Linn v. Wright

• Decision Date: 01 January 1857
• Citation: 18 Tex. 317
• Parties: JOHN J. LINN v. WRIGHT AND OTHERS.
• Court: Texas Supreme Court

18 Tex. 317

JOHN J. LINN

v.WRIGHT AND OTHERS.

Supreme Court of Texas.

1857.

Where a merchant in failing circumstances makes an assignment of his stock in trade and notes and accounts, to a trustee for the benefit of certain creditors, although it is not forbidden by law that the trustee should employ the debtor to keep open the store and retail the goods, and collect the notes and accounts, yet the debtor will be deemed, prima facie at least, to conduct himself in his dealing with the property, in accordance with the understanding between himself and the trustee; the latter is bound to take notice of the manner in which the debtor conducts himself in such employment, and if the latter be permitted to use and control the assigned effects in a manner wholly inconsistent with the purposes of the trust, and as his own, it will be evidence that the assignment was intended not only to secure the preferred creditors, but also to secure to the assignor himself certain benefits out of the property assigned, to the hindrance of the other creditors in the enforcement of their rights; and, that such a purpose will render the deed fraudulent and void as to the deferred creditors, does not admit of question.

There is no such rule of evidence or principle of law, as that, in order to authorize a jury to deduce from circumstantial evidence the conclusion of fraud, the circumstances must be of so conclusive a nature and tendency, as to exclude every other hypothesis. If the evidence is admissible, as conducing in any degree to the proof of the fact, the only legal test applicable to it, upon such an issue, is its sufficiency to satisfy the minds and consciences of the jury (subject, of course, to the power of the court to grant a new trial, as in other cases). 1 Tex. 326.

See this case for facts admissible in evidence to prove fraud in an assignment by a debtor in failing circumstances, where the trustee permits the debtor, under what agreement soever, to remain in possession and manage the property.

As a general rule, the mere omission to annex the usual schedules to an assignment for the benefit of creditors, is not, in itself, sufficient to avoid the assignment. In some instances, and when taken in connection with other circumstances, this fact of omission may be considered a badge of fraud.

Where a merchant, in failing circumstances, assigned “all and singular his stock in trade, consisting of goods, wares and merchandise, and named in the schedule hereunto annexed, dated August 24th, 1852” (the assignment being made on the 9th of September), but the schedule was not annexed, the court said its absence was a suspicious circumstance, and unless explained, or unless there was satisfactory proof of what property was included in the general reference ““all my stock in trade,” so that it might certainly appear for what the assignee was responsible, the court, it would seem, might well have sustained the motion to exclude the assignment from the consideration of the jury.

Instructions will not be deemed erroneous (although excepted to in general terms) merely because they do not embrace every aspect in which the party was entitled to a verdict. If the charge of the court was thought to be imperfect or incomplete in its presentation of the law of the case, it was the right of the party to supply any supposed omission or imperfection by asking the proper instruction. Where this is not done, the mere omission of the court to give instructions which would have been proper, is not error. 21 Tex. 621.

Where the judge charged the jury that if they believed from the evidence that the assignor intended to defraud or delay his creditors by the transfer of his property, and that the assignee was cognizant of such intention at the time, the assignment would be fraudulent, this court said, the word delay was evidently employed in the charge of the court, and was doubtless understood by the jury, in the sense in which it is used in the statute; not merely in reference to a question of time, but to the interposition of obstacles in the way of creditors, with the fraudulent intent to hinder and delay; and in that sense it was properly held to invalidate the assignment.

In a trial of the right of property, where the issue formed under the direction of the court was whether the property belonged to the claimant, but the claimant introduced evidence tending to prove that the property was worth less than the amount at which it had been appraised, and requested the court to instruct the jury that if they found for the plaintiffs they should find the value of the property, which was refused, and the jury did not find the value of the property, it was held there was error. (It did not appear that it was called to the attention of the court, that the value of the property was not made a part of the issue.) 12 Tex. 43;17 Tex. 57.

