Court Opinion

ID: 8653698
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:13:43.494715+00
Date Added: 2024-06-11T16:56:36.747908
License: Public Domain

Babtch, J.:
In this case the plaintiff was in the possession of certain goods as assignee, and, while so in possession, the defendant, being United States marshal, seized the goods under *226a writ of attachment, and sold them. The plaintiff brought this action to recover possession, or, if delivery could not be obtained, then for the value of the goods. The jury returned a verdict in his favor for the sum of $880 and costs, and, a motion for a new trial having been overruled, the defendant appealed to this court.
Counsel for defendant contends that the assignment made by the firm of Webb & Olsen for the benefit of their creditors, and under which the plaintiff claims possession, was fraudulent and void. There are some charges of fraud as to Webb & Olsen set up in the answer, but there is no allegation connecting either the assignee or the creditors with it. Nor does the evidence show that the assignee or creditors participated in any fraud, or were connected therewith. In fact, it appears to be admitted that the assignee knew nothing of the assignment before it was made, nor until the papers were handed to him executed, and he was asked to serve as assignee. The defendant offered to introduce in evidence a bill of sale and chattel mortgages, made to creditors prior to the assignment; but, there being nothing to show that the assignee had anything to do with the transactions prior to the assignment, and no allegations of fraud as to the creditors appearing in the answer, the court refused to admit them. Counsel complains of this ruling by the court. Fraud will not be presumed. It must be alleged, and the party alleging it must prove it by competent evidence. Even if these instruments were fraudulent, they would not invalidate the assignment, unless it were shown that the assignee or beneficiaries participated in the fraud. The defendant made no offer to show that such was the case, and therefore the ruling of the court was proper. Other evidence offered for similar purposes was likewise properly excluded.
Counsel lays much stress upon the fact that one of the *227preferred creditors is a brother of one of the assignors. "While courts will always scrutinize such' transactions, yet it is not an element of fraud per se. Such a preference, when the assignor acts in good faith, may be given in the exercise of a lawful right, and will not affect the conveyance. It is a right which results from the absolute ownership of property. The supreme court of Mississippi, in Eldridge v. Phillipson, 58 Miss. 270, said: “Preferences to creditors are valid if they be bona fide, and reserve no benefit to the debtor. The right to make a preference results from the dominion which the owner has over his property. It is a part of his proprietorship. The law has not said he shall divide his estate ratably among his creditors. It has left to him the discretion to act as he wills, provided only he acts with the honest intent to pay a valid debt, and does not, under cover of such a disposition, stipulate for a benefit to himself.” In Tompkins v. Wheeler, 16 Pet. 106, Mr. Justice Thompson, delivering the opinion of the court, said: “ That a debtor has a legal right to prefer one or more of his creditors over others, when the transaction is bona fide, is not an open question in this court.” Brooks v. Marbury, 11 Wheat. 78; Reed v. McIntyre, 98 U. S. 507. Nor does fraud on the part of the assignors vitiate the assignment, or affect the rights of the assignee and of the beneficiaries of the trust who had no knowledge of the fraud, and were in no way connected with it. To have such an effect, there must be a fraudulent contrivance on the part of the assignee or of the persons to be benefited by the assignment.
Mr. Chief Justice Fuller, in Peters v. Bain, 133 U. S. 690, 10 Sup. Ct. Rep. 354, says: “The inquiry is not whether the grantors had been previously guilty of fraud or embezzlement, but whether this particular conveyance was made with a fraudulent intent known to the trustee or beneficiaries.” So, in' this case, the question is not *228whether the assignors were guilty of fraud anterior to the assignment, but whether such fraud, if any was committed, was participated in by, or was within the knowledge of, the assignee or beneficiaries. Emerson v. Senter, 118 U. S. 3, 6 Sup. Ct. Rep. 981; Mayer v. Hellman, 91 U. S. 496; Estes v. Gunter, 122 U. S. 450, 7 Sup. Ct. Rep. 1275. Nothing appears upon the face of the instrument in question to indicate that it was made for any other purpose than to make a Iona fide provision for the payment of the debts of the assignors, providing first for the preferred creditors, and then for other creditors. Nor does the record disclose any specific acts, made out by the proofs, establishing any actual fraud in which the assignors and assignee or creditors were participants. TJnder these circumstances, the assignee was lawfully in possession of the goods, and the writ of attachment conferred no right of seizure and sale upon the United States marshal. He is therefore responsible for his unlawful act. The judgment of the court below is affirmed.
MINER, J., and Sjiith, J., concurred.