Bokel, Gwynn, McKenney Co. v. Costello , 22 App. D.C. 81 ( 1903 )

Mr. J ustice Morris

delivered tire opinion of the Court:

We are not advised upon what ground the trial court proceeded in directing a verdict for the defendant in this case; but, of course, it must have assumed that there was no sufficient testimony to go to the jury on the question of the defendant’s intent to hinder or delay the recovery or payment of his debts, for the testimony is plainly conclusive that he conveyed away, lessened, and disposed of his property. We are constrained to differ from the learned justice who tried this case in the court below. We think there was ample testimony to go to the jury upon the question of intent. In fact, we are disposed to think that if he had instructed the jury to return a verdict for the plaintiff, it would not have been error.

As has been repeatedly remarked, intention is mot a thing subject to be proved by direct and positive testimony. It is almost always to be inferred from circumstances and the time and circumstances of the transactions of the present case leave little or no doubt of the fraudulent purpose of the appellee. On the very day on which the trial was to be had before the justice of the peace, he executed a deed of all the property which he had for a grossly and confessedly inadequate consideration; and yet, when three days afterwards all the owners of the property were required to join in a deed of trust, he united in this deed of trust instead of causing the previous deed to be placed on record. It does not avail him, of course, that a consideration of ten dollars is usually understood to be a merely nominal consideration, behind which the true consideration is veiled and kept secret. It was open to him to show the true consideration, if any such there was, which may well be doubted; but until the true consideration is shown, the world is entitled to take him at his word, and to regard the nominal sum mentioned as the only consideration; and this, of course, in the present case was grossly inadequate. Or, if this sum is to be regarded as a merely fictitious thing to make the deed operative under the statute of uses, then the prima facie proof on behalf of the plaintiff is that no consideration at all was paid, and that the. deed was a mere voluntary conveyance, whose only purpose under the circumstances must have been to hinder and delay creditors. It was incumbent on the defendant to explain the transaction, and failing to explain it, he must be regarded as admitting the prima facie case against him.

Reference is made on behalf of the appellee to the fact that the deed bore an internal revenue stamp for $1 as tending to show the real consideration for the conveyance. But litigants are not required to rely upon inferences based upon inferences — the assumption that the parties to this deed of conveyance complied honestly with the internal revenue laws of the United States, and that, in compliance with them, they placed the proper revenue stamp on this document.

That such a deed of conveyance as that here in question, made under the circumstances which appear in this case, is, in the absence of satisfactory evidence to the contrary, prima facie a fraud upon creditors, is the dictate of reason which is amply supported by the authorities. These authorities have been industriously and carefully collected in the brief of counsel for the appellant —at least some of them have been, for the authorities on this subject are almost innumerable. See Goodman v. Wineland, 61 Md. 449; Ellinger v. Crowl, 17 Md. 361; Worthington v. Bullitt, 6 Md. 172; Earnshaw v. Stewart, 64 Md. 513, 2 Atl. 734; Hoye v. Penn, 1 Bland Ch. 28; Baltimore v. Williams, 6 Md. 235; Gebhart v. Merfeld, 51 Md. 322; Fuller v. Brewster, 53 Md. 358; Zimmer v. Miller, 64 Md. 296, 1 Atl. 858; Wagenhurst v. Wineland, 20 App. D. C. 85; Pilling v. Otis, 13 Wis. 495; Kimball v. Thompson, 4 Cush. 441, 50 Am. Dec. 799; Reeves v. Sherwood, 45 Ark. 520; Williams v. Osborne, 95 Ind. 347.

The contention of the appellee that the question before us is in any event no more than an academic case, since, as he claims, the defendant having been discharged by the judgment of the court below can not again be arrested, is substantially an argument to the effect that, in this class of cases, an erroneous decision by the trial court is sufficient, by reason of its very error, to oust this court of jurisdiction in such cases on appeal. We do not think that this contention need to be here seriously considered.

Kegarding, as we do, the ruling of the court below as erroneous, we must reverse the judgment or order appealed from, with costs. The cause will be remanded for a new trial. And it is so ordered.