Camp v. Thompson

Berry, J. The principal question in this case is whether certain lumber was conveyed by one Clark to the plaintiffs, with intent to hinder, delay or defraud creditors. It appeared that, in September, 1875, Clark entered into a contract (Exhibit A) with plaintiffs, whereby he purchased the right to cut logs upon their land at an agreed stumpage, and, to secure the payment thereof, and of such sums as might be expended by plaintiffs in relation to the logs, it was agreed that the title to the logs should remain in plaintiffs until the money due them on account thereof should be paid. The contract further provided that in case Clark did not pay for the logs by a given time, he might saw them, and deliver to plaintiffs, for their security, the lumber made therefrom, and from other logs, to a specified amount. The testimony in the case went to show that, pursuant to the contract, Clark sawed a part of the logs, and delivered to plaintiffs the lumber in controversy; that he stopped delivering lumber in October, 1876; that at that time, his indebtedness to plaintiffs for stumpage and advances was over $12,000; that being desirous of procuring more money, he made a bill of sale (Exhibit B) of the lumber to plaintiffs, receiving from them the paper, Exhibit C, and money sufficient to make up, with stumpage and previous advances, $13,000, and supplies to the amount of $1,500, in all $14,500, and that he also received from plaintiffs a transfer of all the unmanufactured logs held by them as security under Exhibit A, and which were of the value of about $5,000. There was also testimony going to show that at the [180] time when the bill of sale was made, Clark was solvent — that is to say, that he owned and was possessed of several thousand dollars’ worth of unexempt property, over and above his indebtedness, upon which execution could be levied, and that a considerable part of it was wholly unencumbered. There was also evidence tending to establish the fact that the defendant bank, by which the bill of sale is attacked in this case, held in the hands of its cashier, as security for Clark’s indebtedness, more property belonging to Clark than would suffice to pay all his indebtedness. The bill of sale (Exhibit B) was an absolute conveyance of the lumber to the plaintiffs. Exhibit C, the paper given to Clark by plaintiffs, provided that the plaintiffs should sell and dispose of the lumber conveyed by the bill of sale, and apply the proceeds, first, to the payment of the sum of $14,500 aforesaid and interest, together with the charges and expenses of the care and sale of the lumber, and, second, to pay over to Clark, or his representatives or assigns, the remainder of the proceeds of the sale. There is no evidence of any fraudulent intent in the transaction between the plaintiffs and Clark, other than such (if any) as is found in the bill of sale and the paper, Exhibit C, and the plaintiffs’ possession of and disposal of the lumber. The jury brought in a verdict for the plaintiffs, for the value of the lumber attached by the defendants. The verdict is, in our opinion, sustained by the evidence, and we think the contract (Exhibit A) was properly received in evidence as a part of the history of the transactions between Clark and the plaintiffs. The transactions evidenced by the bill of sale and Exhibit C do not fall within the purview of Gen. St. c. 41, § 14, enacting that all conveyances of goods, “made in trust for the use of the person making the same, shall be void, ” as against creditors of such person. This section has no reference to cases in which the conveyance is made, as in the instance at bar, primarily and principally for the use of the grantee, [181] and where the reservation to the grantor is merely incidental and partial. Vose v. Stickney, 19 Minn. 367, and cases cited; Truitt v. Caldwell, 3 Minn. 257 (364.) Neither do these transactions constitute a mortgage, for they show clearly that the entire property in the lumber conveyed by the bill of sale was intended to pass and did pass to the plaintiffs, and that no property therein was reserved to Clark, or intended to be. Hip interest was not in the lumber, but in any surplus of its proceeds remaining after the plaintiffs were paid. As stated in the outset, then, the principal question in the case was, whether the lumber was conveyed to the plaintiffs with intent to hinder, delay or defraud Clark’s creditors, and, upon the evidence in the case, this question was to be determined upon a consideration of the bill of sale and Exhibit C, including the facts and circumstances attending the execution of these two instruments, and the facts as to plaintiffs’ possession and disposal of the lumber. The question was, then, one of mixed law and fact, and therefore a question for the jury, under proper instructions by the court. This was the view taken by the court below. In its charge to the jury, the court below, having stated, in accordance with the fact, that it was not claimed on the part of the defendants that the evidence showed the existence of actual intent to defraud the creditors of Clark, other than as may be inferred from the bill of sale, the agreement back, and the possession and disposal of the property, proceeded to instruct as follows, viz.: “To constitute the transaction void? so as to enable defendants to recover in this action, it must appear, first, that at the time of the sale of the lumber, Clark was insolvent, and, second, that the effect of the transaction was to hinder and delay Clark’s creditors; * * * that if, at the time of making the bill of sale, Clark had in his own name, subject to be levied upon by execution, sufficient property to pay all his debts, then, for the purposes of this trial, he would be solvent.” We perceive no error here. If Clark was solvent, within the definition laid down by the court, the [182] conveyance effected by the bill of sale could not, in any rational sense, be said to have hindered, delayed or defrauded his creditors; for, notwithstanding the conveyance, Clark would have retained property sufficient to pay all his creditors, and out of which they could readily make their debts in the ordinary course of law. The court further proceeded to charge the jury that if they found Clark to have been insolvent at the time of the making of the bill of sale, it would then be , for them to inquire further into the question of fraudulent intent; that the bill of sale conveyed two classes of lumber, viz., one already delivered upon certain town lots, the other to be thereafter delivered upon the same; that there is no evidence that any lumber was delivered after the making of the bill of sale; that if the lumber actually delivered was not worth more than the sum of $14,500 — the amount of the consideration paid for it— then there would be no excess of value to which a trust in favor of creditors could attach, and therefore no fraud; that if the property sold was of no greater value than the consideration paid, then the effect would not be to hinder and delay the creditors of Clark, for there would not thereby be any property placed beyond their reach other than such as was conveyed for a consideration paid, equal to the value of the same. The court thereupon proceeded to charge the jury that the question before them became one partly of law and partly of fact; that if, as a fact, they found that there was piled upon the lots, and conveyed by the bill of sale, an amount of lumber the value of which in any considerable degree exceeded the consideration paid, in the proceeds of which Claris; was to have a resulting interest, this would constitute a badge of fraud, to be considered in determining whether the sale was made with any fraudulent intent. The idea of the court, as we gather from these and other portions of the charge, appears to have been that, so far as the lumber actually conveyed to and received by the Dlaintiffs was concerned, it was [183] open to the jury, upon all the facts appearing, to infer that there was no intent to hinder, delay or defraud creditors, because the value of the lumber was not, in the opinion of the parties to the bill of sale, nor in fact, in excess of the consideration paid for it by the plaintiffs, to wit, $14,500; and, further, that it was open to the jury, upon all the facts appearing, to infer that the reservation of proceeds of sales in Clark’s favor was, in the intent and expectation of the parties, a reservation of proceeds to arise out of the sale of the lumber which Clark might deliver after the making of the bill of sale, no part of which, however, was ever delivered.- While the charge upon these matters is not so simple and clear as it might have been, we cannot say that it is erroneous. This disposes of what appear to us to be the more important questions in the case. We have not failed to notice the many other ingenious suggestions made by the defendants’ counsel, but do not deem it necessary particularly to advert to them here. Order affirmed.