An assignment of error, based upon the exclusion by the trial
court of an answer given in the deposition of a witness to a
particular question, will be disregarded by this Court if the
answer or the full substance of it is not set forth in the record
in an appropriate form for examination.
Page 151 U. S. 608
In an action brought in South Dakota by the assignee of the
stock of goods of an insolvent trader (who had taken the stock in
satisfaction of an alleged debt due him from the insolvent) against
a sheriff who had seized them on a writ of attachment at the suit
of a creditor of the insolvent, the defense being set up that the
transfer to the plaintiff was fraudulent and in violation of the
statutes of that state, it is competent for defendant to put in
evidence a confidential business statement by the insolvent to a
commercial agency concealing the alleged liability to the
plaintiff.
The statutes of that state, strictly construed, invalidate any
transfer of property, made with the intent on the part of the owner
to delay or defraud creditors, even when the grantee purchased in
good faith, and when liberally construed, will not permit the
grantee, although taking the property in part in satisfaction of
his own debt, to enjoy it to the exclusion of other creditors if
the sale was made with intent to delay or defraud other creditors
and if he had at the time either actual notice of such intent or
knowledge of circumstances that were sufficient to put a prudent
person upon an inquiry that would have disclosed its existence.
Such a transfer must be accompanied by an open and visible change
of possession, without which it will be void as to creditors.
The assignor and the assignee to the transfer being brothers,
the court may rightfully instruct the jury that this relation makes
it necessary to carefully scrutinize the facts, but that their
determination must depend upon whether the transaction was honest
and
bona fide.
This action was brought by the plaintiff in error in one of the
courts of the Territory of Dakota to recover damages for the
alleged unlawful taking by the defendant, Alterton, of a certain
stock of merchandise in a storehouse that had been occupied by
Louis S. Shauer in the City of Mitchell in that territory. The
defendant justified the taking under attachments in favor of
creditors of Louis S. Shauer, which came to his hands as sheriff of
the county. There was a verdict in favor of the defendant and, a
new trial having been denied, judgment was entered in his favor.
That judgment was affirmed by the supreme court of the territory,
and the writ of error in this case was directed to the Supreme
Court of the State of South Dakota, as the successor of the supreme
court of the Territory of Dakota, by virtue of the Act of February
22, 1889, c. 180, § 22, 25 Stat. 676, 683.
The bill of exceptions shows that there was evidence tending to
show the following facts:
In September, 1885, Louis S. Shauer, owner of the
merchandise
Page 151 U. S. 609
attached, was indebted to his brother, Gustave G. Shauer, a
druggist of Chicago, in the sum of $8,000 and more, for moneys
loaned and advanced. While Louis was in Chicago, about September 1,
1885, for the purpose of making fall purchases, Gustave informed
him of his intention to buy another drug store, and that he would
need the sum Louis owed him. The latter expressed his expectation
of being able soon to pay one-half of the amount due from him, and
after returning to Mitchell, remitted a smaller sum than his
brother expected. Gustave, having written for more and receiving
only $200, went to Mitchell, arriving there on Sunday, December 13,
1885. From a conversation with Louis during the evening after his
arrival at Mitchell, Gustave concluded that Louis was financially
embarrassed, and owed more than he could pay. The following morning
he urged his brother to secure him by mortgage on his stock. Louis
at first consented to do this, but at a later hour of the same day
he declined to give a mortgage. Gustave then proposed that Louis
sell him goods to the amount of his debt. This Louis refused to do
unless Gustave would take the entire stock at fair market prices.
After consultation, it was agreed that Gustave should take Louis'
stock at 85 cents on the dollar, invoiced at wholesale prices, and,
after deducting Louis' debt to him of $6,788, pay $2,100 in cash
and give his notes for the balance. They commenced that afternoon
the taking of an inventory, and were so engaged for a day and a
half. The inventory was taken publicly, the storeroom being open
while the work was progressing. About 10 or 11 o'clock in the
forenoon of December 16, 1885, Louis made a bill of sale to Gustave
embracing the goods here in controversy. After its execution, the
parties proceeded to the store in which the goods were contained,
when Gustave delivered to Louis his check for $2,100 and his two
notes of $1,247 each, surrendering the note he held against his
brother. Louis delivered to Gustave the bill of sale and the keys
of the store. The transfer was completed about noon of that
day.
