State v. Johnson , 33 N.H. 441 ( 1856 )

Perley, C. J.

If the mortgage to the defendant was fraudulent, the property mortgaged was liable to attachment and execution for the debts of Frank B. Johnson, without regard to the mortgage. The creditor might treat it as a nullity. Angier v. Ash, 6 Foster 109.

If the mortgage was fraudulent, the goods mortgaged would be the property of the debtor, within the meaning of the statute. They might be taken for his debt, and, in pleading his justification for taking them, the sheriff or creditor would allege that they were the property of the debtor, and proof of the fraud would maintain the plea. The manifest intention of the statute was to punish a fraud, contrived to prevent a creditor from resorting to the property of his debtor for the satisfaction of his debt, in cases where the law gives him that right; and where the creditor has the right to take goods as the property of his debtor, they must be regarded as his property, within the meaning of the statute. The act must be construed with reference to the mischief designed to be suppressed, and the right intended to be protected.

It was conceded on trial, as the case shows, that, if this mortgage was valid, F. B. Johnson had no attachable interest to the value of one hundred dollars in the goods alleged to have been concealed. To prove the case laid in the indictment, it was therefore material to show that the mortgage was fraudulent, and the property liable to be taken without regard to it. To prove that the mortgage was fraudulent was part of the evidence necessary to establish the fact alleged in the indictment, that the goods were the property of the debtor, within the meaning of the statute.

The fact that the defendant had made or received a fraudulent mortgage would not, standing by itself, be evidence that he was guilty of a fraudulent concealment, whether of the same or of different goods. But if another crime be so far connected with the proof of a relevant and material fact, that the fact cannot be shown without introducing evidence of the other crime, the evidence, though it may establish the other crime, is admissible. Com. v. Call, 21 Pick. 522. And that is this case. To make out the material allegation, that the property of the debtor to the value of one hundred dollars, was concealed, it was necessary to show that his mortgage to the defendant was fraudulent, and proof of that fact cannot be shut out, because the evidence necessarily shows that the defendant had been guilty of another offence in taking the fraudulent mortgage. Was the evidence introduced by the government competent to prove that the mortgage was fraudulent ?

Evidence of other sales and dispositions of his property by the debtor, to defraud his creditors, so connected in time and circumstances as to constitute parts of a general scheme of fraud, is competent to prove that the transaction immediately in question was fraudulent.

The conduct and declarations of a grantor respecting the estate conveyed, and tending to prove a fraudulent intention on his part before the conveyance, is proper evidence for the jury upon an inquiry into the validity of the conveyance. Bridge v. Eggleston, 14 Mass. 245.

It is established practice to admit evidence of a debtor’s disposition of his estate, made at or about the same time, to show a fraudulent purpose in the debtor to injure his creditors. So, where the charge was the procurement of goods by a fraudulent conspiracy, testimony was admitted of other transactions of the supposed conspirators, soon after, to prove a probable intent and combination to defraud in the first case. Lovell v. Briggs, 2 N. H. 223.

In Whittier v. Varney, 10 N. H. 294, it is said, <£ evidence tending to show a fraudulent intent on the part of G. D. Varney,” (the debtor,) “ and the defendant, about the time of the failure, and of the subsequent conveyance of the property in question to the defendant, would render it probable that the property was conveyed under the influence of that intent; and the evidence to show other fraudulent conveyances, by G. D. Varney, through other persons, to the defendant, about the time of his failure, had a legitimate tendency to show such an intent and purpose. Such evidence might well lead to a probable belief that tho transfer of the lands now in question had been made to cover them from creditors, in part execution of the fraudulent purpose.”

Pretended transfers of property are always made with the forms of a real sale, and evidence is always ready to show a due execution of bills of sale, and a delivery of the property. This evidence it is necessary to rebut, and it can only be done by showing various circumstances in the control and management of such property, and the situation and means of the parties, their previous dealings with and knowledge of each other, and in certain cases the dealings of the vendor with others as to other property, at or about the same time, even without the knowledge of the vendee.” Blake v. White, 13 N. H. 271; Angier v. Ash, 6 Foster 400.

In order to avoid a sale of goods on the ground of false and fraudulent conduct in the vendee, in representing himself to be a man of good property and credit, when he was not so, it is competent to give evidence of similar false pretences successfully used to other persons in the same town, about the same time, to show a general plan to amass property by fraud. McKenney v. Dingley, 4 Greenl. 172. In the present case the evidence went to show that F. B. Johnson, the debtor, commenced the purchase of liquors on the 8th of June, 1854, upon a false representation of his ability to pay; and from this the inference might be fairly drawn that when he bought the goods he did not expect nor intend to pay for them, and that he then entertained the design to defraud his creditors.

