Wake v. Griffin

Lake, J. The property in controversy remaining in the possession and under the control of John C. McMahon after the pretended sales by him to his wife, and by [50] her to Patrick S. Griffin, the defendant in error, and until after the execution was levied, and there being, as we think, no sufficient evidence that either of said sales was made in good faith on the part of any of the parties to them, they were clearly void as against the execution creditor. In principle, the case is not different from Brunswick v. McClay, 7 Neb., 137. Indeed, in this case, the statutory presumption of fraud arising from such continued occupation of the property by the seller is not only not dispelled, but is overwhelmingly sustained by the evidence on the trial. It may be, and probably is, true that Mrs. McMahon, five or six years prior to this transaction, let her husband have the eight hundred dollars, as she claims, but there is not a sjdlable of testimony to show that there was any agreement or understanding between them that he should ever repay it. And not only this, but aside from the fact that McMahon had and used this money, there is absolutely no evidence tending to show good faith on the part of the McMahons or the defendant in error in respect to said sales. But, even if Mrs. McMahon had loaned the money to her husband, under circumstances that would have made it a good consideration for a bona fide transfer by him to her of this property in payment, the law will not permit her to use it successfully, as a shield merely, in the perpetration of a fraud upon his creditors by her husband. Now, even admitting that McMahon was justly indebted to his wife in a sum of money which he, in good conscience, ought to have paid, what does the evidence show has been done about it? First. Asale of this property, consisting of billiard tables and fixtures, to his wife nominally in payment of the debt. Second. A sale of the same articles by Mrs. McMahon [51] to her brother, the defendant in error, who is a farmer living several miles from Columbus, where the tables were then in use, at the nominal price of $1,500, taking his note, secured by mortgage'upon the same property, in-payment. And Third. Since the commencement of this replevin suit a sale of the property by the defendant in error to one Thomas Griffin, a nephew of Mrs. McMahon, nominally for $1600, of which amount $1500 were satisfied by the surrender of the note given by Patrick to his sister as aforesaid, and the residue by the individual note of said Thomas. Now, with Thomas Griffin, the owner of the tables thus paid for, how stands Mrs. McMahon? "With the consideration which she received for the sale to her brother surrendered, what has she left to show for the property received from her husband ? And how did Thomas Griffin remunerate her for giving up the $1,500 note? These inquiries are naturally suggested, and they are important. It is disclosed by McMahon’s testimony that at the time of these transactions he was indebted to Thomas Griffin upwards of a thousand dollars, which was secured by a mortgage on his real estate; and it is further shown that these tables, either directly or indirectly, went to pay off said indebtedness, which being done; the mortgaged premises were conveyed to Mrs. McMahon. The design of this manipulation of the property in controversy is apparent. The scheme is too transparent to deceive any one. The ear-marks of fraud are all over the transaction referred to; and the defendant in en’or was an active participant in the endeavor to cover up the property, as is shown by the stealthy man-, ner in which he removed and disposed of the tables after knowing the execution was levied upon them. As before stated, the money forming the pretended [52] consideration for the sale by McMahon to his wife, she delivered to him several years ago, without, so far as appears, there being any agreement respecting it. During all of these years, McMahon has had this money invested in his business, treating it in all respects precisely as if it were his own means; obtaining credit, doubtless, on the strength of it, but in no way recognizing any obligation as resting upon him to repay it. Under these circumstances, it could not be successfully contended that Mrs. McMahon had any claim upon her husband for the money, which the law recognizes, or would enforce; nor will the law permit her by means of a voluntary sale, nominally in repayment of that money, to appropriate his property to the exclusion of the just claims of bona fide creditors. It is contended also, that the court erred in two of the instructions given to the jury. By one of these instructions — the first requested on behalf of the defendant in error — the jury were told in substance, that it was immaterial that McMahon was largely indebted at the time of selling the property to his wife. This was clearly erroneous. The fact of his owing other debts at that time was a circumstance which might account for his evident desire to put' his property in other hands, and beyond the reach of legal process. The theory of the defense below doubtless was, that these several sales were mere shams, or if any real transfer took place, that it was the result of a fraudulent conspiracy and device to put the property out of the reach of McMahon’s creditors. In this view of the transactions between the McMahons and the two Griffins — and there is strong evidence in the record to justify it — the fact that John C.. McMahon was largely indebted was of prime importance, and the jury ought .to have been so informed. Not much headway would be made in proving to a jury that a sale of chattels [53] had been made for the purpose of defrauding creditors without testimony showing the seller to have been indebted at the time of making it. As to the other instruction complained of, when abstractly considered, we see no objection. If there were any evidence of McMahon being really indebted to his wife at the time, it would have been well enough; but there being no such evidence, it ought not to have been given. Eor these reasons the judgment is reversed, and the cause remanded to the court below for a new trial. Reversed and remanded.