Immediately after the transfer, Gustave opened an account with
the First National Bank of Mitchell and went with
Page 151 U. S. 610
Louis to an insurance office, where the insurance carried by the
latter on the stock was assigned to Gustave. They then went to
dinner. That afternoon they caused three other policies of
insurance to be changed from Louis to Gustave, after which the
latter returned alone to the store and directed Louis' clerk to go
to dinner. Having returned to the store and being informed by
Gustave of his purchase of the stock, the clerk entered the service
of the latter. By direction of Gustave, he changed the "show" in
front of the store. During the most of that afternoon, Gustave
remained in the storeroom and waited personally upon customers. He
prepared, and left for publication at the office of the Republican
and Mail, newspapers published at Mitchell, notices announcing the
transfer from Louis to himself and asking for the patronage of the
public. These notices appeared in the next issue of each of those
newspapers. He also ordered letterheads to be printed, and a sign
for the store with his name painted on it. He filed the bill of
sale for record in the office of the register of deeds. During the
afternoon of the day of the transfer, Louis, on one occasion at the
request of Gustave, came to the store to assist in making the sale
of a trunk with the price of which Gustave was not familiar.
Louis applied the check of $2,100 and the two notes of $1,247
each in payment of demands held against him by several of his
relatives.
The goods in controversy were seized by the sheriff under the
attachments about ten o'clock in the evening of December 16, 1885.
Louis was present in the store at the time.
The bill of exceptions shows that the plaintiff read in evidence
the deposition of H. H. Nash, cashier of the Chicago National Bank,
relating to three checks of $650, $270.87, and $2,100,
respectively, which were in evidence in the case as exhibits and
showed upon their faces that they had been drawn by G. G. Shauer
upon the Chicago National Bank in favor of Louis S. Shauer. The
first two checks named, as alleged by the plaintiff, tended to show
the payment of money by the plaintiff to his brother Louis, making
a part of the indebtedness in question, and the third check of
$2,100 was
Page 151 U. S. 611
the check the plaintiff claims to have passed to Louis in part
consideration of the alleged transfer. On the objection of
defendant, the court refused, upon the ground of its being
incompetent, to allow the plaintiff to read the answer of the
deponent in response to the following question: "You may state
whether or not that check has all the appearance of having passed
through the bank in the ordinary course of business." The objection
to this question was sustained upon the ground that it appeared in
evidence that the check had passed through other banks than that of
which witness was cashier, and it did not appear that the witness
was familiar with the course of business of such other banks or
their stamp or endorsement thereon, so as to permit him to answer
this general question.
To the refusal of the court to allow the answer to be read, the
plaintiff duly excepted.
The plaintiff further offered to read in evidence other parts of
the deposition of Nash, showing what the marks and endorsements on
the back of each of the checks indicated, how such marks were made,
and by whom. The court refused to allow those parts of the
deposition to be read, and to this refusal the plaintiff duly
excepted. The objection to this offer was sustained upon the same
ground as that last stated.
It appeared that the deposition was taken in Chicago at the
taking of which both parties appeared by counsel, and that Nash was
cross-examined at length by counsel for defendant as to his
familiarity with the business of the Chicago National Bank, of
which he was cashier.
The defendant was allowed, under objection by plaintiff, to
which ruling the plaintiff duly excepted, to read in evidence a
confidential business statement made by Louis in January, 1885, to
Bradstreet's Commercial Agency at Sioux City, Iowa. This statement,
the bill of exceptions states, concealed the alleged indebtedness
of Louis to his brother, the plaintiff, which existed at that time.
It was not shown that this statement was brought to the knowledge
of the plaintiff nor to any of the creditors of Louis. All of the
indebtedness against Louis
Page 151 U. S. 612
upon which defendant relies "was created at and subsequent to
September, 1885."
