Court Opinion

ID: 8013153
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:00:41.822794+00
Date Added: 2024-06-11T16:36:04.366832
License: Public Domain

MAESHALL, J.
I concur in reversing and remanding this case, but I place my concurrence upon the sole ground that, Under the issues joined, the circuit court erred in *214excluding evidence as to whether the deed of trust was executed by authority of the board of directors.
I do not agree that it is necessary for the beneficiary under the deed of trust to show, in the first place, that in making the preference the directors took into consideration the interests of the corporation and of the stockholders as well as those of the preferred creditors. The corporation acting through its directors, had a right to make a preference, and if it did so, and it was attacked as fraudulent, the burden of proof rested upon the person charging fraud, to make out a prima fome case, before the beneficiary could be called on to disprove it. [Gutzweiler’s Adm’r v. Lackmann, 39 Mo. 91; Albert v. Besel, 88 Mo. l. c. 153; Hazell v. Bank, 95 Mo. l. c. 65; State ex rel. v. Hope, 102 Mo. l. c. 428; Van Raalte v. Harrington, 101 Mo. l. c. 611; Mansur-Tebbetts Imp. Co. v. Ritchie, 143 Mo. l. c. 610.]
The question of the T)ona fides of the transaction is always an issue in a ease where a conveyance is charged to be fraudulent, but the rule of law is the same in such cases as it is in all cases under our jurisprudence, that the burden of proof is upon him who charges the conveyance to be fraudulent. This is true whether the beneficiary be a third person or a director or stockholder of the corporation. I do not agree that such a preference isprima facie fraudulent. Such was said to be the law in the last paragraph of the opinion in Schufeldt v. Smith, 131 Mo. 280, but in my opinion it was an oversight on the part of the learned judge who wrote that opinion, for it is in direct conflict with the reasoning and authorities employed and cited throughout the whole opinion, and particularly, when, after pointing out that an individual may prefer any creditor he sees fit, even though it be his .■wife, he said: “No reason can be seen why a corporation may not also prefer its friends. There is no more equity in. allowing an individual debtor to prefer his creditors, wife or children, than in allowing a corporation to prefer its *215stockholders and officers. To permit equities to control would defeat all preferences. While the owner of property retains the power of its disposal, he may apply it to the payment of any honest debt, is the rule upon which the right to make preferences among creditors rests. The rule should apply as well to corporations as to individuals, and any change should be made bythe legislature and not by the courts. If the debt is an honest one, and the corporation had the power to contract it, it has the light to pay or secure it, and no fraud can be imputed to it from the fact that it is paid or secured in preference to another.”
The power being conceded there is no more reason, under the genius of our law, for easting the burden of proving the honesty of the debt, or any of the elements of good faith, upon a director or stockholder than there is for casting it upon any other creditor. The person charging fraud has always been required to prove it; and solely because the circuit court placed the burden of proof upon the beneficiary instead of upon the attacking creditor, this court reversed the judgment in Mansur-Tebbetts Imp. v. Ritchie, 143 Mo. l. c. 610.
Likewise I can not follow the reasoning which requires the beneficiary to prove, in the first instance, that the directors considered the welfare and interests of the corporation and of the other stockholders, as well as those of the secured creditor, and at the same time does not grant to the attacking party the right to rebut such proof, and which does not allow the jury to pass upon the question. If there is any such underlying question in a proceeding charging fraud,'then it is an issue of fact, and if so, the attacking party must be accorded the privilege • of rebutting the proof offered by the beneficiary, and the jury must decide whether the directors did act for the welfare and best interests of the corporation and its stockholders, as well as for those of the preferred creditor. And if the jury finds that they did not, then, to *216my mind, it logically follows that tbe preference was not made in good faitb and bence is fraudulent. If tbis be true, it is then tbe jury that determines wbat preferences shall be made, and not tbe debtor wbo so decides, yea, tbe jury might decide that tbe best interests and welfare of tbe corporation and its other stockholders demanded that there should be no preferences, and if tbis be so, wbat becomes of tbe doctrine of allowing preferences'{ It would be merely an ignis fai/wis-
It is as true in tbe civil as in tbe criminal law that a presumption of innocence of fraud surrounds the accused, and tbe burden of proof always rests upon tbe party charging the fraud to prove it, and tbe accused is only compelled to repel tbe attack. As is pointed out by G-reenleaf, this is not only tbe rule of tbe English law, but always was tbe rule even under tbe Noman law [1 Greenleaf on Ev. (14 Ed.), sec. '74], and tbis is tbe rule upon which this court has always heretofore proceeded, as is shown by tbe cases cited. i