Court Opinion

ID: 6952280
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:33:27.563055+00
Date Added: 2024-06-11T16:08:07.353066
License: Public Domain

Hr. Chief Justice Walker delivered the opinion of the Court: Is the possession of property, for three or four years under a loan, a fraud on creditors, such as will render it liable to execution against the borrower % Or may the ownership and the bona, fides of the transaction be shown to defeat a levy and sale ? In this case no attempt, beyond the transaction itself, is made to prove it fraudulent. It appears that defendant in execution, having failed as a merchant, in Ohio, and having surrendered liis property to his creditors, came to this State and went on a farm owned by his wife, given to her by her father; that his brother purchased and placed in his hands about five hundred dollars’ worth of property, consisting of stock and utensils suitable for conducting a farm; that, between three and four years afterward, one of the creditors sued ¥m. S. Peters, on a debt contracted by him while engaged in merchandising in Ohio, recovered judgment, issued execution and had it levied on this property. It appears, that defendant in execution, during the time he had it in possession, used it and sold portions of it, as owners of such property usually do. But the neighbors seem to have known that it was claimed to belong to appellant. The interests of commerce, trade, and the varied business of all civilized people, require that no inconsiderable amount of their business shall be done by the intervention of agents, factors, brokers and bailees of some description. Factors, brokers, common carriers, warehousemen, mechanics and manufacturers, are constantly intrusted with large amounts of goods and material, for sale, transportation, safe keeping, or to be manufactured into wares and merchandise. In such cases, it is conceded by all, such possession is not, of itself, fraudulent, but, if fraudulent, it must be established by evidence. In such cases the possession does not accompany the ownership. It is true, the mere possession, generally, is jyrima facie evidence of ownership in the person having the custody of the property, but this presumption may be rebutted by proof of the true ownership. But, in the hands of carriers and ware-housemen, the possession usually is such that it does not even raise a presumption that they are the owners of the property. Large quantities of material are constantly being placed in the hands of artificers and manufacturers, for the purposes of being converted into goods, wares and merchandise, and yet it is permitted to the owner to prove and hold his property, unless the transaction is tainted with fraud in fact. And it is believed, that, so far as it relates to trade and commerce, the rule has always obtained, that the character of the transaction may be shown. The rule seems to be equally well settled, that stock in the hands of an agister may be held by the true owner, as against the creditors or even vendees of the agister. Property hired or loaned for temporary use falls within the same rule; and no reason is perceived why a farmer may not hire or borrow stock and implements to carry on his business, or why the wealthy may not, of their abundance, leave their property to a poor neighbor or relative, to enable them to obtain a livelihood, without forfeiting the ownership. To so hold, would cut off all the aid that may be kindly extended by the affluent to the industrious poor, who are willing, but unable, to contribute to the production, so essentially necessary to the support and well-being of society. The prosperity of communities is, in this manner, advanced perhaps to an equal extent as in other cases of bailment, which is fully sanctioned and protected by the laws of all countries. But the second section of the statute of frauds and perjuries (B. S. 259) declares, that, “where any loan of goods and chattels shall be pretended to have been made to any person, with whom, or those claiming under him, possession shall have remained for the space of five years, without demand made and pursued by due process of law on the part of the pretended lender, or where any reservation or limitation shall be pretended to have been made of an use, or property by way of condition, reservation, remainder or otherwise, in goods or chattels, the possession whereof shall have remained in another, as aforesaid, the same shall be taken, as to creditors and purchasers of the person aforesaid, so remaining in possession, to be fraudulent, and that the absolute property is with the possession, unless such loan, reservation or limitation of use or property were declared by will or deed in writing proved and recorded as aforesaid.” From this enactment, there can be no question, that a loan of personal property may be made by parol and be protected by the law, for five years, unless it can be shown to have been contrived for fraudulent purposes. If, however, it remains in the hands of the person to whom it is loaned beyond that period, it becomes fraudulent se. Under the statute, as to creditors and purchasers of the borrower, the loan is evidenced by deed duly acknowledged and recorded. In this case, W. S. Peters had not been in possession for the period of five years. It appears, that, in the latter part of the year 1859, or the early part of 1860, appellant came from Ohio and purchased the property and placed it in the hands of William, and it was replevied in. December, 1863. It thus appears, that he had been in possession only about four years. It is, however, urged, that William sold a portion of the property placed in his hands, and, that this is evidence of fraud. He states in his testimony, that such was the fact, but that he replaced it with other property for appellant. He, however, states, that he had discretionary power in the management of the property, and acted for his brother. This was not inconsistent with the use or reservation of the property by appellant, if made in good faith, and he states, that he had no interest in, or owned any portion of, the property. In his evidence, William Peters swears, that no time was agreed upon when the arrangement should cease, but that it depended upon the will of the parties. The statute does not require, that the time shall he fixed, wheu the loan is made, for its termination, but that, if possession under the loan shall continue for five years, then the ownership shall be taken to be in the borrower. That presumption does not arise in this case from continued possession, as the five years had not elapsed. It may be said this was not a loan. If not, it is still within the statute, because, by the arrangement, appellant had the remainder, or reservation of the ultimate use of the property. And it does not matter whether it is called a loan or an agency. The effect is the same in either case. Upon an attentive examination of all the evidence in this record, we are not prepared to hold that fraud is established, but would be better satisfied to have it passed upon by another jury. The judgment of the court below is reversed and the cause remanded. Judgment reversed.