Neither party asked a peremptory instruction to find in his
behalf. The plaintiff asked ten instructions, of which only three
were given, the plaintiff excepting to the refusal of the court to
give each of the others. Six instructions were given at the
instance of the defendant, to the giving of each of which the
plaintiff excepted. In addition, the court charged the jury, the
plaintiff excepting to six different parts of the charge.
Page 151 U. S. 615
MR. JUSTICE HARLAN, after stating the facts as above reported,
delivered the opinion of the Court.
Page 151 U. S. 616
1. The refusal of the court to allow the plaintiff to read the
answer of the witness Nash to the question, "You may state whether
or not that check has all the appearance of having passed through
the bank in the ordinary course of business," cannot be assigned as
error. The bill of exceptions does not show what answer was made to
that question in the deposition of the witness. It does not even
state the facts the answer tended to establish. We cannot,
therefore, say that the exclusion of the answer was prejudicial to
the plaintiff. For aught that appears in the record, the witness
may have made an answer that was injurious to the plaintiff, or one
that was of no value to either party.
In
Packet Company v.
Clough, 20 Wall. 528,
87 U. S. 542,
one of the assignments of error was the rejection of a deposition.
In respect to that assignment, the Court said:
"It is sufficient to say that we have not before us either the
deposition or any statement of what it tended to prove. We cannot
know, therefore, that it was of any importance, or that, if it had
been admitted, it could have had any influence upon the verdict. A
party who complains of the rejection of evidence must show that he
was injured by the rejection. His bill of exceptions must make it
appear that if it had been admitted, it might have led the jury to
a different verdict. This must be understood as the practice in
this Court, and such is the requirement of our twenty-first rule.
By that rule, it is ordered that when the error assigned is to the
admission or rejection of evidence, the specification shall quote
the full substance of the evidence offered, or copy the offer as
stated in the bill of exceptions. This is to enable the court to
see whether the evidence offered was material, for it would be idle
to reverse a judgment for the admission or rejection of evidence
that could have had no effect upon the verdict."
At the date of the trial of that cause in the court of original
jurisdiction, it was provided, by Rule 21 of this Court that
"when the error alleged is to the admission or rejection of
evidence, the specification shall quote the full substance of the
evidence offered or copy the offer as stated in the bill of
exceptions. Any alleged error not in accordance with these rules
will be disregarded."
11
Page 151 U. S. 617
Wall. ix. Subsequently the rule was modified so as to substitute
for the words above quoted the following: "When the error alleged
is to the admission or rejection of evidence, the specification
shall quote the full substance of the evidence admitted or
rejected." 14 Wall. xii. This change of phraseology did not affect
the substance of the rule.
The principle announced in
Packet Company v. Clough was
reaffirmed in
Railroad Co. v.
Smith, 21 Wall. 261, and
Thompson v. First Nat.
Bank, 111 U. S. 529,
111 U. S.
535-536. The rule is not the less applicable in the
present case, because the trial court excluded the answer to the
question upon the particular ground stated in the bill of
exceptions. It may therefore be regarded as settled that an
assignment of error based upon the exclusion by the trial court of
an answer given in the deposition of a witness to a particular
question will be disregarded by this Court if the answer, or the
full substance of it, is not set forth in the record in appropriate
form for examination.
Nor did the court err in excluding those parts of Nash's
deposition showing "what the marks and endorsements on the back of
each of the checks indicated, how such marks were made, and by
whom." The checks themselves were in evidence, and if, as the bill
of exceptions states, the witness did not appear to be familiar
with the course of business of the banks through which the checks
passed, so as to entitle him to speak upon the subject, the
exclusion of his answers relating to the subject referred to was
not error.
2. The court did not err in allowing the defendant to read in
evidence the confidential business statement made by Louis S.
Shauer to Bradstreet's Commercial Agency at Sioux City in January,
1885. That statement, the bill of exception recites, concealed the
alleged liability of Louis to his brother then existing. Why should
such concealment have been made? The answer to that question has
some, though perhaps very slight, bearing upon the inquiry whether
Louis was in fact indebted to his brother to the full extent
claimed by the latter.