Where the affidavit of claim to property taken in execution, asserted the title of the claimant in general terms, and what purported to be the claimant's answer, on file when the issue was made up, alleged his title in the same general terms, and the issue made by the parties, under the direction of the court, was, whether the property levied on was the property of the claimant, it was held that the plaintiff must be allowed to introduce evidence in confession and avoidance of whatsoever title the claimant might introduce in evidence.

After the formation of the issues for the trial of the right of property taken in execution and claimed by a third person, the parties are not bound to anticipate further pleadings, and unless in some manner brought to the attention of the court, or the notice of the party, in time to reply or take issue upon them, they cannot properly be considered as changing the issues previously formed, or as affecting the right to introduce evidence applicable to those issues.

Had the claimant pleaded (the particulars of) his title in the first instance; or had his amended answer (which pleaded the particulars of his title) been filed before the issue was made up, or, had it been brought to the notice of the court and the opposite party when filed, the latter might have been required to plead specially the matter relied on to invalidate it, in order to the formation of the appropriate issues, and the admission of evidence to impeach the title.

Where property taken in execution was claimed by a trustee under an assignment for the benefit of certain creditors, and the issue formed by the parties under the direction of the court was, whether the property was the property of the claimant, and the court instructed the jury that if the assignment was intended by the assignor to defraud or delay his creditors, and the trustee was cognizant of such intention at the time, the assignment would be fraudulent; and the jury found that “the assignment was made for the purpose of delaying the payment of the creditors, and that the property in controversy was subject to execution;” the court reversed the judgment on other grounds, and said nothing as to the sufficiency of the verdict.

Error from Victoria. Tried below before the Hon. Fielding Jones.

This was a trial of the right of property in a stock of goods, wares and merchandise, levied upon by virtue of executions in favor of the defendants in error against Lavius F. Chapman, and claimed by the plaintiff in error as his property. It was before this court once before, in 1856, on a writ of error by the present defendants in error, and the decision then made will be found reported in 16 Tex. 34.

The affidavit of Linn's claim stated that the sheriff did, on the 23d day of April, 1853, by virtue of the following executions against Lavius F. Chapman, issued, etc., to wit: (here follows a description of the executions, amounting in all to $3,815.35), levy upon a certain lot of goods, wares and merchandise, as the property of said Chapman, and which was then in his, deponent's, possession, in the storehouse in the town of Victoria, known as Chapman's storehouse; the said L. F. Chapman at the time of said levy being his agent and clerk, and disposing of said merchandise for and on his account. A full and complete schedule and inventory of said merchandise is attached by the sheriff to said executions, and to which reference is here made. And he further states that he claims said property, levied upon as aforesaid, as his property and that he has a good and perfect title to the same, and that this claim is made in good faith, and that he is not a party in any of the aforesaid executions.

The goods were appraised under the direction of the sheriff at $3,916.35. March 11th, 1854, an issue was formed, under the direction of the court, as follows: Are the goods, wares and merchandise, levied upon by virtue of the several executions against L. F. Chapman, and claimed by John J. Linn in his affidavit on file in this cause, the property of the said John J. Linn, the claimant?

And it appearing to the court, by the return of the sheriff upon the said executions, that the said goods, wares and merchandise were in the possession of L. F. Chapman at the time of the levies made thereupon, it is therefore adjudged by the court that the affirmative of the issue made in this cause rests with and upon the said John J. Linn, claimant.

There was an exception to the ruling of the court, that the affirmative of the issue rested upon the claimant; but the former trial having resulted in the claimant's favor, it was not called to the attention of this court on the first appeal, and would therefore probably be considered as waived. It was not assigned as error on this occasion, nor noticed in the brief of the counsel for the plaintiff in error. There occurred in the transcript, before the entry of the formation of the issue, but marked filed September 9th, 1856, doubtless a mistake for 1853, what was called in the margin of the transcript, “Answer of claimant.” It was in the...