Reynolds v. Weinman

• Decision Date: 17 January 1894
• Citation: 25 S.W. 33
• Parties: REYNOLDS et al. v. WEINMAN et al.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

25 S.W. 33

REYNOLDS et al. v. WEINMAN et al.¹

Court of Civil Appeals of Texas.

January 17, 1894.

Appeal from district court, Burnet county; W. A. Blackburn, Judge.

Action by J. Weinman & Co. against N. O. Reynolds and others on the bond of said Reynolds as sheriff. Judgment for plaintiffs. Defendants appeal. Reversed.

The other facts fully appear in the following statement by COLLARD, J.:

The statement of the nature and result of the suit made by appellants, and accepted as correct by appellees, is as follows: "Appellees (plaintiffs below) instituted suit to August term of United States circuit court for western district of Texas, and on April 4, 1891, it was by consent transferred to the district court of Burnet county, Texas. Plaintiffs alleged that on September 16, 1887, they owned a certain stock of goods, wares, and merchandise in Lampasas, Texas, and that on said date N. O. Reynolds, defendant, acting in his official capacity as sheriff of said county, wrongfully seized and took from among the said stock of goods, and from the possession of plaintiffs, goods, etc., of the value of $3,500, and converted the same to his use; and that in making such seizure said Reynolds selected the goods taken out of the larger stock, thus breaking the selection and variety of the stock, and so damaging the remainder $2,000. Plaintiffs also allege damages to the name and good will of their business, aggregating $2,500. They allege the execution by defendant Reynolds as principal, and his codefendants as sureties, of his official bond in the sum of $5,000 as such sheriff, and declare on said bond. They ask judgment against all defendants for the first two elements of damage, and against Reynolds for the last. Defendants answer by a general denial, and specially justify the seizure under a writ of attachment out of the district court of Lampasas county against Feigl Bros. in favor of Hamilton-Brown Shoe Company, alleging that the goods claimed by plaintiffs were the property of Feigl Bros., and had been fraudulently transferred by them to plaintiffs. Plaintiffs recovered judgment for $3,996.82. Defendants made a motion for a new trial, covering the grounds embraced in the assignment of errors, which was overruled, to which they excepted, and now prosecute this appeal."

The first and second assignments of error are: First. "The court erred in charging the jury that, `if the Feigls were indebted to plaintiffs and others, and were insolvent or in failing circumstances, then they (the Feigls) had the right to prefer one creditor to another, although the Feigls and the preferred creditor may know that such preference will delay or defeat all other creditors in the collection of their debts,'—which charge constituted an independent and complete charge." Second. "The court erred in charging the jury as follows: `So, in this case, if you believe from the testimony that the Feigls were indebted to plaintiffs and others, and were unable to pay all their creditors, and, for the purpose of paying what they owed plaintiffs, sold them the goods in dispute, and sold no more than was reasonably necessary to pay the debt, then you will find for the plaintiffs, and say so by your verdict,' — which constituted a complete and independent charge, withdrawing from the jury every consideration except a question as to whether the debt owing and paid to plaintiffs bore a reasonable proportion to the goods transferred to them, and not stating any rule by which such reasonable proportion should be determined."

Miller & Lauderdale, for appellants. Fiset & Miller, for appellees.

COLLARD, J., (after stating the facts.)

The charge of the court correctly presented the law as established by a number of decisions in this state. A debtor may be insolvent, and yet make a valid sale of his property to pay a preferred creditor, provided no more goods are conveyed than are reasonably sufficient to pay the debt, even though it may be the intention of the debtor, and though the sale may have the effect, to hinder and delay other creditors in the collection of their debts. The preferred creditor has the right to payment of his debt, and can take goods of the debtor in payment sufficient to pay his debt, whatever may be the motive or intention of the debtor as to other creditors. The taking of goods in payment of an honest debt no more than reasonably sufficient to satisfy the same cannot be a fraud upon other creditors, if the real intention of the transfer is the payment of an honest debt. Owens v. Clark, 78 Tex. 547, 550, 15 S. W. 101; Jacobs v. Totty, 76 Tex. 348, 13 S. W. 372; Lewy v. Fischl, 65 Tex. 320; Greenleve v. Blum, 59 Tex. 126; Ellis v. Valentine, 65 Tex. 548; Edwards v. Dickson, 66 Tex. 614, 615, 2 S. W. 718; Harness Co. v. Schoelkopf, 71 Tex. 422, 9 S. W. 336; Allen v. Carpenter, 66 Tex. 140, 18 S. W. 347. If the sale is simulated, and the intention is to cover up the property of the debtor to the prejudice of other creditors, it would be invalid, as a fraud upon such other creditors; or, if more goods are taken than are reasonably sufficient to pay the debt, — that is, if there be an unreasonable disproportion between the amount of the debt and the goods taken, known to the creditor, or that ought to be known to him, — the sale would be void as against other creditors. Edrington v. Rogers, 15 Tex. 188; Harness Co. v. Schoelkopf, supra.

It was not error, as insisted by appellants, to instruct the jury that the burden of proof was upon the defendants, upon the whole case, to establish the alleged fraud in the sale. Appellants argue that, when it was shown that one or more badges of fraud were shown, the burden of proof shifted to the plaintiffs to show the bona fides of the sale. We think that, when the burden of proof was once cast upon the defendants to show the illegality of the sale on account of fraud, it did not shift upon that issue at any stage of the evidence, but rested upon them during the entire trial, and it was not improper to so instruct the jury. The proof of a badge of fraud does not...