3. By the statutes of Dakota it is provided that
"a debtor may pay one creditor in preference to another, or may
give to one creditor security for the payment of his demand in
Page 151 U. S. 618
preference to another;"
also that
"every transfer of property or charge thereon made, every
obligation incurred, and every judicial proceeding taken with
intent to delay or defraud any creditor or other person of his
demands is void against all creditors of the debtor and their
successors in interest, and against any person upon whom the estate
of the debtor devolves in trust for the benefit of others than the
debtor;"
further, that
"every transfer of personal property other than a thing in
action, or a ship or cargo at sea or in a foreign port, and every
lien thereon other than a mortgage, when allowed by law, and a
contract of bottomry or respondentia, is conclusively presumed, if
made by a person having at the time the possession or control of
the property and not accompanied by an immediate delivery and
followed by an actual and continued change of possession of the
things transferred, to be fraudulent, and therefore void against
those who are his creditors while he remains in possession, and the
successors in interest of such creditors, and against any person on
whom his estate devolves in trust for the benefit of others than
himself, and against purchasers or encumbrances in good faith
subsequent to the transfer."
Civil Code, §§ 2021, 2023, 2024; Compiled Laws of Territory of
Dakota, §§ 4654, 4656, 4657.
Other provisions of the statute are to the effect that "actual
notice consists in express information of a fact," that
"constructive notice is notice imputed to a person not having
actual notice," and that
"every person who has actual notice of circumstances sufficient
to put a prudent man upon inquiry as to a particular fact and who
omits to make such inquiry with reasonable diligence, is deemed to
have constructive notice of the fact itself."
Civil Code, §§ 2107-2109; Compiled Laws of Territory of Dakota,
§§ 4741-4743.
In view of these statutory provisions and of the facts which the
evidence tended to establish, two principal questions were
considered by the court in its charge to the jury: first, whether
the transfer of the merchandise in question was made with the
intent to delay or defraud the creditors of Louis S. Shauer;
second, whether the transfer to his brother was accompanied by such
immediate delivery of the merchandise, and followed
Page 151 U. S. 619
by such actual and continued change of possession, as the
statute required.
Upon the first of these questions, the court said generally to
the jury that an intent upon the part of the debtor to delay his
creditors in the collection of their debts was as much within the
statute as if the intent had been to cheat or defraud; that while a
debtor in failing circumstances was at liberty, acting in good
faith and openly, to prefer some creditors over others, he could
not, as against those not paid, reserve to himself a secret trust
in any transfer; that a creditor thus favored by the debtor will
not be permitted to enjoy the preference given him if he seeks by
the transaction to cover or protect the remainder of the debtor's
property so that it could not be applied to the payment of his
honest debts, and that if a creditor seeks to appropriate the
debtor's property for a debt any material part of which was
knowingly fictitious, the whole transaction would be held as
tainted with fraud and void as to other creditors.
Applying these principles to the facts of this case, the court
said:
"Therefore, should you find from the evidence that Louis S.
Shauer was fairly and honestly indebted to his brother, Gustave
Shauer, in the full amount claimed, which I believe is about $6,700
-- you will remember the exact amount -- and that with the honest
intention of securing such indebtedness, he purchased the property
in question without notice or knowledge of any fraudulent intent on
the part of Louis S. Shauer to delay or defraud his creditors, and
without any intent on his own part to secure any interest in said
property, present or future, to his brother Louis, and without any
intent to delay or defraud the creditors of Louis S. Shauer, then
he is entitled to recover whatever may have been the intent of
Louis Shauer himself, for the intent of Louis Shauer can affect the
plaintiff only in the case that he knew, had notice, or as a
prudent man had knowledge sufficient, from the circumstances, to
put him upon inquiry as to his brother's fraudulent intent. On the
other hand, should you find that the alleged indebtedness from
Louis to Gustave Shauer, and which forms a part of the
consideration of the sale, was knowingly false
Page 151 U. S. 620
and fictitious in whole or in a material part, or should you
find that the balance of the consideration money or price was paid
by Louis to Gustave Shauer with the intent to place the same out of
and beyond the reach of the creditors of Louis Shauer, or should
you find that Gustave Shauer, in making this purchase, had any
intent not only to secure his own indebtedness, but also the
further intent to hinder and delay the creditors of Louis Shauer,
or any intent to so dispose of the remainder of the property, after
the satisfaction of his own debt, either that it would be out of
the reach of the other creditors or that it would inure, in the
future, to the use and benefit of Louis Shauer, then, and in either
event, the transaction would be tainted with fraud, and the
plaintiff cannot recover."
