Citation Numbers: 15 Neb. 285
Judges: Cobb, Lake, Maxwell
Filed Date: 7/15/1883
Status: Precedential
Modified Date: 7/20/2022
In July, 1882, one F. M. Woodruff had a store containing general merchandise at Friendville, in this state, and was embarrassed by his liabilities. The total amount of' his debts at this time seems to have been about $4,000, and the value of the stock the testimony shows to have been from $2,700 to $4,000, while the book accounts were from $300 to $1,200. Woodruff was indebted to one Stone, who kept a bank at that place, a little over $200 for money-loaned. Woodruff’s creditors were pressing him very hard at this time, when he sold his entire stock, including the-book accounts, to Stone for $2,000, which was paid by deducting the amount Woodruff was owing Stone, and by Stone giving his promissory notes for the balance — one of said notes for $500, with interest, due in six months; one;
It appears from the testimony that he was an employe of Stone at $16 per month and board, at the time of this purchase; that he had been in the employ of Stone at Friendville for about two years; that prior to that time he had resided with his father in Hamilton county, and he states in his testimony “ a part of the time I milled it,” — tended mill for his brother. It nowhere appears that he possessed any property whatever. Nor does the testimony show that at the time of the levy on the goods in question, he had paid one cent thereon. But it is said he gave his negotiable promissory notes for the goods, and that this is sufficient to prove a valuable consideration. Whether negotiable promissory notes given under the circumstances of this case would be sufficient or not, we will not determine, as the record nowhere shows such notes to have been given. It is in evidence that notes were given to J. D. Stone, but no copy is set out nor does their character appear. It does appear, however, that Stone, knowing that an attachment was about to be levied, hurriedly sells these goods to Starkey, who knew but little or nothing about the business —the alleged purchase being made in the afternoon or night of July 26th, and the notes given at that time, while the invoice was made afterwards. No reason is given why the invoice was not made before the sale, but it is apparent that the reason was the fear of Woodruff’s creditors, and the testimony tends to show that there was suf
In Gregory v. Whedon, 8 Neb., 377, it is said: “In •order to constitute a person a bona fide purchaser he must have parted with something that is valuable upon tho faith -of his purchase before he had notice of any prior right or equity;” and in Savage v. Hazard, 11 Id., 327, it is said, “to constitute a bona fide purchase for a valuable consideration, it must be without notice, and with the money actually paid.” In both of these cases the purchasers had given their promissory notes, but the sales were held to be invalid. The rule is well settled that the burden of proving a valuable consideration is upon the purchaser when proof of that fact becomes necessary to his protection against either creditors or subsequent purchasers. 1 Am. Leading Cases (4th Ed.), 53. Battle v. Jones, 2 Ala., 314. Abbott’s Trial Ev., 448-9 and cases cited in notes. This Starkey has failed to do. It is stated in the defendant’s brief that it devolves upon the plaintiff to show that the traflsaetions between Woodruff and Stone, and Stone and Starkey, were fraudulent. It is a fundamental principle that fraud is never presumed— that is, when a sale is alleged to be fraudulent as to creditors it devolves on the party alleging the fraud to prove it. But the proof of fraudulent intent need not extend beyond the-vendor and vendee. The question as to a purchase from a fraudulent vendee is whether or not he acted in good faith. If he did, he is protected. If he did not so purchase, the goods in his hands are still . liable for the debts of the real owner. That is, the goods in the hands of the fraudulent vendee were liable for the vendor’s debts. Therefore, if one purchase with notice of the vendee’s title, or have facts sufficient to put him upon inquiry, he takes merely the title possessed by the vendee. There may, however, be an intent also on the part of such purchaser to defraud or aid in defrauding the creditors of the
Reversed AND beMANDed.