Billings v. Billings

California Supreme Court Jan 15, 1852Published

Before: Heydenfeedt

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Holding. The court held that a provision in a deed of assignment granting the assignee power to sell on credit constitutes presumptive, but not conclusive, evidence of fraudulent intent. Because the trial court acting as a jury found against the presumption of fraud, the judgment was affirmed.

Issues

Whether a power to sell on credit in a deed of assignment is conclusive evidence of fraudulent intent.
Whether the court may reverse a judgment where the record does not show the lower court refused to consider presumptive evidence of fraud.

Disposition. Affirmed

Quotations verified verbatim against the opinion

“The power given in the assignment to sell on credit is presumptive evidence of a fraudulent intent to hinder and delay”

“Holding, as we do, that the power given to the assignees to sell on credit is not conclusive, but only presumptive evidence of fraud, it follows that the Court correctly refused to decide that the deed was void on that ground”

Synopsis

Appeal from the Fourth Judicial District.

This was an action to test the validity of certain assignments, for the benefit of creditors; by deed, bearing date Sept. 3d, 1850, between B. Simmons and W. H. Stowell, partners, of the first, part, and the respondents, (defendants in the action,) of the second part. Simmons & Stowell, after reciting their inability to pay their partnership debts, and their desire to make a fair distribution of their property, in consideration of the premises, and of one dollar, granted, bargained, sold, assigned, &c., to the defendants, and their heirs and assigns forever, all the lands, tenements, and hereditaments lying in the State of California, and all the goods, chattels, steamboats, merchandise, debts, choses in action, property, and effects of every description, of the said Simmons & Stowell, more particularly described in the schedule A., thereto annexed, in trust and to the uses following, to wit; that the defendants should take possession of the lands and other property assigned, and sell and dispose of the same, either at public auction, or private sale, for such prices and on such terms, either for cash or on credit, as in their judgment might appear most for the benefit of the parties concerned, and convert the same into money; and should collect the said debts, &c.; and execute all necessary and proper deeds, bills of sale, releases, &c.; and with the proceeds, after paying the expenses of making and carrying into effect the assignment, first, to pay in full, to George Howard, $3000; to Flint, Peabody & Co., $3000; to Wells & Co., $2000; with legal interest from the date of the assignment; said debts being mentioned in schedule B. Secondly, after paying in full said debts in schedule B., then to pay all sums due on deposits made with the firm of Simmons, Hutchinson & Co., as well when said firm was composed of the assignors, and John F. Pope and Titus Hutchinson, as when composed of the assignors alone, (except such deposits as, by ' agreement, were to bear interest;) and all sums due or to become due the owners of the steamer Gold Hunter; said debts—which were set forth in schedule C.—to be paid in full, if the assets proved sufficient, otherwise pro rata. Thirdly, with the residue of the -proceeds, if any, to pay, pro rata, all other partnership debts against said firm of Simmons, Hutchinson & Co., as well while composed of the said former, as the present partners. Lastly, after paying all said debts and demands, to return the surplus, if any, to the assignors, their executors, administrators, or assigns. And for the better execution of said trusts, Simmons & Stowell, by said deed, constituted the said Frederick' Billings their and each of their attorney, irrevocable, with power of substitution and revocation, with full authority to do any and all necessary acts in their names; and covenanted with the defendants to execute, upon request, all such further assignments and deeds as might be necessary to carry into effect the objects of the indenture.

Justice Heydenfeedt delivered the opinion of the Court. In,

this case, it was stipulated by counsel, in open Court, that the Court should decide upon the legal effect of the deed of assignment, aside from any peculiarity in the agreed case, which might prevent us from so doing.

[113]The appellant insists that the deed of assignment bears upon its face certain indicia which are presumptive evidence of an “intent to delay, hinder, or defraud creditors.” It is only in regard to one out of several of those pointed out by counsel, that we assent to the proposition. The power given in the assignment to sell on credit is presumptive evidence of a fraudulent intent to hinder and delay, and for the reasons which the appellant’s counsel have so well argued. Such a power conferred upon an assignee of the debtor’s own selection, may generally be presumed to lead to collusion for the benefit of the debtor. It would certainly enable the assignees to delay the creditors indefinitely, by selling the property upon long credits; and it is no answer to this objection, as insisted by the respondent’s counsel, that a court of equity could control him, because, first, if the power is a valid one, it must be valid to all intents, and being the act of the party entitled to confer it, the court could not interfere to take it away; and secondly, the property being once sold, the Court could not take it away from the innocent purchaser, and the wrong would be irremediable. The case of Barney v. Griffin, 2 Comstock, 365, was a case precisely the same as the one under consideration; and although we are not prepared to go as far as the Court there went, yet we cannot but approve the reasoning of that decision.

Holding this opinion on the point just considered, the next question to be decided is, does the record shew any error which requires us to reverse the judgment ? The 23d section of our Statute of Frauds declares, “ The question of fraudulent intent in all cases arising under the provisions of this act, shall be deemed a question of fact, and not of law.” And section 17 of article 6 of the Constitution says, “Judges shall not charge juries with respect to matters of fact, but may state testimony; and deliver the law.” In construing the section above quoted from the Statute of Frauds, we design to give it the full effect to which it is entitled; and therefore we decide, that although the question of fraudulent intent is made a question of fact in all cases, yet wherever the law declares that certain indicia are conclusive evidence of fraud, a verdict against such conclusive evidence should in all cases be set aside. On the other hand, where the evidence of fraudulent intent is declared by law to be only pre

Billings v. Billings

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