Court Opinion

ID: 7891525
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:49:28.52156+00
Date Added: 2024-06-11T16:31:56.021202
License: Public Domain

Cochran, J.,
delivered the opinion of this court.
This suit was instituted by Frederick E. Ratcliffe, to recover certain articles of merchandise sold and delivered by him to the firm of Yerby, Tebbs & Yerby, upon representations alleged to have been false and fraudulent, made by George W. Yerby, one of its members, and which were assigned by that firm, in trust for the benefit of its creditors, to the appellees.
Two exceptions are presented in the record, the first of which was taken to the competency of George W. Yerby, who was examined as a witness by the appellees. The disqualifying interests, presumed from a possible residue of the trust estate after the payment of creditors, and resulting from the warranty implied by the deed of assignment, we think, were legally divested and extinguished by the mutual releases executed by him and the appellees.
The interest he was supposed to have adverse to the appellant, was balanced by his primary liability for the goods in controversy, and, for that reason, could not affect his competency. His interest in having the property assigned, applied to the payment of creditors according to the preferences expressed in the deed, as well as that to be presumed, in others respects, from his relations to the parties in the case, might have affected his credibility, but not his competency. At the time he was offered as a witness, he does not appear to have had any inter*389esí sufficient to have rendered him incompetent, and, in our opinion, his evidence was properly admitted.
The other exception, taken to the rejection of the appellant’s prayers, and to the instruction given by the court, embraces several propositions, a separate consideration of which becomes necessary.
The instruction asked in the first prayer, that the deed to the appellees did not authorise any number less than all of them to take possession of the property conveyed, and execute the trusts declared, we think was properly refused. The deed expressly provides, that the appellees, “their executors, administrators and assigns, the survivors or survivor of them, his or their executors, administrators and assigns, or a majority of them,” should forthwith take possession of the property described, <fcc., and, by a reasonable construction, implies, if it does not expressly declare, the power and authority of a majority of the appellees to execute its provisions. Where a conveyance of property is made to several persons as trustees and a part of them disclaim the trust, the others “will take not only the entire legal estate, but also all the power and authority requisite for the administration of the trust,” unless the intention, that all the persons named as trustees shall act, be expressed or clearly implied from the conveyance. If, in such a case, the grantor use expressions showing that the execution of the trust, by any number less than all of the grantees named, was contemplated, the disclaimer of the trust by any one of them will not invalidate the deed, nor impair the power or authority of the others to execute the trusts declared. Bill on Trustees, 226, and authorities there cited.
The determination of the question, whether the appellee, Sangston, divested himself of the trust by the instrument executed for that purpose, is immaterial, as, in either case, the terms used in the deed, or the evidence of Hurst, showing that Sangston acted under it until this suit was instituted, fully justified the refusal of the instruction prayed.
The instructions sought by the second and fifth prayers, we *390think, were also properly refused, but as the propositions they present were not urged by the appellant, in the argument of the case, ,we forbear the expression of a more extended opinion upon them.
The proposition of the fourth prayer is substantially embraced in that presented by the third, and for that reason they will be considered together. The principle contended for in these prayers is, that goods assigned to a creditor, in trust for the benefit of creditors, by a vendee who -purchased them upon fraudulent representations, may be reclaimed and recovered .by the defrauded vendor, although the trustee may have received them from the vendee, under the deed, without .notice of .the fraud; or, in other words, that the-voidable title of the vendee is not perfected in the .hands of a trustee, by a deed of assignment for the benefit of creditors.
In the argument it was admitted, that although a vendor, ,in such a case, might avoid a sale induced by false representations, and reclaim the goods sold, from the fraudulent vendee, the right would be defeated by an assignment or transfer of them for a valuable consideration, without notice of .the fraud. There is no pretence of such a notice in this case, and the sufficiency of consideration for the deed, under which (he appellees resist the claim of title asserted by the appellant, is therefore the onl) remaining point to be determined. We think the rule for ascertaining the sufficiency .of consideration, in such a case, is well settled. Where the consideration for.an assignment or transfer from a fraudulent vendee is such, that, after a reclamation and recovery by the vendor, the assignee or transferee would remain in the same condition as before the assignment or transfer, it is not sufficient. To make such an assignment or transfer valid against the defrauded vendor, something of value, in the way of property or money, should be given or advanced, some service rendered or liability incurred, on the faith and credit of the transfer, and as a present reciprocal consideration therefor. It follows, that a transfer of goods, by .a fraudulent vendee, in consideration of a pre-exist*391ing debt, confers no title as against the defrauded vendor, who may avoid the sale to the vendee, and recover the goods from the assignee or transferee. 13 Wend., 570. 4 Duer., 101. 6 Duer., 240. Powell vs. Bradley, 9 G. & J., 220. We see no reason why an assignment of goods by a fraudulent vendee, for the benefit of his creditors, in consideration of his pre-existing indebtedness to them, should stand on a stronger ground or be governed by a different rule. An assignee, for the benefit of creditors, is not a purchaser for a valuable consideration. 17 N. Y. Rep., 28. For these reasons, the appellant, if he had the right to avoid the sale and recover the goods in controversy from Yerby, Tebbs & Yerby, before they were assigned, for fraud practiced in their purchase, would be entitled to recover them from the appellees afterwards, as the consideration for the assignment was not such as to constitute them bona fide purchasers for a valuable consideration, nor to perfect in them the voidable title of their assignors. In this view of the case, the objection to the instruction given by the court is so apparent that a more particular notice of it is rendered unnecessary.
(Decided June 11th, 1862.).
We think there was error in refusing the instruction asked in the third and fourth prayers, and also in that given by the court, and shall therefore reverse the judgment.

Judgment reversed and procedendo awarded.