Frank v. Humphreys , 24 S.C. 325 ( 1886 )

The opinion of the court was delivered by

Me. Chiee Justice Simpson.

The defendant, a merchant at Greenville, being in failing circumstances, called his creditors together, and effected a compromise at forty cents on the dollar. The plaintiffs attended the meeting, and, consenting to the compromise, received their -pro rata and receipted the defendant in full. Afterwards they instituted the action below, alleging that defendant had falsely represented his ability to pay, and that at the time his creditors accepted his offer of compromise he was able to pay in full, which he kept concealed for the purpose of defrauding his creditors, with other circumstances of fraud, and they prayed that the compromise be declared void and the payment of forty cents on the dollar be regarded as a payment pro tanto, and that they might have judgment for the balance of their debt, to wit, $1,914.20, with interest. The defendant denied the fraud.

Upon the call of the case on calendar I., Judge Kershaw presiding, “it was determined, without objection, that all issues, and. especially the two issues of fraud or no fraud and the amount due, if they should find for the plaintiffs, be referred to the jury. Without framing any issues specially.” The plaintiffs made several requests to charge, all of which his honor charged. The verdict was for the defendant, whereupon, it being conceded by the counsel on both sides that the case was a case in chancery, to he decided by the court upon the facts as settled by the verdict, so far as the court Avas satisfied therewith, his honor, after taking the papers and full time for consideration, filed a written decree, in which he confirmed the verdict, and dismissed the complaint Avith leave to defendant to enter judgment and execution for his costs and disbursements.

The appeal presents a number of exceptions in form, twenty in all. The first sixteen, however, may be consolidated under one head, to wit, because his honor confirmed the verdict, when he should, in the opinion of the appellant, have disregarded it, and have found the compromise fraudulent for the causes stated in these exceptions. The 17th and 18th assign error because his honor interrupted appellant’s counsel in his argument, and corrected his statement of the testimony, in certain particulars, in Avhich his honor thought counsel was mistaken. 19th, because his honor “decided the action was not meritorious,” the appellant having attempted at the time of settlement to get something for their services in making the settlement. And the 20th, “because his honor, having decided upon the objection of the appellant that it Avas not competent for the defendant to give in evidence any conversation betAveen himself and Alexander, who was dead at the time of the trial, it was error for him to allow it to go to the jury, and to use it as proof in making up his decree.”

The appellant’s counsel have not discussed their exceptions seriatim, but submitted their argument under several propositions. First proposition: That his honor erred in refusing to set aside the verdict, (1) because his honor erred in refusing to submit specific issues of fact to the jury upon plaintiffs’ motion, and in submitting the Avhole case, the issues of law .as well as of fact. We find it stated in the “Case,” that after some discussion by counsel, it was determined, without objection, that all issues, &c., should be referred to the jury. Besides this, there is no exception which raises this question. This subdivision, therefore, and the discussion under it must be passed over.

(2) “Because his honor erred in stopping plaintiffs’ counsel in the manner he did, and in stating only a part of defendant’s testimony on a given point, and in telling the jury they must decide according to his notes of testimony as read to them” (16th and 17th exceptions). No error of law can be assigned to a Circuit Judge for correcting counsel in their statements where he, the judge, conceives that a mistake as to the testimony is being made. While the judge, under the constitution, cannot charge upon the facts, yet it is his duty to take down the evidence, or have it taken, and so far as what is said by the witnesses, he is arbiter between counsel, and his notes of testimony may be read. Fromwhat is said in the “Case” as to what occurred, we not only see no legal error affecting the issues involved, but wo think his honor was quite within his power over the conduct of the business before him when he ruled that plaintiffs’ counsel must not appeal from his notes of the testimony to the recollections of the jury, which, before the counsel’s disclaimer, he, the judge, thought was rudely made, as it is stated. Counsel have the right to defend their clients’ interests with earnestness and ardor, and it is commendable for them to do so, but their zeal should be restrained within proper bounds, and to this end much should be left to the discretion of the court.

