Lipscomb v. Lyon

• Decision Date: 21 April 1886
• Citation: 27 N.W. 731,19 Neb. 511
• Parties: CHARLES H. LIPSCOMB, PLAINTIFF IN ERROR, v. CLARA A. LYON, DEFENDANT IN ERROR
• Court: Nebraska Supreme Court

27 N.W. 731

19 Neb. 511

CHARLES H. LIPSCOMB, PLAINTIFF IN ERROR, v. CLARA A. LYON, DEFENDANT IN ERROR

Supreme Court of Nebraska

April 21, 1886

ERROR to the district court for Jefferson county. Tried below before MORRIS, J.

AFFIRMED.

C. B Letton and W. O. Hambel, for plaintiff in error, cited Wake v. Griffin, 9 Neb. 47. City Bank v Hamilton, 34 N.J.Eq. 162. Besson v. Eveland, 26 Id., 471. Babcock v. Eckler, 24 N.Y. 623. Halsey v. Sinsebaugh, 15 N.Y. 485. State v. Hannett, 54 Vt. 83. Hendershott v. Henry, 19 N.W. 665.

B. S. Baker and W. H. Snell, for defendant in error, cited: Hill v. Bowman, 35 Mich. 191. Miller v. Kirby, 74 Ill. 242. Bump. Fraud Con., §§ 44, 183. Montieth v. Bax, 4 Neb. 170. 1 Greenleaf Evidence, §§ 436, 437. Id., §§ 90, 227. People v. Elyea, 14 Cal. 145.

OPINION

COBB, J.

This was an action of replevin brought in the court below by Clara A. Lyon, plaintiff, against Charles H. Lipscomb, defendant, for the possession of a certain stock of saddlery, harness, etc., of the alleged value of $ 600, which, as she alleged in her petition, the said defendant had, in his capacity of sheriff of Jefferson county, seized and carried away by virtue of certain writs of attachment against the property of W. A. Lyon. The defendant answered, admitting that he was sheriff of said county; that he had taken said goods by virtue of certain writs of attachment in his hands against the property of W. A. Lyon; "and further alleging that the only right and title of the said Clara A. Lyon claimed by her in or to said property arose by virtue of a pretended contract of sale entered into on or about September 5th, 1883, by W. A. Lyon and said Clara A. Lyon, his wife; that at the time said pretended sale was made, said W. A. Lyon was wholly insolvent, of which fact said Clara A. Lyon had full notice and knowledge; that no consideration was paid by her on said pretended sale of said goods; that said pretended sale was made and entered into by said W. A. Lyon and Clara A. Lyon with the intent and sole purpose of hindering and delaying the creditors of said W. A. Lyon; and that the same was not a bona fide sale of said property; that she well knew at the time said pretended sale was made that the same was for the purpose aforesaid; that no change of possession of said goods ever took place; and that at the time said Lipscomb, as such sheriff, levied upon said goods and chattels, they were the property, and in the possession of said W. A. Lyon," etc. There was a reply in and by which the plaintiff denied all of the material allegations of new matter set up in the said answer.

There was a trial to a jury with a verdict and judgment for the plaintiff. The defendant brings the cause to this court on error, and assigns the following errors:

"1st. The verdict is not sustained by sufficient evidence.

"2d. The verdict is contrary to law.

"3d. The verdict is contrary to the fourth, fifth, and sixth instructions of the court.

"4th. The court erred in refusing to give the second and sixth instructions asked by plaintiff in error.

"5th. The court erred in giving the first, second, and third instructions asked by defendant in error and excepted to by this plaintiff.

"6th. The court erred in excluding a certified copy by court reporter of questions numbered from 1 to 10, inclusive, and answers thereto of the evidence of Clara A. Lyon given on a former trial of this cause in which she testified that at the commencement of this action she was not the owner of the property in controversy.

"7th. That the verdict is contrary to the evidence, and given through prejudice or sympathy.

"8th. The court erred in allowing defendant in error to read in evidence those parts of the deposition of A. I. Lyon objected to by this plaintiff.

"9th. There was error of law occurring at the trial excepted to by plaintiff in error.

"10th. The court erred in excluding evidence offered by plaintiff in error."

These assignments will be examined in convenient groups rather than in detail.

