Court Opinion

ID: 6241741
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:46:25.997862+00
Date Added: 2024-06-11T08:58:12.963642
License: Public Domain

Opinion by
Mb. Justice Gbeen,
In this case the findings of fact made by the auditor have been affirmed by the court below,, and they are therefore to be treated *206with the same effect as if they had been determined by the verdict of a jury. As to the consideration of the judgment given by Jones & Reese to W. B. Reese, there can be no question. It was given for the agreed value of the entire stock of goods and accounts owned by W. B. Reese, and duly sold and transferred by a formal bill of sale to the purchasers, who took possession, sold the goods, collected such of the accounts as they could, and applied, as much of the proceeds as was necessary, to the payment of the debts of W. B. Reese, until all his debts were paid. The transfer of the judgment by W. B. Reese to his wife, made several months later, was a valid transfer because he was then out of debt, and might lawfully make the transfer to his wife. The consideration of natural love and affection would sustain it, although no money was paid for it. This being so she took a good title to it by the transfer and could lawfully hold it against him or any one else. Of course, if the transfer had been made for the purpose of cheating and defrauding the creditors of W. B. Reese, it would have been fraudulent and void as against them, but he had no creditors, and the auditor has specifically found that it'was not made for any fraudulent purpose, and we think the testimony fully justified the finding.
No trouble seems to have arisen about the matter until after the fire which destroyed the stock of goods of Jones & Reese, some six months later, in February, 1890. After that a new stock of goods was purchased by Jones & Reese, part of which was sold to the firm by the appellants in this case. These are the goods upon which execution was levied on the judgment transferred by W. B. Reese to his wife in August, 1889. It was during the time, after the fire, and before the issuing of this execution, that the various declarations and representations of W. B. Reese, Daniel Jones and Benjamin Reese were made, upon the faith of which, it is alleged by the appellants, their goods were sold. It certainly must be conceded that if this controversy were between the appellants and any or all of these parties, it would probable have to be adjudged.that these purchases were fraudulently made. While assuming to give a truthful statement of the debts and liabilities of Jones & Reese, the judgment debt held by Mrs. Mary Reese was suppressed and withheld. The agreement to. apply the insurance money *207to the payment of goods purchased was violated by paying it to Mrs. Reese, and in that regard the conduct of Jones & Reese and W. B. Reese cannot be justified in any point of view. If W. B. Reese was the legal owner of the judgment, and was endeavoring to enforce his execution lien on the fund in court, which is the proceeds of the stock of goods sold to Jones & Reese, we do not think, in view of his own admissions on the witness stand, that he could be permitted to claim any part of the fund. He certainly ought to be, and we think would be', estopped from making any claim under this judgment, after having participated, as he admitted he did, in the declarations and representations which induced the appellants and other merchants to sell to Jones & Reese the goods out of which the fund in court arises. Such conduct is not only highly reprehensible but should deprive the guilty parties of all right to take any part of the goods or their proceeds as against the parties who sold them.
But the difficulty we have, and which confronted the auditor and the court below, is, how is all this to affect the rights of Mrs. Reese. She has been emphatically exonerated by the auditor, of all participation in the transactions of W. B, Reese and Jones and Benjamin Reese, in making the new purchases of goods, and, in several findings, the auditor declared that there was no evidence to show that she had colluded, or concerted, with Jones & Reese, in any fraudulent agreement or design to hinder, delay or defraud their creditors. A careful reading of the testimony satisfies us that this finding is warranted by the evidence. We have not been referred to any testimony disproving these findings and have failed to discover anju The declarations of W. B. Reese and Daniel Jones that were offered in evidence, were made long after the title of Mrs. Reese had accrued and were not binding upon her and therefore could not affect her title. While it is-true she paid nothing for the judgment, she could take a perfect title by gift, if her husband was free of debt and there was no fraudulent purpose in making the assignment. At the time the assignment was made, there is not the slightest reason to suppose that there was any purpose in the mind of any of the parties to defraud the creditors of any of them. W. B. Reese had creditors when the judgment was taken, but they were all paid off out of the *208proceeds of the sale. The circumstances which gave rise to the subsequent purchases of goods did not then exist, and did not arise, until after the fire which did not occur until six months and upwards had elapsed. Whatever purpose there was to buy goods upon improper and untruthful representations, originated after the fire, which of course was an unanticipated event. None of the testimony as to what then occurred reaches to Mrs. Reese, no declarations, representations, acts or conduct of hers aré given or offered in evidence. If her title by transfer from her husband was free from all taint of fraud, as is found by the auditor, properly as we think, it was good for all purposes, and was entitled to as effective a defence as if she had paid money for it.
We think the auditor and court below were right in holding that the attachment proceedings were not conclusive upon her rights as holder of the judgment. Her title was not in issue and she had no hearing upon it under that process. Under the act of 1869 it is the alleged fraudulent act of the debtors that gives rise to the proceeding, and is the subject of controversy. While it may well be in this case that Jones & Reese did contract their debts for the goods in question fraudulently, it does not follow from that proposition that Mrs. Reese’s title to the judgment was fraudulently obtained, and therefore an adjudication of the former fact is no adjudication of the latter. Upon a patient and careful examination of the case we think it was correctly disposed of by the auditor and court below.
The decree of the court below is affirmed at the cost of the appellants.