Court Opinion

ID: 6513544
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:24:32.09489+00
Date Added: 2024-06-11T15:54:57.244220
License: Public Domain

CLOPTON, J.
Appellant purchased the goods, the subject of suit, at a sale by the marshal under an execution in favor of Slade & Ethridge against H. A. Manning, which was issued on a judgment rendered December 4, 1884, by the United States Circuit Court. Appellee, who brings the action for a conversion of the goods, deduces title by a purchase from Manning on December 1, 1884.
The evidence establishes that Manning had been for sometime prior, and was at the time of the purchase, largely indebted to plaintiff, and that the latter purchased the goods in payment, pro lanto, of the indebtedness. The bona fides of the debt is not seriously controverted; the notes which evidenced it were produced in evidence, and their considerations proved; and there is no pretense that plaintiff paid Manning other or additional consideration. The case, therefore, comes within that class of cases, in which a creditor purchases, or takes property from an embarrassed or insolvent debtor, in payment of his debt. . The defendant requested the court to charge the jury, that if Manning yielded a preference to plaintiff, in his diligence to collect his debt, which was participated in by him, for the purpose of defeating the rights of the plaintiffs in execution, the jury must find for the defendant.
Since the decision in Hodges v. Coleman, 76 Ala. 103, which has been uniformly followed, it should be regarded as settled law in this State, that a sale of the whole, or a part of his property, by an embarrassed or insolvent debtor to his creditor, in payment of an antecedent debt, will be upheld, if the debt be bona fide, its amount not materially less than the fair and reasonable value of the property, and payment of the debt is the solé consideration, and no use or benefit is-secured or reserved to the debtor. In such case, the inquiry should be directed to the bona fides of the debt, the sufficiency of the consideration, and the reservation of a benefit to the debtor. If the transaction is not assailable on some one of these grounds, fraud otherwise has no room for operation. Whether there exist the ordinary badges of fraud, whether the debtor intended to hinder or defraud his other creditors, whether the purchasing creditor was swift *361in the race of diligence for the purpose of defeating other creditors who were pressing their demands, or whether such is the necessary consequence, are not material inquiries. By devoting his property to the payment of an honest debt, the debtor merely performs a lawful act, which causes no legal injury to any one; and without injury there can be no actionable-fraud.—Meyer v. Sulzbacher, 76 Ala. 120; Levy v. Williams, 79 Ala. 121; Carter v. Coleman, 84 Ala. 256; Morrison v. Morris, 85 Ala. 196. The rule settled by these cases is a qualification of the general rule as to fraudulent conveyances.
On the question of fraud, the defendant asked several other charges, which were refused. Whether properly refused does not depend solely upon the correctness of the abstract legal propositions of the charges, but also upon their applicability to the case as presented by the evidence. Though correct, if inapplicable, they were properly refused. All these charges ignore the qualification to the general rule above stated, and their tendency would have been to divert the minds of the jury from the proper inquiries. Jeff. Co. Sav. Bank v. Eborn, 84 Ala. 529.
The defendant further requested the court to charge the jury, that if the plaintiff used such words, to and in the presence of defendant, as would cause a reasonably prudent man to act, and alter his condition, to his prejudice, on the faith of such statements, and the defendant did alter his condition to his prejudice on the faith of such words, the plaintiff was guilty of a fraud, and the jury must find for the defendant. The principle intended to be invoked by the instruction is, that when a party by his declaration induces another to buy property, which otherwise he would not have bought, he will net be permitted to set up against such purchaser a title in himself. The essential elements of an estoppel eiipais, in such case, are, a statement inconsistent with the title proposed to be s'et up, an act done by the other party on the faith of such statement, and injury as the result of allowing the statement to be shown to be untrue. Ordinarily, the declarations must be made with the intention-to induce action; but intention to willfully mislead is not essential. It is sufficient if a statement is made in such manner that a sensible man would receive it as true, and believe that it was intended that he should act on it. This qualification, however, applies to the manner in which the statement is made, there being no positive intention that it should be *362believed and acted upon. It has ho reference to the character of the statement itself. A declaration may be made in such manner as would induce a sensible man to believe it to be true, and intended to be acted on, and yet insufficient of itself to constitute an estoppel. Whether a statement is of such character as would cause a reasonable man to act, is not the test of the sufficiency. The character and sufficiency of the statement are for the determination of the court.
There being evidence that the goods were purchased by the agent of plaintiff during his absence, the defendant further asked the court to charge the jury, that authority to sell goods and collect debts does not authorize an agent to purchase a stock of goods in payment of such debts. The evidence tended to show that the son of plaintiff was his general agent, and was specially directed to look after the Manning claim, and collect something on it, or to arrange it in some way — had authority to settle the claim. The charge is obnoxious to the objection, that it would have authorized the jury to infer that the authority was limited to selling goods and collecting debts in the usual and customary mode, an inference which could not be reasonably drawn from the evidence. Such being the authority of the agent, no question arises as to the effect of a subsequent ratification upon the intervening rights of the plaintiffs in execution.
Affirmed.