Ettlinger v. Kahn

Burg-ess, J. On the thirteenth day of November, 1893, the defendant Kahn, who was at that time, and had been for about eight years prior thereto, the owner of and operating a general mercantile store in Monett, Barry county, Missouri, being heavily indebted and unable to meet his liabilities as they became due, executed a deed of trust to the interpleader, Lehnhard, by which he conveyed to him said stock of merchandise, of the value of from $6,000 to $12,000, two shares of bank stock which he held in the Commercial Bank of Monett (of which the interpleader was president), of the value of $100, and building and loan stock of the proximate value of $150, to secure his wife Flora Kahn in the sum of $4,000; his nephew Sig. Solomon, $930, which he owed him for services rendered as clerk in the store; his niece Sidonia Solomon, $2,000, and said bank $1,500, all of which was then past due. [496] Defendant was indebted to plaintiffs in about the sum of $2,700, about sixteen hundred of which was due on the note sued on, and (the balance on account of goods purchased which was not due at the time of the execution of the deed of trust. At the time of the execution of said deed defendant was, and had been for some two years prior thereto, vice-president and the owner of two shares of stock in said bank. Immediately upon the execution of the deed of trust interpleader Lehnhard took possession of the stock of goods, and was in possession thereof, when they were seized under the writ of attachment sued out in this case as the property of the defendant Kahn. Inter-pleader retained possession of the attached property by giving bond for its delivery, as provided by statute in such circumstances. The grounds of the attachment were, that defendant had fraudulently conveyed or assigned his property or effects, so as to hinder or' delay his creditors; and that he had fraudulently concealed, removed, or disposed of his property or effects so as to hinder or delay his creditors. At the return term of the writ, defendant pleaded in abatement to the attachment, and Lehnhard inter-pleaded, claiming the attached property under deed of trust. At the close of the evidence the court was asked to instruct the jury to find a verdict for the interpleader, which was refused and exceptions duly saved. Under the instructions given the jury returned a verdict for plaintiffs, and judgment was rendered in accordance therewith, and the interpleader, having unsuccessfully moved for a new trial, has appealed the ease to this court. The first insistence is, that the court committed [497] error in refusing to instruct the jury to find for the interpleader. This insistence is predicated on the ground that there was no evidence showing or tending to show fraud in the execution of the deed of trust. This same question is raised in the motion for a new trial, so that it is immaterial from which standpoint it be considered, whether upon the refusal of the court to instruct the jury to find for the interpleader, or upon its refusal to set aside the verdict, and grant the inter-pleader a new trial. It has been uniformly held by this court, that where the evidence is conflicting we will not weigh it for the purpose of determining whether the verdict is supported by the weight of the evidence or not, but, where a verdict is not supported by substantial evidence, that it is the duty of the trial court to set it aside on motion, and upon its failure to so do this court will in such circumstances reverse the judgment. Powell v. Railroad, 76 Mo. 80; Avery v. Fitzgerald, 94 Mo. 207; Jackson v. Hardin, 83 Mo. 175; Long v. Moon, 107 Mo. 334; Landis v. Hamilton, 77 Mo. 554. We have looked in vain through the record to find any substantial evidence of a purpose on the part of defendant to hinder, delay, or defraud his creditors in the execution of the deed of trust to Lehnhard for the purpose of securing the creditors named in said deed. Even if such was 'the purpose and intention of Kahn, there isn’t the slightest evidence that either of the beneficiaries participated in such scheme. Kahn, although insolvent, had the right to prefer one or more of his creditors to all others, provided the debts thus secured were bona fide, and said creditors were not parties to any fraudulent act on the part of Kahn to. defraud, hinder, or delay his other creditors. His intention seems not to have been to defraud his credi [498] tors but to prefer certain of them, and this he had the unquestionable right to do. While there may arise a suspicion of fraud on the part of Kahn in the execution of the deed of trust, because of the fact that one of the four creditors preferred thereby is his wife, one his nephew, and another his niece, that of itself does not show fraud, and, while it may be shown by facts and circumstances, is never presumed, but must be proven. Kahn was introduced as a witness by plaintiff, and was the only witness who testified with regard to .the debts owing to the preferred creditors, and not one word or syllable can be found in his evidence which tends in the slightest to show that they are not bona fide, other than what suspicion, if any, may arise from the fact that one of them is his wife, and two others his relatives, and this even is dispelled by his evidence, which explains how, when, and for what the debts were contracted. The burden of proof was upon plaintiffs to show that the deed of trust was executed by Kahn for the purpose of hindering, delaying, or defrauding his creditors, and, while fraud is rarely ever susceptible of direct proof, it may be shown by facts and circumstances if sufficient, but there was a total absence of such proof in this case. T. S. Frost, clerk of the circuit court of Barry county, was introduced as a witness on the part of plaintiffs, and over the objection of the interpleader was permitted to produce and read to the jury, the numbers, titles of causes and the amounts sued for by different firms, claiming to be creditors of Kahn, upon which suits had been brought against him and which were then pending in that court. Such evidence was held to have been improperly admitted on the trial of an interplea in a suit by attachment in Albert v. Besel, 88 Mo. 150, in which it is said: [499] “Again if the plaintiff desired to show that Besel was indebted to other persons he should have done so by competent evidence. The production merely of accounts sued upon and upon which judgment had not been recovered was not sufficient proof. It does not appear that the accounts were admitted by the debtor to be correct.” It is true this evidence was somewhat cumulative, as defendant himself admitted that he was indebted to the same parties in different amounts, and while under such circumstances the judgment should not be reversed on that ground alone, we pass upon the question in order that the error may not be repeated on anothér trial of the cause. The judgment is reversed and the cause remanded. G-antt, P. J., and Sherwood, J., concur.