The jury was further instructed at the instance of the plaintiff
that if they found that Louis Shauer made a sale of these goods to
his brother, it would be presumed, in absence of proof to the
contrary, that such sale was made in good faith and with honest
intentions; that if the evidence was equally balanced, the
defendant must fail in respect to the fraud alleged by him, and
that if the plaintiff knew of the insolvency of his brother, and
that the payment of his debt would deprive other creditors of their
claims, "this mere knowledge on his part would not make the sale in
question fraudulent."
The plaintiff contends that the instructions of the court upon
the question of intent were based upon an erroneous interpretation
of the statute in that they made knowledge that was sufficient,
under all the circumstances, to put him, as a prudent man, upon
inquiry as to his brother's fraudulent intent equivalent to actual
notice or knowledge of such an intent. That the court held this
view is made clear by one of the instructions given to the jury at
the request of the defendant, in which it was said that "actual
knowledge by the purchaser of any fraudulent intent on the part of
the seller is not essential to render a sale void," and that
"if the facts brought to the attention of Gustave G. Shauer were
such as to awaken suspicion, and lead a man of ordinary prudence to
make inquiry,
Page 151 U. S. 621
and he fails to make such inquiry, then he is chargeable with
notice of fraudulent intent and with participation in the fraud,
and it will be your duty to find for the defendant."
It is admitted that if at the time of his alleged purchase, the
plaintiff had actual notice that his brother intended, by the sale,
to delay or defraud his creditors, the sale would have been void
against creditors. But the plaintiff denies that anything short of
actual notice or knowledge of such fraudulent intent will suffice,
under the statute, to invalidate his purchase. The statute of
Dakota, strictly interpreted, would seem to invalidate any transfer
of property made with the intent upon the part of the owner to
delay or defraud creditors, even when the transferee purchased in
good faith. But it was not thus interpreted by the court below. It
was liberally construed so as to protect
bona fide
purchasers for value. Assuming for the purpose of this case that
this interpretation was correct, we are of opinion that while the
plaintiff was not bound to act upon mere suspicion as to the intent
with which his brother made the sale in question, if he had
knowledge or actual notice of circumstances sufficient to put him,
as a prudent man, upon inquiry as to whether his brother intended
to delay or defraud his creditors, and he omitted to make such
inquiry with reasonable diligence, he should have been deemed to
have notice of such fact, and therefore such notice as would
invalidate the sale to him, if such sale was in fact made with the
intent upon the part of the vendor to delay or defraud other
creditors. Referring to the statute of Dakota declaring a
conveyance of real property, other than a lease for a term not
exceeding one year, void as against any subsequent purchaser or
encumbrancer (including an assignee of a mortgage, lease, or other
conditional estate, of the same property or any part thereof) in
good faith and for a valuable consideration whose conveyance is
first duly recorded, the Supreme Court of Dakota, in
Gress v.
Evans, 1 Dak. 387, 399, said:
"Actual notice of a prior unrecorded conveyance, or of any
title, legal or equitable, to the premises, or knowledge and notice
of any facts which should put a prudent man upon inquiry, impeaches
the good faith of the subsequent purchaser. There should be
Page 151 U. S. 622
proof of actual notice of prior title or prior equities, or
circumstances tending to prove such prior rights, which affect the
conscience of the subsequent purchaser. Actual notice, of itself,
impeaches the subsequent conveyance. Proof of circumstances short
of actual notice which should put a prudent man upon inquiry,
authorizes the court or jury to infer and find actual notice; or,
to express it exactly, good faith consists in an honest intention
to abstain from taking any unconscientious advantage of another,
even through the forms or technicalities of law, together with an
absence of all information or belief of facts which would render
the transaction unconscientious, and notice is either actual or
constructive."
