burden of proving the debt and mortgage on plaintiff, and straightway proceeds to charge the burden on defendant of proving, by a preponderance of the evidence, the allegations that the mortgage was fraudulent. When the whole instruction is read, this interpretation is inevitable. See 2 Thomp. Tr., § 2407.

It is always incumbent on plaintiff to make out his case and show title against the world in a replevin action. Boot and Shoe Co. v. Ware, 47 Kan. 483; Implement Co. v. Parlin & Orendorff Co., 51 id. 566; 2 Cobbey, Ch. Mort., §§ 740, 749; Cobbey, Repl., § 484.

"When a mortgage is taken for more than is due from a person known to be insolvent, it is incumbent on the mortgagee to show that the mortgage was executed in good faith, for honest purposes, and to satisfactorily explain why the excess was thus secured." 17 N.W. 200; 25 id. 826; 2 Cobbey, Ch. Mort., § 777; Herm. Mort., p. 256, § 104; Jones, Ch. Mort., § 339; 33 Kan. 567; 53 Wis. 598; 23 id. 359.

Most of the authorities cited by opposing counsel on this question are where the creditor is plaintiff, attacking the conveyance for fraud. But where the mortgagee is plaintiff in a replevin action, attacking the creditor for goods or their value, as in the case at bar, the plaintiff has necessarily the burden of proving his case as alleged. Cobbey, Repl., § 784; 47 Kan. 483. "It becomes immaterial upon whom the burden of proof rests, when all the evidence concerning the transaction to be inquired into is introduced." 41 Kan. 265. When this doctrine is applied to this case, the instruction complained of, even if wrong, is immaterial, and was not prejudicial.

2. As to the second assignment of error: It is alleged that the court wrongfully instructed the jury that one taking a mortgage with the knowledge that the mortgagor executed it with the intent to defraud creditors cannot recover. Counsel say such intent must have been participated in by the mortgagee. In 49 Kan. 23, however, the court uses this language: "A creditor in purchasing property of his debtor who is insolvent, and who he knows is attempting to dispose of his property to defraud other creditors, must act in the utmost good faith," etc.

3. As to the third and fourth assignments of error: The court did not instruct as there alleged. The court simply told the jury that a failing debtor may prefer a creditor, and if he is a brother to the preferred one, it makes no difference whatever, but "all parties must act in good faith."

4. If there is error in the instructions, it is not such as to demand a reversal of the judgment.

The court virtually instructed the jury that knowledge on the part of the mortgagee of the fraudulent intent on the part of the mortgagor would preclude recovery by the mortgagee. Now, even if the law required the court to charge that not only knowledge of but participation in the mortgagor's fraudulent intent was necessary, to preclude the mortgagee, still, under the facts of this case, the error does not demand a reversal.

Our contention is, that certain admitted facts in the case show George E. Hasie's participation in the fraud conclusively, by raising presumptions of fraud of which there is no attempt at rebuttal, and thus his participation in the fraud becomes a fact in the case for the jury to consider and act on accordingly. When the case was given to the jury, therefore, it was no longer a question of fact as to whether he did or did not participate in the fraud, to be determined on conflicting evidence, but it was an established fact that he did so participate, determined by undisputed evidence, and by presumptions of which no rebuttal or explanation was attempted. See 28 Kan. 138; 32 id. 546; Bump, Fraud. Con., pp. 24, 25, 43; 32 Kan. 568; 40 id. 753; 13 Am. Rep. 893; 45 Kan. 52; 22 Fla. 561; same case, 1 Am. Rep. 212; 2 Cobbey, Ch. Mort., §§ 777, 783, 784, 760; 55 Iowa 114; Jones, Ch. Mort., §§ 338, 339.

JOHNSTON, J. All the Justices concurring.

OPINION

JOHNSTON, J.:

A stock of goods was seized upon attachment by the sheriff of Cowley county as the property of M. S. Hasie, with a view of appropriating the same to the payment of the claims of several of the creditors of M. S. Hasie. An action of replevin was soon brought by George E. Hasie, a brother of M. S. Hasie, to recover the same goods. He claimed them upon a mortgage executed November 29, 1888, to secure an indebtedness of his brother to him, which had existed for a period of eight months. The debt was evidenced by a note for $ 12,978.93, given on March 10, 1888, and upon which there was a credit of $ 5,690.69, purporting to have been made on November 1, 1888. The mortgage was recorded on November 30, and possession of the goods was soon afterward taken by the plaintiff. The sheriff answered, denying the allegations of the petition, and alleging that the goods levied upon belonged to M. S. Hasie, and were held under orders of attachment issued in an action wherein George E. Hasie was a party, which action was pending when the replevin action was begun. And he further averred, that the mortgage was fraudulent, without consideration, and void. The trial resulted in a verdict in favor of the sheriff, and several grounds of error are assigned for reversal.

It is first contended that the action was not maintainable, because it was commenced while the attachment suits against him and his brother were pending and undetermined. It appears that George E. Hasie was named as a party defendant in the two...