Grouping the 1st, 2d, and 3d assignments together, I here copy the 4th, 5th, and 6th instructions given by the court on its own motion, the same being the basis of the 3d assignment:

"Fourth. The statute provides that 'every sale made by a vendor of goods and chattels in his possession, or under his control, and every assignment of goods and chattels by way of mortgage or security, or upon any condition whatever, unless the same be accompanied by an immediate delivery, and be followed by an actual and continued change of possession of the things sold, mortgaged, or assigned, shall be presumed to be fraudulent and void as against the creditors of the vendor, or the creditors of the person making such assignment, or subsequent purchasers in good faith, and shall be conclusive evidence of fraud, unless it shall be made to appear on the part of the persons claiming under such sale or assignment, that the same was made in good faith, and without any intent to defraud such creditors or purchasers.'

"Fifth. The court instructs the jury as a matter of law, that any sale or conveyance of personal property to be valid as against the creditors of the seller, must be accompanied and followed by a change in the possession of such property, from the seller to the purchaser, so far as the situation of parties and the character of the property will reasonably admit of a change of possession.

"Sixth. Transactions between husband and wife in relation to the transfer or sale of property from one to the other, by reason of which creditors are prevented from collecting their just dues, should be scrutinized very closely, and the bona fides of such transactions should be established beyond question."

There was evidence tending to prove that the plaintiff intermarried with Worthy A. Lyon in the state of Illinois in 1879; that at that time the said Worthy A. Lyon was entirely destitute of capital or means; that in the month of February, 1880, the said Worthy A. Lyon, being engaged working for his father, and being desirous of engaging in business for himself, and his wife having about that time received from her guardians a sum of money, he loaned of her the sum of twenty-four hundred dollars, with the agreement that he was to go out West and look up a place of business, and repay her in property as soon as he could make it out of his business; that this money was advanced to the said Worthy A. Lyon only as a loan, and not as his money or as a gift; that no part of said money had ever been paid to the plaintiff until on or about the 3d day of September, 1883, when the said Worthy A. Lyon conveyed to her the stock of goods in question to apply on said loan of money at the sum of $ 800, and the house and lot in which they lived and he did business, at the sum of $ 1,000. This was done before the levy of the attachments by the defendant. The evidence of the immediate delivery of the goods by Worthy A. Lyon to the plaintiff, and of the sale being followed by an actual and continued change of possession of the goods is not shown in the abstract sufficiently to dispense with proof of good faith on the part of the plaintiff; but this, I think, she has sufficiently supplied. Whatever may formerly have been the case, under the present state of our statutes and decisions there is no legal reason why a wife may not become the creditor of her husband, nor being such, why she may not be preferred by him over other creditors. It is true that courts will look with scrutiny, if not with suspicion, upon all sales or transfers of property of a debtor in failing circumstances to members of his own family; but, if upon such examination they are found to be honest and based upon sufficient consideration, they will be upheld. I therefore think that the verdict is sustained by sufficient evidence, and that it follows the instructions above quoted.

The following are the second and sixth instructions prayed by plaintiff in error, the alleged refusal to give which constitutes the fourth assignment of error:

"Second. The jury are instructed that every sale of property made by the parties with the intent to hinder, delay, or defraud creditors in the collection of debts is fraudulent and void as to such creditors, even though made for a valuable consideration.

"Sixth. If you find from the evidence that Clara A. Lyon permitted her husband to use her money in his business for a long period of time, without any evidence of indebtedness having passed between the parties, she is not such a creditor of his that she may be preferred to other creditors in the distribution or appropriation of his property, and any such appropriation, whether by sale or otherwise, whereby other creditors are hindered, delayed, or defrauded in the collection of their just claims, is fraudulent and void as against such creditors." Sixth refused. Plaintiff excepts.

According to the abstract the first of the above instructions, to-wit the one marked Second, was given; it will, therefore, not be further considered. The sixth instruction, which was refused, and such refusal duly excepted to by plaintiff in error, was, as I think, properly refused. It seeks to recognize a difference, both in law and in fact, between bona fide debts owing by a husband to his wife and those owing to other creditors. We have seen that there is no difference in law, yet that, owing to the facilities as well as the temptations afforded and stimulated by the family relation for fraudulent concealments and transfers of property in cases of business disaster, the law has laid the duty upon courts and juries to examine with jealous care and scrutiny into the facts of a case where it is suggested that the family relation has been used as the channel and cover for...