A less stringent rule cannot be applied to the Dakota statute
relating to transfers of property with intent to delay or defraud
creditors. The plaintiff had the right, by a purchase of his
brother's stock of merchandise, to obtain payment of his claims in
preference to the claims of other creditors. But the statute of
Dakota, however liberally construed in favor of purchasers from a
fraudulent debtor, will not permit him to enjoy, to the exclusion
of other creditors, the fruits of his purchase, when the sale was
made with the intent to delay or defraud other creditors, if he had
at the time actual notice of such intent or knowledge of such
circumstances or facts as were sufficient to put a prudent person
upon an inquiry that would have disclosed the existence of such
intent upon the part of the vendor. The plaintiff could not
properly have claimed a more favorable interpretation of the Dakota
statute than was given to it by the court below. A statute that
declares every transfer of property made with intent to delay or
defraud any creditor of his demands void against all creditors of
the debtor would be wholly defeated in its operation if the rights
of the transferee were not subject to the rule that
"whatever is notice enough to excite attention and put the party
on his guard, and call for inquiry, is notice of everything to
which such inquiry might have led."
Wood v. Carpenter, 101 U. S. 135,
101 U. S. 141;
Kennedy v. Green, 3 Myl. & K. 722.
4. Having disposed of the question as to the intent with which
the sale in question was made, the court referred to the
Page 151 U. S. 623
provision of the statute declaring the transfer of personal
property -- the vendor having at the time possession or control
thereof -- to be conclusively fraudulent and void as against
creditors unless such transfer is accompanied by an immediate
delivery and followed by an actual and continued change of
possession. The court said to the jury that the statute means, as
declared by the supreme court of the territory in
Grady v.
Baker, 3 Dak. 296, 299, that the sale shall be open and
public, that the world may be apprised of the change of ownership,
and that the change of possession must be actual and continued, and
not subject to some secret trust between the buyer and seller.
"Some of the cases," the court below observed,
"say that the change must be of that character that customers
and those accustomed to frequent the premises may be at once
advised of the change of possession by the changed appearance of
the property or its change of custody. And this is true whatever
may be the good intention or
bona fides of the
transaction. Even the law will not tolerate such transfers as
against creditors. The change of possession must be open and
visible, and, if not, as against creditors without knowledge of the
transfer it will be void, though made for a valuable consideration,
in good faith, and without any actual intent to defraud. In such
case, the law conclusively presumes a fraudulent intent, and the
party to such sale will not be heard to prove the contrary."
In addition to what appears in the charge, the court, at the
instance of the defendant, instructed the jury that a change of the
property in controversy in this case must not have been merely
nominal and momentary, but real, actual, and open, such as could be
publicly known, and that if the property was permitted to remain in
the possession of Louis S. Shauer, then the transfer was fraudulent
in law as to his creditors, notwithstanding the sale may have been
made to his brother in good faith and for a valuable
consideration.
The specific objection made by the plaintiff to these
instructions is that they stated an arbitrary rule -- namely, that
the change in possession must be accompanied by such outward,
visible signs as would apprise the world of the change, and
Page 151 U. S. 624
made no reference to the time within which such signs should be
given, or to the nature of the property transferred, or to the
circumstances attending the transaction. The court, it is said,
should have qualified the rule as indicated in the instructions
asked by him. We cannot sustain this position. The instructions
asked by the plaintiff on this point did not substantially differ
from those given by the court, except they were more elaborate and
referred more in detail to the facts. The court told the jury that
the statute required not only an immediate change of possession,
but one so open that the public would be apprised of it. While the
court was at liberty to recall to the minds of jurors all the facts
and circumstances bearing upon this issue, we cannot say that it
erred in not doing so, or that it erred in leaving to the jury to
determine whether, under all the evidence, there was such immediate
delivery and such actual change of possession of the property in
controversy as was necessary, under the statute as explained, to
make the transfer valid against creditors.