(3) The next subdivision under the first proposition is, “Because his honor erred in charging the jury, that if the defendant innocently omitted to mention the insurance money, or to include it in his statement of assets, it was no fraud.” If the case was a case at law, and the presiding judge had charged the jury in the general terms as stated, doubtless it would have been error, as even an innocent omission of property, where the creditors are relying upon the statements of the debtor, might vitiate the compromise, at least to the extent of the value of the property thus omitted. But this is not a case at law — it is a case in chancery, and the reference to the jury was to inform the chancellor’s conscience. He was not bound by the verdict; in fact, under the law, even after verdict, he was not relieved from examining for himself and finding his own conclusions. This, it seems, he did. In his well considered written decree, he discusses this very matter fully and satisfactorily, to which Ave refer.

In it, it appears that the policies of insurance were in the name of one Alexander, from whom the defendant had bought the property insured, though they had been assigned to McBee, Avho held them and the mortgage on the premises to secure a debt of f>8,000, $6,000 of which belonged to McBee and the remaining $2,000 to Alexander. The property had been considerably injured by fire, and Alexander was not satisfied but that it would take the insurance money as well as the property in its then condition to indemnify McBee and himself, and he claimed the insurance money as his. Under these circumstances, the defendant did not estimate it as a portion of his assets, to be used in compromise Avith his creditors. It is true that he did use it after-wards in settling Avith his creditors, but this Avas done Avith the consent of Alexander, and Avith the express understanding that a like sum should be expended by Humphreys in repairing the property, so as to reinstate it as a security for the mortgage debt. And it Avas upon these grounds that the judge held, for himself, that the failure of the defendant to mention this money at the compromise was not fraudulent, express or implied. So that his charge to the jury, whether in the abstract right or wrong, Avas not material. Even supposing that the verdict was influenced thereby, yet his honor went behind the verdict and decided for himself, as was his right and duty. We think his finding and ruling in this respect Avas correct.

It will not be necessary to consider the other propositions severally on the question of fraud, or their subdivisions. They resolve themselves into a general allegation, that his honor erred in not finding fraud, actual and intentional, or, at least, implied and constructive, and, therefore, the composition should have been vacated. The fact of fraud, or its existence in a transaction, when alleged, is always a question of fact, and although Avhen it comes before this court in a case in chancery we are at liberty to look into and pass upon it, yet our examination is subject to the familiar principle, that we should not disturb the finding below, except where that finding is wholly unsustained by the evidence, or is manifestly against its weight.

Now, wherein is the decree objectionable as to either of these rules? The specific allegations of fraud alleged in the complaint are, 1st, that the defendant sought to account for his deficiency in assets, because he had unexpectedly been called upon to pay a large sum to the United States Government by reason of some connection with a distillery; and, 2d, that the defendant falsely represented his ability to pay his debts, having more property than stated, which he kept concealed from his creditors. Nothing is said in the exceptions in regard to the distillery; we must, therefore, regard that charge as satisfactorily explained. The other misrepresentations as to the amount of property on hand, or that should have been on hand, specified in the exceptions, were $2,500 alleged to have been taken from the store and turned over to defendant’s wife, just before the compromise; also $1,760, the insurance money, and a mortgage of Mrs. Thurston put down by him at $660, when it should have been $600. We have looked into the testimony as to these matters, and we cannot see that his honor’s refusal to set aside the compromise was wholly unsupported, or against the weight of the testimony as to these matters. And the same may be said as to the other exceptions in which the appellants allege, generally, that the evidence showed that the defendant had other property than that disclosed, &c., and that his honor erred in confirming the verdict, &c.

The 19th exception raises no question of law or fact.

As to the 20th. It appears that his honor sustained appellants' exception to conversation with Alexander, and if he after-wards permitted it to go to the jury, we have not found such fact in the “Case”; but even if be did, it would not be sufficient to reopen the case, and have the matter reinvestigated. The main question involved was one of fraud in the conduct of the defendant. This question has been passed upon by a jury after full and most thorough examination and argument. . The verdict was for the defendant. This verdict the Circuit Judge has confirmed, and made its result his finding — not hastily, but after taking the papers and giving the case mature consideration, as is apparent from his decree. Under these circumstances, it should require a stronger showing than that made by the appellants, to overthrow the judgment.

It is the judgment of this court, that the judgment of the Circuit Court be affirmed.