Opinion
Submitted on the part of the respondent, September 24th, 1870
Decided December 28th, 1870
W.C. Ruger, for the appellants.
L. Seymour, for the respondents.
The grounds for the motion to dismiss the complaint were entirely untenable. The difference between the liabilities and the assets, as to their value, was not of such a nature as to afford a presumption of fraud. The nominal difference was not large; and the statement of the assets included debts due to the assignor at their face, without reference to the question whether they were collectible or not. As to that fact, there was no evidence. Where the assets are clearly in excess of the liabilities of the debtor, to a large extent, it may raise a presumption of an intent to hinder and delay creditors in the collection of their just demands, and amount to a prima facie case of fraud. But the facts here warranted no such conclusion, as a matter of law.
As to the note to Glezen, so far from the evidence showing it to be for a fictitious debt, it showed a valid moral obligation resting on the debtor to pay it. The fact that the promise was verbal, and could not have been enforced, if Mr. Lusk had insisted upon the objection that the promise was for the debt of a third party and within the statute of frauds, does not render the debt or the note fictitious. It was not obligatory on Mr. Lusk to interpose that defence, either morally or legally. It is entirely within the option of the debtor whether he will set up the statute of frauds against the performance of such a promise or not. The proof was that he had made the promise, and, although verbal, honesty as well as honor required its faithful performance.
The question of the change of possession of the assigned property, although there was no contradiction in the evidence, was one of fact for the jury. The circumstances relied on, although suspicious, were not inconsistent with an honest purpose. As to the real estate, the title of two parcels conveyed to his sons was openly changed; and the evidence of consideration was altogether on the side of the plaintiffs, and tending to sustain its validity. Lusk and his family resided on the farm till it was sold by the assignees in the following August; he had nothing to do with the crops; those were gathered by his son on shares, under an agreement with the assignees; the cows were left on the farm in charge of Mrs. Lusk, for pasture; as to the other personal estate, it appears that the change of possession was actually made. No conclusion of law adverse to the assignment could be had from these facts. It was eminently a case for the jury to find whether there was an actual change of possession or not; and the judge was correct in denying the motion to dismiss the complaint.
The judge was requested after the evidence had been closed, to charge that the assignment was fraudulent and void on account of the preference of a fictitious debt to Marcena Glezen, which the judge refused, and instructed the jury, that it was a question of fact for them to decide, whether that debt was fictitious; but if it was fictitious, that the assignment was void.
The counsel for the defendant duly excepted to this charge, and also to the refusal to charge. The charge was more favorable for the defendant than the facts warranted. The judge might have correctly instructed the jury, that the evidence showed that the note was given for a valid obligation, as has been already shown, and that Lusk might, as matter of law, give it a preference in the order of payment.
The judge was also requested to charge the jury that the conveyances made by the assignor to his children in anticipation of an assignment, made it fraudulent. He refused so to charge, and instructed the jury that if they should find that the conveyances to the children were each fraudulent, it did not necessarily follow that the assignment was fraudulent. The counsel for the defendant duly excepted. It appeared in evidence that Simon J. Lusk had conveyed a parcel of real estate to one of his sons of the value of about $600, and to another about thirteen acres of the value of $150, shortly before the assignment.
There was also evidence tending to show that he was indebted to each of these sons, to an amount equal to the value of the land conveyed to them respectively. The witnesses differed somewhat as to the value of the land. The charge on this subject was undoubtedly correct, as was also the refusal to give the instructions requsted. Neither conveyances without consideration, nor other frauds committed by a failing debtor, prior to his general assignment for the benefit of his creditors, will operate to make it void as matter of law. These are circumstances which may be taken into consideration by a court and jury, if nearly contemporaneous, but are not conclusive of a fraudulent intent.
The counsel for the appellant also excepted to the directions of the judge, that the plaintiffs were entitled to recover, if anything, the whole value of the logs and lumber levied on.
The levy was made by the defendant July 5th, and in September following he offered to relinquish the levy. Neither the lumber or the logs were ever removed, but remained on the premises, where the levy was made, at the time of the trial. The plaintiffs refused to accept the articles when the defendant offered to return them.
The defendant exercised a dominion over the lumber and logs by the levy. He disregarded the plaintiffs' title; and they could not remove the property, or exercise any acts of ownership after the levy without being guilty of a trespass or misdemeanor. The defendant could not, at his pleasure and without the plaintiffs' consent, discharge the responsibility which he had incurred. His levy was a conversion of the property. He assumed the right to dispose of it. The plaintiffs did not repossess themselves, or accept the relinquishment of the right or authority over the property previously claimed by the defendant. The plaintiffs, having acquired a right of action, cannot, without their knowledge or assent, be held to have lost it.
If the plaintiffs had resumed their ownership it would have affected the damages, but not the right of action. The case of Reynolds v. Shuler (5 Cow. R., 323), and the authorities there cited and considered, are full upon this question. The learned judge was correct in his instructions to the jury.
There were some other exceptions to the rulings of the judge; but none of them have been argued by the appellant. The judgment should be affirmed, with costs.
All concur for affirmance.
Judgment affirmed, with costs.