In this connection, it is appropriate to say that the
interpretation placed by the court below on the Dakota statute
relating to change of possession accords with the decisions of the
Supreme Court of California in respect to a similar statute. In
Stevens v. Irwin, 15 Cal. 507, it was said:
"A reasonable construction must be given to this language, in
analogy to the doctrines of the courts holding the general
principles transcribed into the statute. The delivery must be made
of the property. The vendee must take the actual possession. That
possession must be open and unequivocal, carrying with it the usual
marks and indications of ownership by the vendee. It must be such
as to give evidence to the world of the claims of the new owner. He
must, in other words, be in the usual relation to the property
which owners of goods occupy to their property. This possession not
taken to be surrendered back again; not formal, but
substantial."
See also Lay v. Neville, 25 Cal. 545, 553;
Woods v.
Bugbey, 29 Cal. 466;
Parks v. Barney, 55 Cal. 239.
There are many other cases to the same effect.
5. Exception was taken to what the court said to the jury
Page 151 U. S. 625
touching the relation of the plaintiff and the vendor of the
goods. After observing that the law scrutinizes carefully all
transfers of the failing debtor and zealously guards the rights of
creditors against fraudulent dispositions of the debtor's property,
the court said that it was for that reason that transfers to one's
wife or to members of his family are carefully scrutinized,
experience having taught that such conveyances are more frequently
fraudulent than transactions between strangers or those not
intimately connected or acquainted. It is said that this language
authorized the jury to infer that the mere fact of the parties'
being related would cause the good faith of the transaction to be
suspected. But this criticism of the charge is met by the next
succeeding sentence in these words:
"Yet experience also teaches that honest and
bona fide
sales and transfers of property are made, and that too much stress,
or even importance, should not be given to such a fact alone."
It is also met by the fact that the court, at the instance of
the plaintiff, instructed the jury that if these goods were sold by
Louis to Gustave, the law presumed that the sale was made in good
faith and with honest intentions; that in the absence of proof to
the contrary, the validity of the sale could not be questioned;
that if the evidence was equally balanced upon that point, the
defendant must fail, and that mere knowledge on the part of Gustave
that his purchase would deprive other creditors of their debts
would not make the sale fraudulent. Again at the instance of the
plaintiff, the court said:
"The mere sale by a party of his stock of goods to a relative is
not a badge of fraud. If such sales were fraudulent in themselves,
it would be impossible for family connections to aid each other in
case of financial embarrassment without danger of being placed in a
false position and losing the entire sum loaned. Under this rule,
if Louis S. Shauer owed his brother, Gustave G. Shauer, a just
debt, he had the same right to transfer his property to his brother
in payment of this debt as he would have had to transfer the same
property to any one of these attaching creditors in payment of his
claim."
The jury could not have been induced, by anything said by the
court, to give undue weight to the fact that the transaction
Page 151 U. S. 626
in question was between brothers. If that fact induced them,
under the instructions (as it might properly have done) to
carefully scrutinize the evidence, it must be assumed that they
performed their duty without forgetting the injunction that the law
presumed the sale, despite the fact of the near relationship of the
parties, to have been made in good faith if accompanied by
immediate delivery and followed by actual, continued change of
possession.
We are of opinion that it was not error for the jury to be told
that the relations of the parties to the transaction made it
necessary to carefully scrutinize the facts, but that their
determination must at last depend upon the inquiry whether the
transaction was honest and
bona fide.
We perceive no ground to doubt that the case was well tried. The
jury were fully and properly instructed in respect to every aspect
of the case, and we have no authority to set aside their verdict,
even if it does not appear to be justified by the evidence.
Railroad Co. v. Fraloff, 100 U. S. 24,
100 U. S. 31;
Lincoln v. Power, ante, 151 U. S. 436.
Judgment affirmed.
