Kuykendall ex rel. Middleton, Perry & Co. v. McDonald

• Citation: 15 Mo. 416
• Parties: KUYKENDALL, USE OF MIDDLETON, PERRY & CO., v. MCDONALD & VINEYARD.
• Decision Date: 31 January 1852
• Court: United States State Supreme Court of Missouri

15 Mo. 416

KUYKENDALL, USE OF MIDDLETON, PERRY & CO.,

v.MCDONALD & VINEYARD.

Supreme Court of Missouri.

January Term, 1852.

ERROR TO PLATTE CIRCUIT COURT.

LEONARD, for Plaintiff. 1. A failing debtor may lawfully give a preference in the payment of his debts, and such a disposition is valid, although the debtor's object in giving the preference is to exclude from any share in his property, his unpreferred creditors, and therefore the court erred in refusing the plaintiff's 3rd, 11th and 12th instructions. 2. A valuable consideration is not such a consideration only as is equal to the value of the property sold. It is a valuable consideration, although less than the actual value of the property sold, and upon this ground the plaintiff's 7th instruction ought to have been given. 3. The 10th section of our statute against fraudulent conveyances provides four things. First. That the vendor's remaining in possession shall raise a presumption of fraud against the conveyance. Second. That this presumption shall stand until it is rebutted by proof that the conveyance is honest. Third. That the burden of showing the honesty of conveyance shall rest upon those who claim under it, and, Fourth. That this question shall be a question of fact to be submitted to and passed on by the jury; and, upon this construction of the statute, the court erred in refusing the plaintiff's 6th and 10th instructions, and in giving the defendant's 5th instruction. Hanford v. Archer, 4 Hill's (N. Y.) R. 272; Doan v. Eddy, 16 Wend. 528. 4. The defendant's 7th instruction is too broad. If the sale were upon any secret trusts for the benefit of the grantor, it is of course fraudulent and void. But the instruction goes beyond this; it sets the jury to guessing whether the vendor was to derive any other advantage from it than the payment of his debts, and declares if he did, the conveyance is void. 5. The defendant's 2nd instruction ought not to have been given.

HAYDEN & GARDENHIRE, for Defendants. 1. The Circuit Court did not err either in giving the instructions prayed for by the defendants or in refusing those which were rejected that were moved by the plaintiff. Digest 1844-5, p. 528, § 10; 12 Wend. 297; 16 Wend. 523; 17 Wend. 53; 2 Kent's Com. 530. 2. The court very properly refused to set aside the non-suit and grant the plaintiffs a new trial upon their motion to the court therefor.

SCOTT, J.

McDonald, the defendant, having obtained a judgment against William G. Burnes and John S. Light, levied his execution upon property in the possession of Light. Thereupon, Middleton, Perry & Co., claimed the property, and demanded an inquisition by the sheriff to ascertain its ownership Middleton, Perry & Co., having obtained a verdict, McDonald, the plaintiff in the execution against Burnes & Light (but defendant here), then gave to the sheriff a bond of indemnity, and required him to sell the property levied on. This was accordingly done, and this suit was brought to the use of Middleton, Perry & Co., the successful claimants of the property, seized under execution, in the name of James Kuykendall, to whom, as sheriff, the bond was executed.

The defense to this action was, that the conveyance of the property to Middleton, Perry & Co., executed by Light to them, and under which they claimed, was void, being made to hinder and delay his creditors. In consequence of the directions of the court below, the plaintiff took a non-suit, and after an unsuccessful motion to set it aside, sued out a writ of error from this court.

Middleton, Perry & Co., claimed the property levied on by virtue of a conveyance made by Light, the 6th April, 1846, and recorded. The debt due by Light to McDonald, on which there were judgment and execution, was payable the 3rd June, 1845. The property levied on, and other property not taken by the sheriff, were conveyed to Middleton, Perry & Co., for the consideration of $1,500, as expressed in the deed Light also executed to Middleton, Perry & Co. a deed for two hundred and forty acres of land, in consideration of the sum of $1,000. The land was public land, and, in the opinion of some of the witnesses, not worth more than the government price, though at the trial it was proved to be then worth $1,200. The property mentioned in the first deed was, at the time of sale, delivered to Middleton, Perry & Co., and immediately restored to Light, who also continued in possession of the land conveyed. There was evidence conducing to show that the property conveyed by Light was worth much more than was paid for it. The property levied on by the sheriff was found in possession of Light. Evidence was produced showing that Light was indebted to Middleton, Perry & Co. in a considerable sum at the time of the conveyances, and of their assuming to pay, and paying debts due by him to others for a large amount.

It would be an endless task to copy and review all the instructions that were given and refused on the trial of this cause, and it is not deemed necessary, as the argument in this court was confined singly to the question whether the remaining in possession by the vendee, after an absolute sale of personal property, is fraud per se, and so to be declared by the court as a matter of law; or whether under the 10th section of the act concerning fraudulent conveyances, it only creates a presumption of fraud, which may be repelled by evidence satisfactory to the jury that the sale was made in good faith and without any intent to defraud creditors.

This revives the old question, whether the continuing in possession of personal property after a sale is a fraud in law, and so to be declared by the court; or whether it is a fact to be put to the jury as evidence of fraud, who are the triers whether the transaction is fraudulent or not. The contrariety of opinion entertained by...