Haas v. Whittier

California Supreme Court Feb 25, 1893 No. No. 19020Published

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Holding. The court held that the trial court erred in granting a new trial because the jury's special findings were supported by uncontradicted evidence showing no intent to create an unlawful preference under the Insolvent Act. Consequently, the trial court should have entered judgment for the defendants based on the jury's special findings.

Issues

Whether the trial court was justified in granting a new trial contrary to the jury's special findings regarding the intent to create an unlawful preference.
Whether the trial court committed errors of law during the trial that would warrant a new trial.
Whether the jury's special findings were supported by the evidence.

Disposition. reversed

Quotations verified verbatim against the opinion

“The presumption, prima facie, which the law makes from the unusual nature of the transfer is entirely done away with by the testimony of these two uncontradicted witnesses, and the jury w'as right in its special findings.”

“We think that the court below should not have granted a new trial, but should have rendered judgment for the defendants on the special findings”

Synopsis

Insolvency — Preference of Creditor — Fraudulent Intent — Questions of Fact. — The question of the intent of an insolvent debtor to make a fraudulent preference of a creditor, forbidden by the Insolvent Act, is a question of fact, and not of law.

Id. — Transfer out of Usual Course of Business — Presumption — Counter-evidence ■— Bona Fide Intention. — Where the transfer by an insolvent debtor to a creditor is not made in the usual and ordinary mode of business, the transaction is presumed, prima facie, to be a preference, not allowed by section 55 of the Insolvent Act; but such presumption may be overcome by counter-evidence showing that no preference of the creditor over other creditors was intended, but that the insolvent intended bona fide to treat all of his creditors alike.

Id. —Transfer of Goods to Pay Debt — Evidence of Intent — Special Verdict — Hew Trial. —In an action by the assignee of an insolvent debtor to set aside a transfer of goods to a creditor in payment of the debt, where there is no evidence of a fraudulent preference, except that the transfer was not made in the usual course of business, and the uncontradicted evidence of the insolvent and of the agent of the creditor showed that there was no intention to make or secure a preference oves? other creditors, but both parties intended that all the creditors of the insolvent should share alike, the prima facie presumption which the law makes from the unusual nature of the transaction is done away with; and it is error for the trial court to set aside a special verdict of the jury, finding that the transfer was not made with a view to give a fraudulent preference, and that the creditor had no cause to believe that it was made with such view, and to grant a new trial for insufficiency of the evidence to sustain such special findings.

Id.—Special Findings Control General Verdict.—The special findings of the jury against the fraudulent intent of the parties to the transfer will control a general verdict in favor of the assignee of the insolvent debtor, and it is error for the court to refuse to grant a motion of the defendants for judgment in their favor because the general verdict was not supported by the special findings, under section 625 of the Code of Civil Procedure.

Id. — Motives of Creditor, in Receiving Property.—If an insolvent debtor does not transfer his property with the view or intention to give a preference to a particular creditor, it makes no difference what were the motives of the creditor in receiving the property, or what the creditor suspected or believed about the solvency of the debtor.

Id. — Instructions — Omission of Qualification elsewhere Given — Knowledge of Insolvency — Violation of Instructions. ■—Where, taking all of the instructions together, and interpreting them fairly, the jury had the right, if the evidence warranted, to find that the creditor and debtor had no intent to make a preference, in violation of section 55 of the Insolvent Act, they do not violate the instructions of the court because one of the instructions, taken by itself, directs a finding for the plaintiff if the debtor was insolvent, and the creditor knew or had reasonable cause to believe that fact, and obtained the transfer in payment of the claim under such circumstances.

The Court. This is an action brought to recover a sum of money, which the plaintiff, as assignee of an insolvent debtor., Edgar Sessions, claims should be paid him in his representative capacity by the defendants, W. F. Whittier et al., by reason of their having received from the insolvent, and-converted to their own use, certain goods delivered to them in satisfaction of a debt due the defendants by the insolvent.

The proposition upon which the plaintiff based his claim for a recovery is, that the defendants had received the property by a transfer made by the insolvent, with the intention of giving them a preference over his other creditors. The cause was tried before a jury, and they gave a general verdict for the plaintiff, but found “Ho” upon the special issues submitted to them. The special issues were: 1. At the time that Edgar Sessions transferred to Whittier, Fuller & Co. the goods described in the complaint, was he able to pay his debts from his own means as they became due ? 2. Was the transfer of said goods by Sessions to Whittier, Fuller & Co. made in the usual and ordinary course of business of said Sessions ? 3. Did Sessions make said transfer with a. [418]view to give a preference to said Whittier, Fuller & Co.? 4. Did Whittier, Fuller & Co., at the time they received said transfer, have reasonable cause to believe that it was made with a view to prevent Sessions’s property from coming to his assignee in insolvency? 5. Did Whittier, Fuller & Co., at the time of said transfer, have reasonable cause to believe that the transfer was made to prevent said property from being distributed ratably among his creditors ?

The defendants moved the court for a judgment in their favor, because the general verdict was not supported by the special findings under section 625 of the Code of Civil Procedure. The plaintiff made a motion for a new trial, and the court below considered the two motions together, refused that of the defendants, and granted that of the plaintiff, from which rulings this appeal is taken.

The real questions involved in the case are, whether the trial court was justified in believing, upon the evidence and contrary to the view of the jury, that the preference denounced by section 55 of the Insolvent Act had been given, and whether such errors of law had been committed on the trial as warranted a new trial. It would have been useless to have entered judgment for the defendants on the special issues found by the jury, •if the trial court had not considered the evidence sufficient to support the special findings of the jury, or had believed itself to have committed errors of law on the •trial; for immediately following the order for judgment •for defendants, the court would, by granting a new trial, have rendered the judgment inoperative.

Haas v. Whittier

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