Pettit v. Parsons

• Decision Date: 31 August 1893
• Court: Utah Supreme Court
• Parties: ORSON H. PETTIT, RESPONDENT, v. ELIAS H. PARSONS, APPELLANT

33 P. 1038

9 Utah 223

ORSON H. PETTIT, RESPONDENT, v. ELIAS H. PARSONS, APPELLANT

Supreme Court of Utah

August 31, 1893

APPEAL from a judgment of the district court of the third district and from an order refusing a new trial, Hon. Charles S. Zane judge. The opinion states the facts except the following:

The court instructed the jury that there was no evidence of any fraud in the assignment. The bill of sale attempted to be introduced was made four days before the assignment by Webb and Olsen to William H. Roy. A chattel mortgage was also executed to said Roy on the same day. This evidence was objected to as immaterial and incompetent. Counsel offering the evidence admitted that the bill of sale was a separate transaction from the assignment, that the assignee had no knowledge of the transaction, and that Roy never took possession of the goods mentioned in the bill of sale. The objection was sustained by the court. As to the second chattel mortgage, it was executed to Albert T. Webb, brother of one partner, to secure a bona fide partnership debt, on the morning of the day on which in the afternoon the assignment was made. Webb took possession of the whole stock of goods, but in the afternoon, when the assignment was made surrendered his possession to the assignee. This chattel mortgage was objected to and excluded.

The deed of assignment was admitted in evidence. It assigned all the partnership property and all the individual personal property of the partners except that exempt from execution. Under it both Roy and Albert T. Webb were preferred creditors.

The appellant (defendant below) also offered to show that for the purpose of obtaining credit the said Webb and Olsen fraudulently misrepresented their financial standing during the month of December, 1890, just prior to making the assignment. This evidence was excluded.

Affirmed.

Mr Sidney W. Darke, for the appellant.

The execution of the bill of sale, of the chattel mortgages and of the assignment were all parts of one transaction, and they, being fraudulent, vitiated the assignment. Rothenberg v. Bradley, 10 So. 922; Hutchinson's Executrix v. Boltz, 14 S.E. 267; Barlett v. Cleavenger, 14 S.E. 273; Carnahan v. Schwab, 127 Ind. 507; Brown v. Work, 47 N.W. 192; Baldwin v. Short, 125 N.Y. 553; Hill v. Woodbury, 49 F. 138; Sylvester v. Hesslein, 5 Ohio Cir. Ct. 256; Weber v. Mick, 131 Ill. 520; Smith v. Perine, 121 N.Y. 376; Burnham v. Haskins, 79 Mich. 35; Stove Co. v. Wilson, 80 Iowa 697; Ball v. Sawyer, 62 Vt. 367.

Messrs. Rawlins and Critchlow, for the respondent.

They cited Emerson v. Center, 118 U.S. 1; Estees v. Gunter, 122 U.S. 454; Peters v. Bain, 133 U.S. 690; Brashear v. West, 7 Pet. 608; Reed v. McIntyre, 98 U.S. 508; Mayor v. Hellman, 91 U.S. 496; Brooks v. Marbury, 11 Wheat. 78.

BARTCH, J. MINER, J., and SMITH, J., concurred.

OPINION

BARTCH, J.

In this case the plaintiff was in the possession of certain goods as assignee, and, while so in possession, the defendant, being United States marshal, seized the goods under a writ of attachment, and sold them. The plaintiff brought this action to recover possession, or, if delivery could not be obtained, then for the value of the goods. The jury returned a verdict in his favor for the sum of $ 880 and costs, and, a motion for a new trial having been overruled, the defendant appealed to this court.

Counsel for defendant contends that the assignment made by the firm of Webb & Olsen for the benefit of their creditors, and under which the plaintiff claims possession, was fraudulent and void. There are some charges of fraud as to Webb & Olsen set up in the answer, but there is no allegation connecting either the assignee or the creditors with it. Nor does the evidence show that the assignee or creditors participated in any fraud, or were connected therewith. In fact, it appears to be admitted that the assignee knew nothing of the assignment before it was made, nor until the papers were handed to him executed, and he was asked to serve as assignee. The defendant offered to introduce in evidence a bill of sale and chattel mortgages, made to creditors prior to the assignment; but, there being nothing to show that the assignee had anything to do with the transactions prior to the assignment, and no allegations of fraud as to the creditors appearing in the answer, the court refused to admit them. Counsel complains of this ruling by the court. Fraud will not be presumed. It must be alleged, and the party alleging it must prove it by competent evidence. Even if these instruments were fraudulent, they would not invalidate the assignment, unless it were shown that the assignee or beneficiaries participated in the fraud. The defendant made no offer to show that such was the case, and therefore the ruling of the court was proper. Other evidence offered for similar purposes was likewise properly excluded.

Counsel lays much stress upon the fact that one of the preferred creditors is a brother of one of the assignors. While courts will always scrutinize such transactions, yet it is not an element of fraud per se. Such a preference, when the assignor acts in good faith, may be given in the exercise of a lawful right, and will not affect the conveyance. It is a right which results from the absolute ownership of property. The supreme court of Mississippi, in Eldridge v. Phillipson, 58 Miss. 270, said: ...