The herald., 1897-05-19
SOME HARD WORDS
Dealt Out by Judge York in a Fraud
Case. a

A decision was yesterday rendered by
Judge York in the suit of Haywood
Bros. & Co: ct al. against ]. o. Turner
ct al. This was the case wherein the
creditors of w. T. Reed sought to set
aside a sale of certain furniture by Reed
to Turner. as being in fraud of the cred
itors of Turner
/ II find." says the court; sthat at,the
time of the sale to Turner Reed was SOL
vent, and had no Intention to defraud
his creditors, and price Turner
agreed to pay was the full value of the
goods. At the time OF the contract OF
sale Turner paid to Reed $1,000. in part
payment, leaving the remainder of the
purchase price unpaid until an account
of stock-co be taken. AS soon az
the amount due Reed was ascertained
Turner paid the balance of the con-
tract price, and Reed left Turner in the
exclusive possession of thesyoods. Sub
sequently to the contract of sale Reed
conceived scheme to defraud his cred
itors by means of the sale and CONVEX
sion of his estate into money. Turner
was not a party to said scheme; but,
after Reed had conceived it, Turner
learned facts sufficient to inform him
of Reeds intentions. Thereafter he paid
the remainder of the purchase price to
Reed.
THE only question of law, therefore,
pertinent to the case is whether Turner
having learned. after he had bargaine,s
for the goods and paid half the purchase
price, that Reed had conceived scheme
to use the transfer of the goods to
Turner as means to defraud his credit
ors. Turner could complete his con-
tract and pay the remainder of the
purchase price to Reed without there
by becoming party to Reeds fraudu-
lent scheme.
Plaintiffs counsel contend that, un-
der such circumstances, Turner became
liable for the amount of $3.50 remaining
unpaid, If not for the entire stock. They
cite, in support of their contention, Bod
son VS.. Cooper decided by the supreme
court of Kansas, and reported in Is Pa
cific R., p. 200. But in that case Cooper,
at the time of discovering the debtors
fraudulent intentions, was in position
where he need not have carried out the
terms of his contract. In this case Turn
er had paid Reed $4,000, and there was an
uncertainty of his recovering what he
had paid if he had rescinded his con-
tract. On the one side was Reed with
contract requiring him to pay the re-
mainder of the purchase price, and on
the other a probability of a suit by
Reeds creditors to set the sale aside.
Turner's duty to himself was certainly
equal to his duty to Reeds creditors.
The original contract was not fraudu-
lent because of the facts above stated
and because of the further fact that
Reed was not diminishing his estate by
the transaction. With thesmoney paid
by Turner he could have paid all his
debts. He preferred to squander it.
1.-The creditors, therefore, had no
grievance against Turner, unless Turner
participated to assist Reed in defraud-
ing his creditors. The evidence is not
sufficient to establish such fact
Turner, therefore, had the right to
complete the contract, although he had
knowledge of facts sufficient to inform
him that Turner did not intend to pay
his creditors. 80
"As to the evidence of promises of
Turner, they were not unequivocal, ard
the creditors had no reason to delay pro-
ceedings against Reed by reason of
them. If they have lost their claims, the
loss has been occasioned through the
perf1dy of Reed, most willing witness
for plaintiffs, who confessed his faults.
when the confession. would not harm
himself, and who showed an unscrupu-
ous disregard as to the accuracy of such
confession. Turner has not aided in such
loss only so far as his acts enabled Reed
to turn his stock into money. 1t is
therefore, ordered that defendant Turn
er have judgment; that the plaintiffs
take nothing; and for his costs"