Lininger v. Raymond

• Decision Date: 01 November 1881
• Citation: 9 N.W. 550,12 Neb. 19
• Parties: J. B. LININGER, PLAINTIFF IN ERROR, v. ISAAC M. RAYMOND ET AL., DEFENDANTS IN ERROR
• Court: Nebraska Supreme Court

9 N.W. 550

12 Neb. 19

J. B. LININGER, PLAINTIFF IN ERROR, v. ISAAC M. RAYMOND ET AL., DEFENDANTS IN ERROR

Supreme Court of Nebraska

November 1, 1881

ERROR to the district court for Lancaster county. Tried below before POUND, J. The opinion states the case.

REVERSED AND REMANDED.

James E. Philpott and J. L. Caldwell, for plaintiff in error.

Assignment cannot be vacated by the defendants by showing that there was fraud or misrepresentation on the part of the debtor in the creation of the debt. Horwitz v. Ellinger, 31 Md 492. Mattison v. Damerest, 4 Robt., 161. Pearce v. Jackson, 2 R.I. 35. Reinhardt v. Bk. of Ky., 6 B. Mon. 252. Kennedy v. Thorpe, 51 N.Y. 174. S. C 2nd Daily 258, 3 Abb. Pr. N. S. 131. Waverly Bank v Halsey, 57 Barb., 249. Sale of goods and taking in payment therefor notes, if done in the ordinary course of business, is no badge of fraud. Loeschiz v. Baldwin, 38 N.Y. 326. Subsequent sales by assignee cannot revest property in debtor, or have a retroactive effect, so as to avoid the assignment. Klapp v. Shirk, 13 Penn. State, 589. Shattuck v. Freeman, 1 Met. 10. Wooster v. Stanfield, 11 Iowa 128. Baldwin v. Buckland, 11 Mich. 389. Cyaler v. McCurtry, 40 N.Y. 221.

Harwood & Ames, for defendant in error.

If it appears that the object of the assignment was to delay creditors and effect a settlement, it is void. Work v. Ellis, 50 Barb. N.Y. 512.* Keteltas v. Wilson, 36 Barb., N.Y. 298. But the fraudulent intent of the assignors, accompanied by fraudulent disposition of their property, and the preference of a creditor on the eve of the assignment and in contemplation of it, render it void, although the assignee had been ignorant of both the fraud and preference. Bump on Fraudulent Conveyances, 361. 2 Perry on Trusts, § 590, note 2. Moss v. Humphrey, 4 Green. Iowa 443. Fuller v. Ives, 6 McLean, 478. Waverly National Bank v. Halsey, 57 Barb., 249.* Ruble v. McDonald, 18 Iowa 493.* Schultz v. Hoagland, N. Y. Com. Pleas, Feb. 1880, 9 Reporter, 355.* Hubbard v. McNaughton, Michigan, April, 1880, 5 N. W., Rep., 251.* Flammigon v. Lampman, 12 Mich. 58. Neither the assignee, nor the creditors of the assignors, are purchasers for a valuable consideration, and it is not necessary that knowledge of the fraud should be brought home. 2 Perry on Trusts, § 590, note 2. Hairgrove v. Willington, 8 Kan. 480.* Johnson v. Laughlin, 7 Kan. 359. And for that reason an assignee cannot maintain an action to set aside fraudulent conveyances made by the assignor. Pillsbury v. Kenyon, N. J. Chan., Oct. 1879, 9 Reporter, 517.

OPINION

LAKE, J.

This action was brought to recover the possession of a stock of goods by the plaintiff as assignee. The defendants justified their detention as attaching creditors of the plaintiff's assignors, and the finding and judgment were in their favor. After a careful review of the case, and of the points made by counsel for the defendants, we find no ground upon which that judgment can be upheld.

Most of the questions now presented were before this court and decided in the case of Lininger v. Raymond, 9 Neb. 40, 2 N.W. 359, and will be treated as settled. The only new question deserving of any notice is whether upon the testimony dehors the deed of assignment itself, that instrument is shown to have been fraudulent. As to the assignee himself, there is not a syllable of evidence tending in the slightest degree to impeach his motives in accepting the trust confided to him, or to show any lack of the utmost good faith in all that he had done in its execution. Indeed, the defendants seem to have so much confidence in his integrity and truthfulness, as to make him their sole witness in the presentation of oral testimony as to his connection with the transaction, and his statement stands uncontradicted, that he had no knowledge of the insolvency of the assignors, or that they contemplated making an assignment, until the evening before it was made, when he was requested to serve in the capacity of assignee.

In addition to the oral testimony of the assignee, the only evidence on which the defendants relied to establish fraud in the assignment, was an agreed statement of facts, to the admissibility of which both parties, by stipulation, were at liberty to object, and which the plaintiff did, to most thereof, on the ground of immateriality. To epitomize this statement of facts, in substance, it merely shows:

First, That some twenty days before the assignment, the assignors took "an inventory of the stock in trade, goods, wares and merchandise," which they then had on hand, which then amounted in value to about three thousand six hundred dollars. That, in addition to this stock, they had notes and accounts for goods sold to the nominal amount of three thousand three hundred dollars.

Second, That some eight days after taking this inventory, one of the assignors, for the purpose of obtaining credit, stated the facts of this inventory to the defendants, to whom the assignors were already indebted for a considerable amount, and thereby obtained a further credit of one hundred and one dollars and ninety-eight cents.

Third That between the taking of the inventory and the date of the assignment, there was realized, by two of the assignors, by the sale and disposal of said goods for cash, and the notes of purchasers on thirty and sixty days time, and used for the use of their families, in all about eighteen hundred dollars; and during the same time they "received payment, partly in cash, but mostly in notes payable in thirty and sixty days from date, about twenty-four hundred dollars in amount of said book accounts." Of these notes, "about ten...