Greenwell v. Nash

By tbe Court, Hawley, C. J.: Tbe plaintiff, Greenwell, purchased from J. J. Mann certain personal property belonging to tbe copartnership of Smith & Mann. This property was afterwards levied upon and taken by tbe defendant, Nash, sheriff of Humboldt county, as tbe property of Smith & Mann, under and by virtue of a writ of execution issued upon the judgment obtained by Stevenson & Son against Smith & Mann. Plaintiff, claiming to be tbe owner of tbe property, brought this suit to recover its value. Did tbe court err in giving tbe following instruction? “ If you find from tbe evidence that tbe acts of said Mann in relation to the alleged sale of said property to plaintiff were fraudulent as to tbe creditors of Smith & Mann, and (that) they were sufficient to put an ordinarily intelligent [288] man on his guard. In other words, if you find from the evidence that his acts were fraudulent as to such creditors and (were) such as to arouse suspicions of a fraudulent intent on his part in the mind of a man of ordinary mental capacity, then I charge you that it was the duty of plaintiff to satisfy himself of the integrity of the transaction on the part of Mann before making aDy purchase, and that if he failed to do so you may reasonably presume that he participated in the fraud of Mann.” As an abstract legal proposition this instruction is erroneous in assuming, as it does, that plaintiff Greenwell had notice of the fraudulent acts of Mann. The evidence was sufficient to authorize the giving of a proper instruction on this point. It is well settled, in actions of this character, that whenever the evidence shows that a sale is made by the vendor with the intent to hinder, delay and defraud creditors, to a purchaser having" knowledge of such intent, the sale is void. The knowledge to be brought home to the purchaser need not be actual, positive information or notice. The jury may, in order to determine whether the purchaser had knowledge of the fraudulent intent of the vendor, take into consideration the acts and declarations of the respective parties and all the facts and circumstances surrounding the sale (Thomas v. Sullivan, ante; Craig’s Administrator’s Appeals, 77 Penn. St. 448), and if the knowledge of the purchaser, from the evidence thus presented, is sufficient to put him upon inquiry, then the jury would have the right to infer that he had knowledge of the fraudulent character of the transaction. (Humphries v. Freeman, 22 Tex. 45; Atwood v. Impson, 20 N. J. Ch. 151; Strauss v. Kranert, 56 Ill. 254; Ringgold v. Waggoner, 14 Ark. 69.) This rule is applied even in cases where the proofs show that the purchaser has paid a full consideration for the property. (Green v. Tantum, 19 N. J. Eq. 105; Tantum v. Green, 21 N. J. Eq. 364; Wright v. Brandis, 1 Carter, Ind. 336; Stoval v. The Farmers' and Merchants' Bank of Memphis, 8 S. & M. 306. Leonard, J., having been of counsel in the court below, did not participate in the foregoing decision.