Court Opinion

ID: 6506197
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:18:23.229661+00
Date Added: 2024-06-11T15:54:44.483016
License: Public Domain

STONE, J.
— In Prentice v. McClanahan & Johnson, at June term, 1856, we considered and construed section 2291 of the Code. That was a case where a garnishee had answered to an indebtedness, but further answered that he had received notice that the note which evidenced his indebtedness had been transferred. An issue was made up under the statute, contesting the right to the note and its proceeds ; and on the trial, the transferrees offered the defendant in execution as a witness. We held, that he was competent; overruling Scott, Slough & Co. v. Stallworth, 12 Ala. 25, and Marston v. Carr, 16 Ala. 825. In fact, we consider that the former of those cases had been overruled by Myatt v. Lockhart, 13 Ala. 338; and the latter by Kirksey v. Dubose, 19 Ala. 44, and Zackowski v. Jones, 20 Ala. 189. Our own decisions were in irreconcilable confusion. Both the reasoning and the results attained in the cases last cited have our unqualified approbation, and we adhere to the conclusions we announced in the ease of Prentice v. McClanahan, supra. It results, that the court erred in refusing to permit Bostwiek to testify at the instance of appellant.
2. As testimony tending to show that Price, at the time he took the mortgage from Bostwiek, him that the latter was insolvent, the plaintiff in garnishment proved, *707against the objection of the defendant, that Bostwick was, at the time he executed the mortgage, notoriously insolvent. To this ruling of the court an exception was taken; and the case of Elliott & Stanley v. The State, 26 Ala. 26, is here relied on, as showing that in this particular the city court erred.
Although this question is one simply of evidence, yet it is of great practical importance. In most of our jury trials, involving the bona Jides of assignments, mortgages and conveyances, this question of notice becomes a material inquiry. It is rarely susceptible of direct or positive proof. The more complete and manifest the insolvency, the less likely will the public be to remark or comment upon it. The universality of the knowledge precludes probability that the subject will be discussed, and thus heightens the difficulty of proving the direct fact of notice.
Another argument: The credit system rests, not alone, or even mainly, on the personal 'confidence which one man reposes in another. Ability to pay — responsibility to the coercive power of an execution — is a weighty consideration with one who parts with his goods on credit. Persons engaged in commerce and traffic are usually prudent, if not cautions. It is difficult to believe that merchants and traders will not learn the pecuniary condition of their customers, when that condition so vitally affects them, and is notorious in the neighborhood in which they are operating.
"We think the vice of the argument in the case above cited, so far as it assails our former decisions on this point, consists in this, that it treats the subject as if the evidence when adduced must control the jury. Such was not the rule as formerly declared. It was only evidence to be weighed by the jury, as other cii’cumstantial evidence is weighed. Its effect was for them, and, of course, would be greater or less, as the nature of the business in which the grantee was engaged, and the degree of notoriety which the grantor’s insolvency had acquired, would strengthen or weaken the probability that the grantee also knew of its existence.
*708Without intending in this opinion to extend this principle further than to. provide for cases like the present, we re-affirm the doctrine settled in the cases of Ward v. Herndon, 5 Porter, 382; Lawson v. Orear, 7 Ala. 784; Bank v Parker, 6 Ala. 731; Cook v. Parham, 24 Ala. 21, re-affirming Bank v. Parker, supra.
Lest this opinion might mislead, we feel it our duty to state, that the evidence we have been considering was not •offered as a means of proving the fact of insolvency. Por that purpose it would have been inadmissible. — See citations supra, and Brice & Co. v. Lide, at the present term. The testimony was offered simply as one means of proving knoiriedge in the grantee, of a fact the existence of which, under the rule, must have been established by other proof.
3. The record in this case does not contain enough to inform us whether the court erred in refusing to give the charge, that the answer of the garnishee was not evidence. Under the rule which requires us to indulge every reasonable presumption in favor of the correctness of the ruling in the primary court, it is our duty to suppose the answer was in evidence. The answer of the garnishee,although a part of the record in the cause, is, we admit, not necessarily evidence before the jury, in a contest such as this. It may, however, be given in evidence by the plaintiff in garnishment, but cannot be by the garnishee. See Myatt v. Lockhart, 9 Ala. 91.