The jury would be well warranted in finding that the casks sent over the railroad to the defendant, on the 11th of July, 1854, contained liquors belonging to the stock of F. B. Johnson; as they agreed in general description, were marked and sent in the same way as the others, which were proved to have been part of that stock; and especially as the defendant, who must have known where he got the casks, and what they contained, does not undertake to give any account of them.

The liquors were all bought by F. B. Johnson on credit, and before the price of any purchase fell due, the evidence tended to show that he had disposed of all these goods, and his other personal property, and the bulk and substance of his real estate, without making provision for any of these debts, and leaving a large amount of debts beyond his ability to pay, if these sales and mortgages should be held valid.

A 1-most immediately on receiving the goods he proceeded to dispose of large portions of them to this defendant and another brother; and the goods in the fancy shop, sold originally to his other brother, soon after came to the hands of the defendant and are now claimed by him.

The jury might well find on this evidence that these different sales and mortgages were fraudulent in F. B. Johnson, being intended to prevent the property from being taken for his debts, and that they were all parts of one general fraudulent design. They form a connected series, all relating to the same general subject, and the time they cover was not longer than the execution of the scheme required.

The evidence was therefore competent to show the fraud of F. B. Johnson in making the mortgage in question.

But, in order to charge the defendant with the fraud of F. B. Johnson, it was necessary to show that when he took his mortgage he knew of the fraud, and concurred in it. To make the proof of particular transactions, other than the mortgage itself, evidence against the. defendant, it was not necessary that he should, when he took the mortgage, have notice of the particulars ; it would be enough if he were acquainted with the general scheme.

In Foster v. Hall, 12 Pick. 100, it is said, “ they (the creditors) ought to have been allowed to show, if they could, by the acts as well as by the declarations of the grantor, prior to the conveyance in question, that he had a fraudulent design, without requiring them to prove knowledge on the part of the demandant (the vendee,) of the particular acts of the grantor, from which such intent on his part was to be inferred.”

The knowledge by the mortgagee of the mortgagor’s fraud is not, of course, required to be proved by direct evidence. It may be inferred from the circumstances, and the circumstances in this case were quite sufficient to show the knowledge and concurrence of the defendant in the fraudulent scheme of F. B. Johnson. They were brothers. The evidence went to show that a large amount of F. B. Johnson’s goods were sent over the railroad to the defendant in July, 1854. The defendant advised his brother to take a conveyance of the stock of fancy goods, and those goods soon after came into the possession of the defendant, and are claimed by him. The defendant took a mortgage of F. B. Johnson’s house in August, 1854. Almost all the property of F. B. Johnson went into the hands of this defendant and another brother, and the brother took his share with the knowledge and by the advice of the defendant. All this was quite enough to warrant the jury in finding that the defendant had knowledge of any fraud meditated by F. B. Johnson, and concurred in the scheme.

Evidence that at the time when the goods were alleged to have been fraudulently concealed, there was a scheme on foot to dispose of E. B. Johnson’s property, so that his creditors could not reach it for the satisfaction of their debts, and that the defendant was a party and confederate in the scheme, would be competent evidence, bearing directly on the main question in the case, viz: whether the goods were fraudulently concealed, as charged in the indictment.

Some of the facts proved were of an equivocal character; they were introduced to prove an intentional concealment of the goods, but were capable of another interpretation. The goods, for instance, were removed from E. B. Johnson’s shop to the barn. Was this done to conceal them from his creditors, or because there was not convenient room in the shop ? So, for what purpose were they removed into the back street, and under the carpenter’s shop ?. The heads of the casks were painted over. Eor what purpose : to conceal the name of E. B. Johnson, or to stop leakage ? They were taken on Sunday and carried in the night to Cass’s Crossing. To conceal them from the creditors, or because they were wanted immediately in Portsmouth ? It was incumbent on the government to show that these acts were intended to conceal the goods. The intent was an essential ingredient of the offence charged in the indictment.

