Martin v. Steele

• Decision Date: 15 February 1901
• Parties: MARTIN, ATTORNEY GENERAL, v. STEELE, JUDGE
• Court: Idaho Supreme Court

63 P. 1040

7 Idaho 497

MARTIN, ATTORNEY GENERAL, v. STEELE, JUDGE

Supreme Court of Idaho

February 15, 1901

FRAUDULENT SALES-INSTRUCTIONS-WRIT OF ERROR.-It is error to instruct the jury in a criminal prosecution under sections 6519 and 6540 of the Revised Statutes that a sale made with intent to defraud creditors is not a fraudulent sale within the purview of said statutes.

(Syllabus by the court.)

An original proceeding for writ of error.

Frank Martin, Attorney General, and J. W. Reid, for Plaintiff in Error, file no brief.

S. B Kingsbury and J. F. Ailshie, for Defendant in Error, file no brief.

QUARLES C. J. Sullivan and Stockslager, JJ., concur.

OPINION

QUARLES, C. J.

This is an application for a writ of error to review the action of the lower court in instructing the jury. There are two errors assigned, the first being: "The court erred in advising the jury to acquit the defendants, or either of them." The second being as follows: "The court erred, before so advising the jury, in instructing them as follows: 'The jury having been called in this case, and all are present. On yesterday, at the conclusion of the state's testimony the defendants made a motion for the court to advise the jury to acquit the defendants. The motion was extensively argued yesterday afternoon, and the court has extensively examined the matter. This information has no definite name applied to it by the statute. It is a conspiracy to defraud creditors and by this information the defendants are accused of this crime. The information charges, and it was necessary to charge, that they did combine, confederate and agree to willfully and unlawfully sell--not necessarily a criminal sale, but unlawful, not according to law. The section upon which this information is based is 6540, which is as follows: [Reading it.] The section under which they claim this information is filed is section 6519, in addition to section 6540, which reads as follows: [Reading it.] The state takes the position that any sale made with the intention to hinder, delay and defraud creditors comes within this section, and that the word "fraudulently" has practically no significance; that the sale is fraudulent whenever it is done to hinder, delay and defraud creditors. The court does not think that position is correct, and I will advert to it further on. That this case will be more fully understood, and without going fully into testimony, the testimony shows, in substance, that Mr. Hunte was the owner of a large stock of goods, and that Mr. Sweet called at his house upon other business along about the 7th of January, or the 6th, and that Mr. Hunte proposed to him to sell him his goods. He didn't go there for that purpose. Mr. Sweet told him at that time that he would consider the matter, or something of that kind, and went back to Grangeville. He then came to see him again, and Mr. Hunte, according to his testimony, states: That he told him that his creditors were worrying him to death. They were after him for money, and he didn't have money to pay them with, and offered him his goods for fifty cents on the dollar, and fifteen cents for hauling the goods, or freight charges. That when Sweet returned he told him that he would give him sixty cents on the dollar. That Hunte agreed to the sale, and the goods were taken from Nez Perces to the storehouses of the defendant in Cottonwood and Grangeville. That, as Hunte swears, probably one thousand dollars' worth of the goods were sold at that time, and he says were sold at a sacrifice. That the note was given for eight thousand dollars by Sweet, Richardson and Wilkinson to Mr. Hunte. As the court looks at this case, it is practically a question of, where a man is heavily indebted, and another man knows he is indebted, and knows that he is not going to pay his creditors, or he tells him, at least, he is not going to pay his creditors, the purchase price, can he buy those goods, even at a bargain, and would the sale be a good-faith sale, or a fraudulent sale, if he so bought them? The court would rather these burdens would not be placed upon it, but, when they are, the court has to meet them without flinching, and with the best consideration it can give them under the circumstances. If a party knows a man is indebted, it certainly does not give to the creditors the right to claim that they hold a lien against his property so that they cannot sell it, because a party knows that another is largely indebted; and, even though he may know that it is his intention to pay the money that he gets for the goods to his creditors, it ought not to prevent the sale of the goods. The creditors have no lien upon the goods. There is no such thing as a purchase money lien, but this is to creditors generally. This is for defrauding creditors generally of their rights. Upon all the facts produced in this trial, under this statute, a mere sale of goods, knowing that the party is largely in debt--a mere sale of goods to a party who knows that the party is in debt--is not enough. There must be a fraudulent sale. The fraudulent sale consists of some scheme between the defendant, Hunte, and Wilkinson, Richardson, and others, whereby these goods will be so appropriated or concealed, or something different done with them from a mere sale--a transfer from one party to another. There must be something in the sale itself that is fraudulent. For instance, Mr. Sweet, Richardson, and Wilkinson might agree that they would hold these goods in trust for Mr....