Valley Distilling Co. v. Atkins

• Decision Date: 25 February 1888
• Citation: 7 S.W. 137
• Parties: VALLEY DISTILLING CO. <I>v.</I> ATKINS.
• Court: Arkansas Supreme Court

7 S.W. 137

VALLEY DISTILLING CO.

v. ATKINS.

Supreme Court of Arkansas.

February 25, 1888.

Appeal from circuit court, Crawford county. R. B. RUTHERFORD, Judge.

Benton J. Brown, for appellant.

COCKRILL, C. J.

The issue, in this case, was whether the goods levied on by the sheriff under an attachment against W. O. Atkins, at the suit of the Valley Distilling Company, belonged to the defendant in the attachment at the time of the levy, or to the interpleader, H. G. Atkins. The only question necessary to consider is, was the evidence sufficient to sustain a verdict for the claimant? To show title in himself, he gave in evidence a bill of sale executed by W. O. Atkins to him on the 1st of November, 1885, transferring a lot of furniture, such as chairs, stoves, lamps, etc. The bill of sale recited that it was made for the purpose of paying a note which the vendee held against the vendor for $240, and interest; and it was proved by the attorney who had been employed to draw the instrument that at the time of its execution the vendee delivered to the vendor a note which he supposed to be the one described as the consideration in the bill of sale. For the creditor, it was proved, or admitted as true, upon the trial, that W. O. Atkins was in business as a saloon-keeper, at the time of the sale, and was hopelessly insolvent; that H. G. Atkins was his brother, and was employed by him at the saloon; that the property described in the bill of sale was the furniture and fixtures in the saloon; that W. O. Atkins was held out as the owner of the saloon and the furniture, after the alleged sale as before, until the property was seized under attachments against him on the 28th of December, following, when H. G. Atkins, for the first time, was known to lay claim to the property.

The continuance in the possession of the vendor, after the sale, "was a sign of trust," as was said in Twyne's Case, 2 Coke, 212, but according to the rule adopted by this court, not a conclusive sign. Hempstead v. Johnston, 18 Ark. 123, and cases cited; Puckett v. Reed, 31 Ark. 131; Railway v. Page, 35 Ark. 304. It is prima facie evidence of a secret trust, which is fraudulent as to creditors, and, if unexplained, the presumption becomes conclusive. The courts are at variance with each other, and sometimes with themselves, as to how far a vendee must go in such a case in his explanation of the transaction and possession, to exonerate himself. 2 Kent Comm. *520, *529, note [a.] But that the burden of proof is shifted to him, to show, at least, the bona fides of the sale, is well settled; and to establish bona fides, a sufficient consideration for the purchase must be shown. In this case, the proof of the consideration fell short of the mark, and there was no other effort made to show good faith. In a contest between a creditor and his debtor's vendee, where circumstances are adduced in evidence establishing, as in this case, prima facie fraud against the creditor, which shifts the burden of showing bona fides to the party relying upon the transfer, the recital of consideration in the instrument of sale is regarded res inter alios acta, and not competent evidence to prove the consideration. Bump, Fraud. Conv. 594; Prescott v. Hayes, 43 N. H. 593; Manufacturing Co. v. Dysart, 62 Pa. St. 62; Hubbard v. Allen, 59 Ala. 283; Rose v. Colter, 76 Ind. 590; Horton v. Dewey, 53 Wis. 410, 10 N. W. Rep. 599. There must be evidence dehors the instrument. Baskins v. Shannon, 3 N. Y. 310. The acknowledgment of the receipt of payment in the instrument evidencing the transfer, or a receipt indorsed upon it by the vendor, is not sufficient. Bolton v. Johns, 5 Pa. St. 145. The proof of consideration must go beyond a mere paper acknowledgment of it, such as would be binding between the parties. Hanford v. Artcher, 4 Hill, 295, 296. The surrender, by the vendee, of a note or an account, which, the instrument recites, is due from the vendor to him, is not sufficient. It must be proved that the supposed debt is an honest one. It must not be left to inference. Merrill v. Locke, 41 N. H. 486; Hanford v. Artcher, supra; Allen v. Cowan, 28 Barb. 99; White & T....