Court Opinion

ID: 6511890
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:23:08.002009+00
Date Added: 2024-06-11T15:54:54.119972
License: Public Domain

SOMEBYILLE, J.
There was clearly no error in the refusal of the court to allow the plaintiffs to read to the jury the full itemized list of articles sold, from the stock of merchandise in controversy on the day after they took possession under *416their purchase from Terrell & Yincent. The question at issue was fraud vel non in the matter of the alleged sale. They had been allowed to prove the fact of possession, and the fact of sales being made by their clerk in due course of trade. These acts of dominion were relevant as- tending to prove bond, fide ownership. The particular items of sale were immaterial, and tended to prove nothing.
The objection interposed by the plaintiffs to the introduction of the attachment proceedings, and judgment rendered upon them in favor of ITardie against Terrell & Yincent, was entirely without merit. So the order of the court, authorizing the sale of the stock of goods by the sheriff, was clearly admissible. These judicial proceedings were in no sense res inter alios acta. They constituted the process under which the alleged trespass by the sheriff was sought to be justified. There was evidence tending to show the sale and purchase of the goods to be fraudulent, and if the jury was satisfied of the truth of this fact, the levy and sale made by the sheriff were fully authorized by law. The judgment was admissible to show that the inchoate lien created by the levy of the writ of attachment was perfected in the manner prescribed by law. It was not introduced to prove the existence of the debt on which it was based. This had been proved by other competent evidence. If the plaintiff desired to limit the effect of the judgment, it should have been done by requesting a proper charge to this end by the court.
It is a familiar principle that where the issue of fraud is involved, a greater latitude is allowed in the range of the evidence. To authorize a conveyance or sale made by a debtor to be pronounced fraudulent, two things must concur. The transaction must be shown to be infected with a fraudulent intent on the part of the grantor, and this must be participated in by the grantee. The first may be shown by the conduct and declarations of the grantor, so immediately connected with the transaction, as to throw light upon or illustrate its nature ; this e.vidence often consisting of a series of acts of more or less significance in their character, antecedent to, contemporaneous with, and even sometimes immediately subsequent to the principal fact. Unless, however, such acts or declarations are so intimately related to the principal fact, which is assailed as fraudulent, as to constitute a part of the res gestee of such transaction, they are inadmissible as evidence against one claiming as a purchaser for value, unless shown to have been brought home to his knowledge prior to the purchase.—Lehman v. Kelly, 68 Ala. 192; Moses v. Dunham, 71 Ala. 173; 2 Brick. Dig. 18, § 71 ; Foster v. Hall, 22 Amer. Dec. 400.
The participation of the grantee in the fraud may be shown *417by proving knowledge of any one or more of the facts sufficient to charge him with notice of the grantor’s fraudulent intent. But it is obvious that this principle does not render it necessary to prove the grantee’s knowledge of every particular act or declaration of the grantor going to constitute the alleged fraud. Such a requirement would render futile and impracticable all attacks upon fraudulent transfers, in perhaps ninéty-nine out of every one hundred cases, in which it might be attempted to assail their validity. It would put a facile means within the reach of parties to destroy the force and admissibility of eyidence by the artifice of management. Hence, the law does not require more than a knowledge of facts, which, however general in their nature, are sufficient to put the grantee on inquiry, by reasonably exciting a just suspicion in his mind as to the honesty or bonafides of the alleged fraudulent transaction.—Lehman v. Kelly, 68 Ala. 192, and cases cited. It is manifest that there may be cases where the fraudulent transfer of property made by the grantor to third persons, at or about the time of the main transaction, would be held admissible, even in the absence of a knowledge of such transaction on the part of the grantee, this being the settled doctrine of many of the courts. — Bump, on Fraud. Conv. (3d Ed.) 583-584. 591. But we are of opinion that the court erred, in the light of the above rules, in admitting evidence of the transfer by one of the grantors, several days after the sale made to the plaintiffs, of the notes taken for the purchase-money of the goods, which transfer he is shown to have made to his father and his sister, without the knowledge of the plaintiffs, and subsequent to their purchase of these goods. Guidry v. Grivot, 14 Amer. Dec. p. 195, note.