If at the time there was on foot, and in the course of execution, a general scheme to defraud the creditors of E. B. Johnson, by concealing and covering up his property, and the defendant was one of the confederates in that scheme, that fact would have a legitimate tendency to show the quo animo with which the acts directly connected with the charge of concealment were done. The evidence was quite competent to show that the property was in such a situation that the creditors did not in fact, and could not by ordinary diligence, find it. They were actually deprived of an opportunity to attach the property by the manner in which the defendant kept and managed it. Was it his intention that his acts should have this effect ? The fact that he was then engaged in a general plot to keep all the property of E. B. Johnson from his creditors, must be competent evidence tending to show that his intention was the same in respect to this particular part of it. As in the case of a charge for obtaining goods on fraudulent pretences, other frauds of the same kind, committed by the defendant about the same time, may be proved. McKenney v. Dingley, 4 Grreenl. 172; and on air indictment for passing counterfeit money, it may be found that the defendant had passed other counterfeit money before, to show knowledge and guilty intent. The fraudulent mortgage and the fraudulent concealment are distinct acts, and are made by the statute distinct offences, and may both be committed in reference to the same property. Personal property mortgaged, even when the mortgage is bona fide and valid, is liable under our statute to be taken, subject to the mortgage, for the debt of the mortgagor; and when the mortgage is fraudulent it may be taken without regard to the mortgage. If the property has been first fraudulently concealed, it may be afterwards fraudulently mortgaged, and vice versa. One man might take a fraudulent mortgage and another fraudulently conceal the property mortgaged. Both would be within the terms and within the meaning and mischief of the statute; and if two different men might be guilty of the two separate offences in reference to the same property, it is not easy to see any reason why the same man might not be.

The ground is taken for the defendant, that the offence could not be committed, because, at the time of the concealment, the defendant had been summoned as trustee of Prank B. Johnson, the debtor, in a process of foreign attachment still pending, and that the property, being under attachment by that process, was not liable to be taken in mesne process, or in execution. As the mortgage in this case must have been found by the jury to have been fraudulent, it stands as if the goods had been in the defendants’ possession, without any title or claim; and in such case, under our statute, he would be chargeable for them as trustee, and bound to deliver them over on an execution against him. The evidence tends to show a concealment before the service of the trustee process, and also a concealment continued afterwards. We cannot know whether the jury found the fact of the concealment to have taken place before or after the service of the process, and it is very probable that they did not undertake to settle the time. We must, therefore, understand, in favor of the defendant, that the concealment commenced after the service of the process.

Under the instructions given to the jury we must take it on this case that the property was actually concealed, so that the creditors could not take it, and that it was concealed for the purpose of preventing them from taking it for the satisfaction of their debts. The purpose and the guilty intention would reach to all cases in which the property might be legally taken for the debts of the owner, whether in execution or mesne process. It would not be necessary that the creditor should have the power to take the property immediately, and at the time of concealment. If his debt were not yet due, or were in suit, and judgment not then recovered, and the property were concealed in advance, to prevent its being taken at a future time, it is very clear that the case would be within the statute. If the concealment were made to prevent the creditor from exercising his right to take the property of his debtor for the satisfaction of his debt, whether that right were immediate or prospective, absolute or contingent, it would be a wrong meditated upon the creditor, and within the statute. If the concealment in this case were shown to have been before the debts of F. B. Johnson fell due, and before the creditors had power to take the property or to commence suits, but was intended to defeat the right of the creditors to take the goods when their demands should become due, it cannot be contended that the act would not be within the statute. So, after their suits were .commenced and the mesne process returned, they could not take the property of F. B. Johnson for their debts until those suits were discontinued, or they had received judgment on them. But if, while things remained in that state, the property of F. B. Johnson were concealed to prevent its being taken in new suits, if those then pending should be discontinued, or in execution, if judgment were recovered, it would be concealed to prevent its being attached in mesne process, or taken in execution, within the language and the mischief and meaning of the statute.

The property in the hands of the trustee might be liable to be attached, or taken in execution in various ways and on numerous contingencies. The same creditor that had summoned the defendant as trustee, might discharge him pending the suit, and in that case the property might be taken on the execution issued in that suit, or by another creditor, or the suit in which the trustee was summoned might be wholly discontinued. In the same suit, the creditor, after summoning the trustee, might, it would seem, attach the property of the principal defendant in his hands, and hold it. The attachment taking the property out of the trustee’s hands would be regarded as the act of the plaintiff, and discharge the trustee pro tanto, and the property would be held under the attachment. Such we understand to be the doctrine of Goddard v. Hapgood, 25 Vt. 351.

So we cannot doubt that another creditor might attach the goods in the hands of the trustee, and maintain that the trustee suit was collusive and fraudulent, and that no debt was due to the plaintiff in that suit.