4. This clear proposition, that the answer of the garnishee is not, per se, evidence in the cause, and can only be made evidence by the plaintiff, bears directly on the second charge given by the court. That charge relates exclusively to this answer. The answer, if in evidence- at all, being made evidence by the act of the plaintiff, it was not permissible for him to discredit that evidence. Any charge, given at his instance, or by the court ex mero moiu, which tended to throw distrust over that evidence, or instructed the jury that they might, for the benefit of plaintiff, lean against that evidence, violated one of the fundamental rules of evidence.
5. We do not think the court erred, in refusing to *709receive evidence that the defendant in execution owned, lands in the State of Texas. Such lands, if owned by him, were without the jurisdiction of the court, aud could not be reached by any process known to our laws. — See Richards v. Hazzard, 1 Stewart & Porter, 156; Snedicor v. Burnett, 9 Ala. 434; Wilson v. Matthews, Finley & Co., at this term.
6. The explanatory charge given in this case is objectionable, in this, that it refers the question of the construction of one feature of the mortgage to the jury. Its language is, “If the jury believed from the evidence that * * * * the mortgage provided that Bostwick should remain in the possession of the property until Price took possession of it on the failure of the first note, if he thought fit to do so,” &c. The construction of each and every clause of the mortgage was a question for the court, and should not have been left to the jury. There is another clause of this charge subject to the same criticism.
7. Another question w'as probably mooted in the trial below. The bill of exceptions is not very clear on this point; but we infer that section 1556 of the Code was made to bear on this case. If so, that was error. The effect of that section is not to render deeds which come within its provisions void. It simply defeats all preference of creditors which may be attempted in a general assignment. It does not destroy the deed, but upholds it in all respects, save that it destroys the preference. That section can exert no influence, in a trial which attacks such deed for fraud. — See Holt & Chambers v. Bancroft, Betts & Marshall, 30 Ala. 193.
8. We will not apply these principles to the various rulings of the primary court. We feel it our duty, however, to determine the character of this mortgage, presented as that question is by the refusal of the city court to give several of the charges asked by the garnishee. The mortgage in this case, after conveying the stock of goods owned by Bostwick, conveys also “ such other goods and chattels as the said Bostwick may, from time to time hereafter, purchase and place in the said store and *710ware-houses, to keep up and renew bis stock in trade, wbieb goods, &c., so to be hereafter purchased, shall be subject to the same lien and disposition as those named in said-schedule marked A.” The mortgage fixes no law day in express terms, but rather contemplatés delay, in this, that although the notes were none of them due or bearing interest, yet it provides for the payment of the notes and all interest on them. It also gives authority to sell at public auction or private sale. Beading this mortgage, it is impossible to resist the conclusion, that the parties intended that the business should, for a time at least, continue as it had been previously conducted. It is, in its main features, strikingly like the mortgage we construed in the case of Constantine v. Twelves, 29 Ala. 607. In that case we said, “Itis a sound principle, that "when a debtor engaged in the mercantile business, in contemplation of insolvency, executes a deed as a security to a creditor, conveying his entire stock of goods, but reserves the possession of the goods and the right to continue to carry on the business as he had carried it on before, and to sell the goods in an undefined way, accounting only for the proceeds of such sales; and the creditor is aware of the contemplated insolvency, this reservation creates the presumption of fraud, which, if not rebutted by other facts and circumstances, is sufficient in law to render the deed fraudulent and void as to the other creditors of the grantor.” — See, also, Ticknor, v. Wiswall, 9 Ala. 305. This mortgage has not even the dubious merit of providing that the pi'oceeds of sales to be made by Bostwick shall be paid over to the mortgagee. Whether the mortgagor was insolvent, or in failing circumstances, when he executed this mortgage; and if so, whether Price knew that fact, were among the controverted questions in the court below. It is not for us to decide them’. If the jury find their existence, we think the result follows, that this mortgage was fraudulent as to the existing creditors of Bostwick.
The judgment of the city court is reversed, and the eause remanded.