Wright v. Lee

• Decision Date: 09 November 1897
• Parties: WRIGHT v. LEE et al.
• Court: South Dakota Supreme Court

10 S.D. 263

72 N.W. 895

WRIGHT

v.LEE et al.

Supreme Court of South Dakota.

Nov. 9, 1897.

Appeal from circuit court, Lake county; Joseph W. Jones, Judge.

Action by George L. Wright against William Lee and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Corson, P. J., dissenting.C. O. Bailey, J. H. Voorhees, Hosmer H. Keith, A. B. Kittredge, and Miller, Noyes, Miller & Wahl, for appellants. T. B. McMartin, for respondent.

FULLER, J.

This cause, now engaging our attention for the third time, is based upon a claim of wrongful conversion, and was instituted by plaintiff, the assignee of an insolvent corporation, against the defendant sheriff and his co-defendants, who are attaching creditors, to recover the value of a large amount of personal property seized and sold on execution in satisfaction of their demands against the assignor. This appeal is by the defendants from a judgment of $27,182.70 in favor of plaintiff, and from an order overruling a motion for a new trial. In our former opinion, reported in 2 S. D. 596, 51 N. W. 706, and again, on rehearing, in 4 S. D. 237, 55 N. W. 931, the facts are fully stated; and some of the legal propositions here discussed in the briefs of counsel are there determined, and which, so far as applicable to the questions now presented, will govern as the law of the case. Bank v. Gilman, 3 S. D. 170, 52 N. W. 869;Lumber Co. v. Mitchell, 4 S. D. 487, 57 N. W. 236;Tanderup v. Hansen (S. D.) 66 N. W. 1073.

As this court must act upon, and treat as a verity, the bill of exceptions settled in the court below, and is without jurisdiction to change the record certified on appeal as prescribed by law, we decline to grant appellants' motion to amend the bill of exceptions to conform to an affidavit submitted therewith, and upon which the application is based. Cluck v. State, 40 Ind. 263; 3 Enc. Pl. & Prac. 502.

In support of their claim that the assignment for the benefit of creditors effected January, 10, 1890, upon which respondent relies, was not made in good faith, but fraudulently, appellants offered in evidence a mortgage, executed by the assignee and his wife, dated December 14, 1894, covering a quarter section of land which was occupied as a government homestead by the assignee and his family at the time the deed of assignment was executed, but upon which a small dwelling house and some fences had been built, apparently for the convenience of the corporation, and at its expense, while solvent, with the understanding that the respondent, who was one of its officers, would convey the land to the corporation as soon as final proof was made, and title from the United States obtained. For the same purpose, and by the introduction of a tax deed dated October 11, 1894, appellants offered to prove that respondent had permitted 160 acres of unincumbered land included in the assignment to be sold for delinquent taxes, and that the certificate had been assigned to a relative of the wife of respondent, to whom the deed was executed by the county treasurer. They also offered to show that a mortgage for $2,500, bearing date March 10, 1885, executed by the corporation, upon certain lands subsequently transferred by the assignment, was foreclosed, and a sheriff's' deed executed, on the 16th day of January, 1893, to the above-mentioned relative, as the assignee of the certificate of sale. The foregoing testimony was very properly excluded. By attaching and selling on execution all the available assets of the insolvent corporation, appellants rendered it impossible for respondent to pay the taxes and mortgage indebtedness; and the mere fact that the land, as usual in such cases, brought much less at tax and foreclosure sales than its estimated value, has no tendency to prove fraud in the inception of an assignment made for the benefit of creditors years before. Mere conjectures, founded upon alleged statements not made or assented to by the immediate parties to a deed, and which may be fairly attributed to honest motives, are wholly insufficient to establish the existence of a conspiracy to defraud creditors by a general assignment purporting to be for their exclusive benefit. Ruled by the principle that a conveyance valid when made remains so, the courts have uniformly held that an assignment for the benefit of creditors, free from fraud in its inception, duly executed, and of record, is not invalidated by subsequent fraudulent acts. Goodwin v. Kerr, 80 Mo. 276; Wilson v. Berg, 88 Pa. St. 167; Browning v. Hart, 6 Barb. 91;Sullivan v. Smith, 15 Neb. 476, 19 N. W. 620. All testimony rejected has been carefully considered, and we find nothing indicating fraud to which the assignor and assignee were privies, or tending, however faintly, to reflect a backward light by which to discern the original intent of the parties to the assignment, which, if prompted by honest motives and perfected in good faith, remains unimpaired and in full force.

The contention of appellants that no sufficient delivery and change of possession are shown by the evidence, and that the court committed reversible error in its charge to the jury with reference thereto, is neither sustained by the law, nor justified by the facts which the record discloses. It is shown that practically all the available assets of the insolvent company consisted of valuable horses, cattle, and farm machinery, all of which were kept upon a ranch which the corporation owned, and concerning which respondent testified, in substance, that when the assignment was made he was living in a cottage about 60 rods from what was known as the “Ranch House,” situated near the barn where the horses and cattle were kept; that, ...