The position of the plaintiff requires him to maintain that if the goods of a debtor, however large in amount, were, by a fraudulent assignment, or any other fraudulent contrivance, placed in the hands of another to keep them from creditors, and one creditor, for a debt however small, should summon the party in' possession of the goods as trustee, the only remedy left to the other creditors would be to serve other processes of foreign attachment, and trust to the chance of charging the trustee, and of finding the property to take in execution, when they had recovered judgment. We think it would be extremely dangerous to hold such a doctrine. &

In Massachusetts the statutes regulating the trustee process are not in all respects like ours, and the cases in that State may not be directly in point here. It is held there, that where one who has the goods of another in his hands, is summoned as his trustee, the same goods are liable to be attached by another creditor, and the officer will hold them subject to the lien of the creditor who has sued the trustee. Burlingham v. Bell, 16 Mass. 321; Platt v. Brown, 16 Pick. 553; Rockwood v. Varnum, 17 Pick. 289, and I think we should hesitate long before we decided that in this State, where a large amount of property was placed in the hands of an assignee to keep it from creditors, a single trustee process, for a trifling amount, or perhaps collusive, would take from all the other creditors their right of resorting to the property itself under our attachment laws.

Suppose the trustee, pending the process, and in anticipation of being charged, should conceal the property of the debtor which was in his hands, to prevent its being taken on the execution which he expected would issue in the suit, this would be a concealment of the debtor’s property to prevent its being taken in execution for his debt. These are some of the numerous ways in which the property of a debtor in the hands of a party summoned as his trustee may be liable to be taken for his debt. If in this case the defendant, being summoned as trustee, concealed the property of F. B. Johnson to prevent its being taken, then or at any future time, for the debt of the owner, it was a wrong aimed against the rights of the creditors, within the terms and the intent and obvious meaning of the statute. To constitute the offence it would not be necessary that the defendant should have in mind any particular creditor, or any particular mode or time of taking the goods. It would be enough if the concealment were made with the general purpose of keeping the property from creditors. It may be observed, though not, perhaps, material to the decision of the legal question, that the creditors of F. B. Johnson did in fact, when these goods were discovered, attach them instead of relying on the trustee process, and in a case like this the chance of charging a trustee who had fraudulently concealed the property in his hands, and of realizing the debt, if he were charged, would in practice be a remedy of trifling value. It is to be apprehended that it would go far to disarm this provision of the statute of its principal remedial force to hold, that when goods are in the hand of a fraudulent trustee he may safely conceal them so that they cannot be taken by the same or other creditors for their debts. The objection that a trustee process was pending against the defendant cannot prevail.

The fact that there was a recorded mortgage of the property to the defendant would not prevent it from being concealed. Even if the mortgage had so described the property that it could be easily known and distinguished when found, the mortgage and record would not assist to find it, if removed and hidden away, and in this case there was nothing to distinguish the property mortgaged from other property of the debtor of the same description. There was nothing in the description of the property mortgaged that would lead the creditor to understand or suspect that it was at the barn, or in the back street, or under the carpenter’s shop. As between the parties it would probably be competent to show, by intrinsic evidence, what particular property was intended to be mortgaged under the general description. But it may well be doubted whether, when the mortgagor has various articles of property answering to the general description in the mortgage, and a part are mortgaged without designating which, so that the creditor, with ordinary diligence, might know what particular property was meant, the mortgage, under our registration law, would be valid against creditors. Dunning v. Stearns, 9 Barb. S. C. Rep. 630.

We cannot see how a demand by the creditor on the defendant can constitute any part of the statutory offence of concealing the debtor’s property.

Spirituous liquors are property, and as such are under the protection of the law. Fuller v. Bean, 10 Foster 181.

The general provision of the statute makes the property of a debtor liable to be taken in mesne process and in execution for his debts, with certain enumerated exceptions. We cannot think that the law relating to the sale of spirituous liquors was intended to have the effect of protecting that species of property in the hands of the owner against the right of the creditor to take it for his debt. If taken in mesne process or execution, such property must be held and disposed of according to law, like other property. If an attempt should be made under color of legal process to evade the law regulating the sale of spirituous and intoxicating liquors, the form of the proceeding might not protect the officer. But the officer is ordered by his precept to take the property of the debtor; the liquors are his property; they are not exempted by any positive law, nor, we think, by any implication from the law relating to the sale of spirituous liquors ; and the officer would be warranted by his writ in taking them, and in selling them fairly on execution, to satisfy the debt, under the general provisions of the law on that subject.

Judgment on the verdict.