Rogers v. Hall

The opinion of the Court was delivered by

Gibson, C. J.

—Did the effect of Barrett’s acts on the interest of Pomroy depend on the terms of the power of attorney, restricted as they are to the recovery of the assigned debts and the selling or leasing of the land, there would be more than a doubt that the circumstances of his agency in respect to the furniture bought in for Merrill ought not to prejudice the defendant’s title. But Barrett was, if not the projector, certainly the manager of the fraud, and also the artificer of the very title under which the actual defendant claims. Now the least degree of concert or collusion between parties to an illegal transaction makes the act of one' the act of all; and here it is proved that Barrett concocted the conveyance, not in the usual course of a s'crivener mutually called in by the parties, but in the absence of the grantee, without payment of any visible consideration, and in the night when the grantee fled from his creditors. Surely this was enough in the first instance to entitle the proof to go to the jury.

The evidence to show the1 amount realized from the books, was properly rejected. The inference of fraud’arose from the generality of the assignment and the absence of circumstances explanatory of the consideration ; and not from the actual or the ostensible value of the property transferred, which could not affect either of these; it being just as necessary to show consideration for a small amount as a great one. Though the proof had been admitted, the inference from the generality of the assignment and the.concealment of the consideration would have remained; consequently the proof was irrelevant.

A point raised before the jury, and made a subject of exception here, is, in substance, that fraud must be proved and not presumed ; with which the direction of the judge accorded, subject to this qualification, however, that it may be proved, like any thing else, by presumptive evidence. Surely there was no error in that.

The next position assumed by the defendant is certainly true in the abstract; for a failing debtor may prefer one creditor to another, and to that end assign his property or turn it into cash. It is true, too, that the judge refused to instruct in accordance with the prayer; and had there been evidence to raise the point, I am unable to see how the judgment, on the direction given, could have been supported. But the assignment contains no trust, for preferred creditors; and the great defect, as to the assignee himself is, that he is not shown to have been a creditor at all. And this leads to the subject of the next assignment of error.

Though in the absence of proof to the contrary the presumption is in favour of the fairness of a transaction, yet flight and an absolute general assignment are in themselves circumstances demonstrative of fraud ; and though not conclusive, they undoubtedly impose on the assignee the necessity of elucidation. He is the most cognizant of the transaction and best able to explain it; and why should the business of explanation be laid on the creditors placed by him in the dark though entitled to light1? The question is on the existence of a valuable consideration ; and it would be against a fundamental rule of evidence to burthen them with the necessity of producing negative proof. The policy of handling these transactions with little attention to tenderness, is obvious and uncompromising. They are ulcers of frequent occurrence in practice, which require to be thoroughly probed, and, if necessary, laid open to the bone ; and on him be the consequences, who withholds the means of doing so.

But the defendant claims to hold discharged of the fraud, if such there were, by having, as he alleges, purchased without notice of it. A decision of the question of notice is uncalled for by the circumstances, and we give none. There was neither proof of valuable consideration nor the semblance of it; and nothing is clearer than that a plea of purchase for value, must be sustained by other evidence than the conveyance. Even the receipt of the debtor is not proof against his creditor claiming paramount to the debtor’s grantee, inasmuch as his fraudulent conveyance is' no conveyance at all against the interest intended to be defrauded. His receipt or other acknowledgement of payment, therefore, is the act of a grantor done subsequently to a title derived from him, which, consequently, may not be prejudiced by it. Now the defendant produced nothing but the conveyance, with whatever collateral evidences of payment may have been embodied in it or appended to it; and these fell far short of proof of actual payment; for, giving a security for the purchase money, which in practice is often the consideration for a receipt at the foot of the conveyance, is not enough to entitle him to the character of a purchaser for valuable consideration, and the court properly rejected the prayer for protection on that ground.

Judgment affirmed.