Gere v. Murray , 6 Minn. 305 ( 1861 )

By the Oowrt

— Atwater, J.-

— The counsel for the Defendant requested the Court to charge the jury, “ that the as-signee had no right- to carry on the business at retail, and that if it was so intended by tbe assignors, at tbe time of tbe assignment, it is void.” Tbe Court refused so to charge, but charged that the assignee had no right to carry on the business at retail, and that if it were so intended by the assignors, such intent would be strongly indicative of fraud, but that the question would be for them to decide.

The Court was further requested to charge, “ that if the intent of the assignors at the time the assignment was to prevent a forced sale of their property and in order that the business might be continued, and the goods sold at retail, the deed is void.” The Court refused so to charge, but charged that it was a question for the jury, and that such intent, if so found, would be strongly indicative of fraud. ,

We think the learned judge erred in refusing to charge as requested, especially in the form last stated. This Court has repeatedly held that an unlawful intent appearing on the face of the instrument, (in cases of voluntary assignments) would vitiate the conveyance. 2 Min., 264, Greenleaf vs. Edes; 3 Ib., 364, 377, 389; 4 Ib., 204. Certainly there can be no difference in principle, or in the nature of .the fraud, whether the unlawful intent appear on the instrument of conveyance, or be discovered by evidence aliunde. The statute is broad, and makes every conveyance made with the intent to hinder, &c., void as against the person so hindered, &c. Whenever the obnoxious intent is proved, the law declares the conveyance void, and the jury have nothing further to do with the matter. Where the language or provisions of the instrument betray the intent, the proof is deemed conclusive, and there is nothing to submit to a jury. Where such is not the case, and the jury find the intent from extrinsic evidence, the result is equally fatal to the validity of the conveyance. See. 4 of chap. 51, of Comp Stat., is not more applicable to a case submitted to a j ury, where the question of fraudulent intent is involved, than to any other; for if anything more is to be ascertained by a jury than the existence of a certain intent, then, however palpably fraudulent an instrument of assignment might appear on its face, it must still be submitted to a jury. But where the intent to do a certain act is admitted or proved, and the necessary consequence or result of that act is to binder, delay or defraud creditors, it would be idle to permit a party to go^to a jury on the question of the legality of such act. The Courts have uniformly refused it, and it is to be hoped that the salutary rule which has been established is not soon to be changed.

The New York statute relative to fraudulent conveyances, (of which ours is a copy,) has been more fully discussed in the Courts of that State, than almost any other branch of the law, and it is unnecessary here to travel over the ground which has been so thoroughly examined. "We gather as the result of their investigations, that the question of fraudulent intent is a mixed question of law and fact, that is, that the question of the existence of a certain intent is a question of fact for the jury, (when not disclosed by the papers) and for the Court to declare whether such intent be fraudulent or otherwise. This view we think consistent with the language, of sec. 4 of clump. 51, above cited. I think the true meaning and fair construction of the language there used, is the same as though it read “the question of the existence of fraudulent intent in all cases,” &c., and if so read, it could scarcely be claimed that the Statute authorized the jury to determine what constituted a fraudulent intent. If the jury find “the intent of the assignors at the time of the assignment, was to prevent a forced sale of their property in order that the business might be continued and the goods sold at retail,” the effect of such intent upon the conveyance must be precisely the same, as if such intent had been written out in the instrument of conveyance itself. Nor would the fact that the assignee had no knowledge of such intent, render the assignment any the more valid. It is the fraud on the part of the party making the conveyance that the statute is intended to reach, and the innocence of the assignee in the premises, cannot cure the fraud in the makers. Secs. 1 and 5 of chap. 51 clearly show that the fraudulent intent on the part of the maker of the conveyance is what vitiates the same, and indeed, it must be apparent that any other construction would render the statute almost wholly nugatory. And see Hildreth vs. Sands, 2 Johns. Ch. R., 42-3, and cases there cited; Burr, on Ass., 2d Ed., p. 422; 1 Sand., Ch. R., 85; 18 Bar., 272; 24 Barb., 120-1; 10 Pick., 408; 1 Curtis, 157. We do not -understand the remarks in Sands vs. Hildreth, 14 John., 493, to conflict with the views here expressed, as an assignee of an insolvent, accepting the trust for the benefit of creditors, is' not regarded as a purchaser for a valuable consideration.

Assuming therefore, that the jury find that the intent of the assignors at the time of the assignment was to prevent a forced sale of their property in order that the business might be continued and the goods sold at retail, was the Defendant entitled to the charge that the deed was void ? We think he was, and that the Judge erred in refusing so to charge. The law recognizes and tolerates no right on the part of an insolvent assigning for the benefit of creditors, to interfere with or make any arrangement whatever with reference to the as» signed property after its transfer to the trustee. The only-intent consistent with the bona fides of the transaction on his part is, that the property be devoted absolutely, unreservedly, and in the shortest time possible for the best interests of his creditors, to the payment of his debts. The law regards the property of the debtor as of right, belonging to his creditors, and sanctions no scheme or device to deprive them of it. The intent to prevent a forced sale of the property alone, might not be inconsistent with the purpose to protect the rights and interests of creditors, but such an intent harbored with the design of continuing the business and selling the. goods at retail, is clearly inconsistent with such purpose, or at least, if carried into effect, might indefinitely prolong the time of payment, if not entirely prevent it. The law declares such intent fraudulent, and it is not for the jury to say, that in fact it was not so. Griswold vs. Sheldon et al., 4 Comstock, 581; Edgill vs. Hart., 5 Sel., 218; Ford et al. vs. Williams, 3 Ker., 577; 19 N. Y., 123, and cases cited. In the most or all of these cas(es the intent declared fraudulent appeared on the face of the instrument of conveyance, but as in the view of this Court it- makes no difference whether the intent so appear, or from evidence aliunde, the principles there established are applicable to the case at bar.

The judgment is reversed and a new trial granted.