Murch v. Swenson

• Decision Date: 07 May 1889
• Citation: 42 N.W. 290,40 Minn. 421
• Parties: MURCH v SWENSON.
• Court: Minnesota Supreme Court

40 Minn. 421

42 N.W. 290

MURCHvSWENSON.

Supreme Court of Minnesota.

May 7, 1889.

(Syllabus by the Court.)

1. Where the debtor remains in possession of property which once belonged to him, and which his creditor seeks to reach as fraudulently transferred, his acts and declarations, while thus in actual possession, tending to characterize his possession, are admissible in evidence against the vendee.

2. The change of possession required by Gen. St. 1878, c. 41, § 15, must be actual and continued. A mere formal and constructive taking of possession, and then leaving the property in the actual possession of the vendor, is not enough to exclude the presumption of fraud on creditors.¹

3. A sale of chattels not followed by an actual and continued change of possession is presumptively fraudulent, not only as to existing creditors at the time of the sale, but also as to those who become creditors of the vendor at any time while the property remains in his possession. Gen. St. c. 41, § 16. ²

Appeal from district court, Hennepin county; YOUNG, Judge.

Henry J. Gjertsen, for appellant.

Davis & Farnham, for respondent.

MITCHELL, J.

Action for the wrongful taking and conversion of a sum of money on August 19, 1887. The defendant justifies the taking as sheriff under an execution against the property of one J. H. Murch, plaintiff's brother. As the money, which was taken from the drawer in a saloon, was admitted to be the proceeds of sales of the stock of liquors contained in it, the sole question was whether this stock was, as to creditors of J. H. Murch, his property, or that of plaintiff. Plaintiff, who is a non-resident, was not present or a witness at the trial. His brother, the defendant in the execution, was the principal witness in his behalf. He testified, in substance, that he had been engaged in the saloon business at this same stand for some time as proprietor, but that about August 1, 1886, he had sold out the whole business to plaintiff, who paid him therefor $2,000; that plaintiff was here temporarily at the time of the sale, and “took possession” of the property, but “was called away, and left witness in possession;” that “he has been away since;” that he [witness] “continued to run the business just the same;” that “he continued to conduct the business pretty near the same for his brother as he did before this transfer.” In fact, the evidence shows that the business was run by J. H. Murch after the alleged transfer precisely, in all respects, as before, without any apparent change of possession or proprietorship, except that the word “agent” was attached to his name on the saloon window. There was not a word of evidence produced as to how or on what terms he was conducting the business for his brother, or how the latter, a non-resident, came to engage in the saloon business in Minneapolis. Neither was there a particle of evidence that from the day he left the state, shortly after the pretendedtransfer, down to the day of trial, he ever personally took part in, or interested himself in, the business. On cross-examination witness was asked whether, from August, 1886, to August, 1887, his brother had any license to sell liquor at the place, and whether he (the witness) did not procure the license in his own name. This the court excluded. The defendant also offered to prove that while J. H. Murch was thus in possession of the property, and as late as July, 1887, he applied in his own name for a license to sell liquor at that place, and also while thus in possession he claimed to be proprietor, and had letter-heads and cards printed for use in the business, on which were the words “J. H. Murch, Proprietor.” The defendant also offered in evidence the license issued to J. H. Murch on July 20, 1887, and posted up in the saloon continuously from that date to the date of the levy. All of this the court excluded, and, when the evidence closed, directed a verdict for plaintiff.

All of these rulings were, in our opinion, erroneous. While it is true, as a general rule, that the declarations of a vendor after sale and delivery of possession cannot be given in evidence against the vendee, yet it is equally true that, where...