Court Opinion

ID: 6543832
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:17:58.371961+00
Date Added: 2024-06-11T15:55:54.645768
License: Public Domain

Hughes, J., (after stating the facts.) The third instruction is contrary to an express provision of Sandels & Hill’s Digest, which, in section 3472, provides: “Every conveyance or assignment, in writing or otherwise, of any estate or interest in lands, or in goods and chattels, or things in action, or any rents issuing therefrom, and every charge upon lands, goods or things in action, or upon the rents and profits thereof, and every bond, suit, judgment, decree or execution, made or contrived with the intent to hinder, delay or defraud creditors or other persons of their lawful actions, damages, forfeitures, debts or demands, as against creditors and purchasers, prior and subsequent, shall be void.” May v. State National Bank, 59 Ark. 614. This statute is plain and unambiguous, and there is no room for comment. Instruction nine is ’erroneous in that it told the jury that if they found “from the evidence that Ruffner took possession of the goods conveyed in the mortgage, and sold the same, and permitted said Underwood to take the money arising from the sale of same from time to time, and appropriate the same for other purposes than that of the payment of the debt secured by the mortgage, this would be a circumstance which they should look to in determining the intent in the execution of said mortgage; and if they believe, from all the evidence in the case, that the intént of the defendant at the time of the executing said mortgage was to delay any creditor in the collection of his debt, they will be authorized to find for the plaintiff.” The latter part of the tenth instruction is obnoxious to the same objection as the latter part of the ninth, and is erroneous. While the facts referred to, if proved, might not in all cases amount to fraud, yet we think that, under the facts in this case, if the appellee diverted and misappropriated money collected by him under either mortgage that should have been applied to the payment of debts secured by these mortgages, this was fraud as to creditors. It matters not whether the intent of the appellee at the time of the execution of the mortgage was to hinder his creditor in the collection of their debts, if he so demeaned himself by the misappropriation of the proceeds of the sales under the provisions of the mortgage as to hinder and delay his creditors, he was guilty of fraud. The latter part of the ninth instruction is obnoxious to the objection that it would seem to exempt the defendant from liability to the charge of fraudulently conveying his property for the purpose of hindering or delaying his creditors, provided only he did not have such intention at the time of the execution of the mortgage, though he might afterwards have used the mortgage as a cover for the fraudulent disposition and misappropriation of his property. For the errors in giving the third instruction and ninth instruction, the judgment is reversed, and the cause is remanded for a new trial.