Hancock v. Horan

Wheeler, J. It is evident from the charge of the Court, that the conveyance from the debtor, Cassidy, to O’Connell, and from O’Connell to Horan, the defendant, was regarded and treated by the Court as the case of a rightful preference, by the debtor, of one creditor to another. This is apparent from the fifth proposition in the charge taken in connexion [511] with the seventh, to the effect, that, though the purchase money was not advanced by Horan, yet if Cassidy was indebted to Horan, and either conveyance was made in consideration of such indebtedness, the jury would find for the defendant. The fifth proposition, to the effect that a debtor has a right to prefer one creditor to another, is undoubtedly correct in the abstract. It, however, is subject to the qualification that it must be done openly and fairly, without any other object than the act, on its face, imports; it must not be done secretly or fraudulently. (Edrington v. Rogers, et al., supra.) The present manifestly was not the case of preferring a creditor j nor can the secret trust, which it was sought to establish in favor of the defendant, he maintained as an exercise of that right. The charge of the Court, therefore, though it might have been correct in the abstract, or as applied to a different-state of case, had no proper application to the present case p hut was calculated to mislead, and probably did mislead the-jury. There can be but little doubt that it controlled their-verdict. It is true, the Court charged, in general terms, that a conveyance made to defraud creditors is void. But in the-proposed application of the law to the facts, which followed,., this principle appears to have been lost sight of; and the-question of fraud, in fact, was virtually and effectually withdrawn from the consideration of the jury. Under the charge-of the Court, upon the supposed resulting trust, and the right of preferring creditors, the jury were bound to find for the-defendant, however convincing to their minds the evidence may have been, that the conveyance was in fact made to defeat and defraud creditors of their rights. That this was error,. is manifest. The refusal of the Court to give instructions asked by the plaintiff proceeded, doubtless, from the same opinion, which the charge maintains, that if the conveyance was made in consideration of an antecedent indebtedness, it was a lawful preference of one creditor over others ; and was valid and effectual to vest title in the defendant; whatever, and however [512] convincing the evidence of fraud in fact. It is not perceived upon what other principle the fifth instruction asked could have been refused. It appears to have been framed with a direct reference to the ruling of this Court in the case of Bryan v. Kelton, (1 Tex. R. 415,) and did but ask an application of the law of that case to the present. It could not have been refused as irrelevant, or as embraced in the general charge of the Court; for it was neither. It was plainly applicable to the evidence; and the general charge did not embrace it in terms or in substance. The debtor, and alleged fraudulent grantor, was introduced as a witness by the defendant to uphold Ms conveyance, as is commonly the case where a party claims under a conveyance thus impeached as a fraud upon creditors. The grantor in such Cases is held to be a competent witness for the grantee, because, it is said, his interest is adverse to the party calling Mm. And so it is, upon the supposition that he has or may have other property liable to be subjected to the payment of his debts ; and has not conveyed upon any secret trust or understanding, whereby he is to be benefited in case of the success of the party claiming to hold the property under his conveyance. He may stand indifferent between the parties, and be entitled to credit; and therefore the law allows him to testify. But common observation and experience show how seldom this is the case; in fact, where he is called to support his own alleged fraudulent conveyance, the fraudulent grantor will, of course, feel a strong desire to prevent the detection and exposition of Ms own fraudulent conduct. He who is called to testify to the question of his own integrity, if the truth be adverse to it, must be more than ordinarily indifferent to the opinions of mankind, if he does not experience a powerful motive to swerve from the truth, though he should not expect to derive any pecuniary advantage from his testimony. The very position which such a witness occupies goes to his credibility; which is subject to observation, and is to be judged of by the jury. [513] As the case must be remanded fór a new trial, we will not express our opinion upon the evidence ; nor upon other assignments of error not relied on in argument for the appellant. The judgment is reversed and the cause remanded. Reversed and remanded.