Thomas v. Beals

• Decision Date: 22 May 1891
• Citation: 154 Mass. 51,27 N.E. 1004
• Parties: THOMAS et al. v. BEALS.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

154 Mass. 51

27 N.E. 1004

THOMAS et al. v. BEALS.

Supreme Judicial Court of Massachusetts, Suffolk.

May 22, 1891

COUNSEL

J.A. Maxwell and S.H. Hudson, for plaintiffs.

Frank Paul, for defendant.

OPINION

HOLMES J.

This is a bill by assignees in insolvency brought to set aside a sale by the former assignee, Loeser, to the defendant, Beals, of the interest of Edward Henshaw, one of the insolvents, in the real and personal estate of his wife, who died intestate. That estate consisted of Mrs. Henshaw's share in the estate of her father, George W. Simmons. The facts found and reported by the judge who tried the case disclose a sale in fraud of Henshaw's creditors, but we are asked to revise the findings on the evidence, which also is before us. It is only in a very clear and exceptional case that this can be done, when the court of first instance has seen and heard the witnesses. Rau v. Von Zedlitz, 132 Mass. 164; Francis v. Daley, 150 Mass. 381, 383, 23 N.E. 218; Hodgdon v. Cummings, 151 Mass. 293, 295, 23 N.E 836; Chase v. Hubbard, 26 N.E. 433, (Essex, Jan 1891.) We have examined the evidence with some anxiety, but do not find this to be such a case.

There was ample ground for finding that the former assignee Loeser, sold with a fraudulent intent to get what he could, and to appropriate the proceeds as he did. The more doubtful part of the case concerns the intent of Beals, the purchaser. It well might be found that he intended to save the interest for the insolvent, and that he thought it worth more than the price paid, $1,000, if held for the insolvent. But there is a question whether he can be taken to have supposed that the price was less than could be got at a fair sale. The report states that it was agreed that the property of George W. Simmons was worth the amount at which it was appraised, and that the real estate was appraised at $255,560 above the incumbrances. If the statement of the appraisal is correct, there can be no doubt about the correctness of the finding. But it appears from a part of the testimony, which seems not to have been controverted, which was merely an abstract of the documents in evidence, and which, if we were to conjecture, we should think it likely that the judge must have believed, (an assumption which rarely can be made,) that the above-mentioned sum of $255,560 was subject to incumbrances of $116,433. Other evidence, which it seems almost equally likely was deemed credible, shows other elements of reduction and uncertainty in what Beals bought, sufficient to raise a doubt whether a larger price could have been expected from a sale in the market.

On the other hand, if the judge who tried the case should adhere to his report upon the supposed mistake being called to his attention, we should not be able to say that he was wrong, and, as no motion to recommit the report was made before us, we hardly are warranted in assuming that, as it stands, it does not represent his deliberate opinion. Again, we cannot say that the evidence does not warrant a finding that the property was worth a good deal more than it was likely to sell for to an outsider, that Beals knew what it was worth, and possibly more unfavorable inferences. Taking into account the dangerous nature of the transaction, we are disposed to think that the judge was right in not allowing it to stand, although we are not inclined to attribute morally culpable motives to Beals.

The defendant, Beals, seemingly does not much object to the sale being set aside, if he receives back the price which he paid, and the main question is whether that shall be made a condition of the decree. The sale to him was not a sale by the insolvent himself, and therefore is not within Pub.St. c. 157, §§ 96, 98, as to preferences, etc. Even such a sale is only voidable. Freeland v. Freeland, 102 Mass. 475, 477; Morgan v. Abbott, 148 Mass. 508, 20 N.E. 165. Neither was it void because the schedule of Henshaw's property did not disclose the property in question at the time when the license was granted to Loeser. The license was formally complete and adequate. If it was induced by suppression of facts on the part of Loeser, that would go only to the motives for decision, not to the form of the judicial act, and therefore only would make the decree voidable, not void. See Fairbanks v. Snow, 145 Mass. 153, 154, 13 N.E. 596. Moreover, it seems that the requirements of Pub.St. c. 157, § 50, as to how the assignee shall sell, are merely directory. Tuite v. Stevens, 98 Mass. 305, 307; Crowley v. Hyde, 116 Mass. 589, 590.

The only ground on which the sale can be attacked is that although in form it correctly pursued a valid license, yet in fact it was fraudulent as against creditors. But the only fraud to which Beals was ever constructively a party was the giving and taking of an inadequate price. He had no notice of Loeser's intent to misappropriate the proceeds. Loeser was the proper person to receive them, and when they came to his hands they...