A badge of fraud has been defined to be a fact which is calculated to throw suspicion upon a transaction, and calling for an explanation.—Peebles v. Horton, 64 N. C. 374. In Terrell v. Green, 11 Ala. 213, it was said to be an “inference drawn by experience from the customary conduct of mankind.” These badges of fraud do not in themselves, or j¡>er se, constitute fraud, but are rather signs or indicia from which its existence may be properly inferred as matter of evidence. They are more or less strong or weak according to their nature and number concurring in the same case. They are as infinite in number and form as are the resources and versatility of human artifice. The present case presents numerous illustrations of many such badges, which are enumerated in the various rulings of the court, with explanations as to their legal force and effect, which seem correct except in one particular. The court erred in charging the jury as to the rule governing the burden of proof in such cases. The weight which is to be *418given badges of fraud is a matter usually for the determination of the jury. “In some cases,” as observed by a learned author, “ fraudi is self-evident; and when so, it is the proper province of the court to adjudge upon it.” — Bigelow on Fr. p. 468. But it can not be asserted, as a general rule, that every thing which casts suspicion upon the good faith of a transaction, shifts the burden of proof upon the grantee or interested party, so as to require him to explain it, and that, in the absence of explanation, such transaction is necessarily to be pronounced fraudulent. There are numerous badges or indicia of fraud which might, although without explanation, entirely fail to satisfy the minds of a jury, that the transaction to which they relate had its origin in a fraudulent intent. There may be a suspicion, in other words, falling far short of satisfactory proof.
In this view of the law'the first charge given by the court of its own motion was erroneous.
A debtor is not forbidden by law to make an honest preference of creditors in the payment of his debts, provided he does so without any intent to hinder or delay his creditors. Crawford v. Kirksey, 55 Ala. 282 ; Warren v. Jones, 68 Ala. 449. Such a transaction must be deemed valid if free from fraud. The fourth charge requested by the plaintiffs asserted this proposition in substance, and should have been given.
It was not sufficient to vitiate the sale that its natural result was to hinder, delay or defraud creditors, provided it was entirely free from all imputation of fraudulent intent. It is not impossible that the transaction may have had this effect, and yet have fully comported with honesty.—Young v. Dumas, 39 Ala. 60. The second charge given by the court seems to be inconsistent with this principle, and was misleading, if not erroneous.
The transfer of property by a failing or insolvent debtor, even though consummated with a fraudulent intent, is not for this reason void as between the immediate parties. The law pronounces such transactions invalid only at the instance of complaining creditors, whose legal rights have been prejudiced. The second charge requested by the plaintiffs was misleading on the ground that it assumed, in effect, that the same test would govern the validity of such transfers, -whether the question arose between the immediate parties, or between the grantee and the creditors of the grantor.
The third charge requested by the plaintiff was properly refused. The principle of law announced in it is abstractly correct under the authority of the decision made in this cause when last before us on appeal.—Shealy & Finn v. Edwards, 73 Ala. 175. But in this case, as now presented, the main issue is one of fraud, and the charge, as framed, utterly ignores *419this consideration, upon which the entire case is made to turn.
The sixth charge, given at the request of the defendants, asserts the proposition that certain concurring badges of fraud, which are specially enumerated, would, taken together, raise a “ violent presumption ” of a secret trust, demanding a closer scrutiny of the transaction. We understand by a violentpre-sumption one which is very strong and forcible, although not one which is necessarily conclusive or irrebutable — an inference which the law unhesitatingly requires to be drawn from given facts — a conclusion quite self-evident from the premises. Taking the phrase in this sense, we are inclined to think that it invaded the province of the jury, and was therefore erroneous.
The other rulings of the court are, in our opinion, free from error.
The judgment is reversed, and the cause remanded.