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Summers and Brannin v. Roos & Co.

sion. The stipulation that the vendors should remain in possession, and have the use of the property, would have rendered it void as against creditors.

"But it was a good executory contract, and when the property was actually taken in pursuance of its terms, the sale became complete. The possession accompanied and followed the deed.” Bartelle v. Williams, 1 Pick. 288. The deed also contained a provision that after-acquired property should be subject to its provisions, on a contingency and for certain purposes expressed in it. Speaking in reference to such property, he says: "The same principle applies to the property to be acquired after the date of the deed. It was a good executory contract between the parties for a future sale, by deed, to take effect and become executed upon a contingency. The possession was taken pursuant to the contract, and with the consent of the vendors the sale, as between the parties, was complete."

He then proceeds to declare that the attaching creditors had no right to interfere. This case would be decisive of the one now under consideration against the defendants in error, even if the deed contained an express stipulation that Baggett "should continue to sell the goods embraced in the deed in trust." The doctrine announced in the cases in 1 and 12 Pick. 288 and 451, is clearly applicable to the state of facts existing at the date of the levy of the attachment of defendants in error, the sale having been complete to the trustee before that time. The deed is regular on its face, and if impeachable for fraud, it had to be done by testimony aliunde the deed. What the jury might have found on an issue to that effect this court cannot know. They are precluded from the privilege of determining that question by the first and third instructions given to them at the instance of the defendants in error. The first is in these words: "If the jury believe from the evidence that the deed in trust in question was made with a view of protecting Baggett in any way from his creditors, it is void, and the claimants acquire no right under it, and they should find for the plaintiffs."

The rule announced in this instruction z too broad, and could do nothing less than mislead the jury. The court omitted to state in the instruction the fraudulent intent, which is essential to avoid conveyances of this kind. Baggett had a right to prefer his creditors. Summers & Brannin were his creditors to the extent of a

Summers and Brannin v. Roos & Co.

cash balance due them of $60,000, and it was lawful to secure them for this indebtedness, and for that he was about to create with them, by conveying his property for that purpose; if the conveyance was made for this purpose, and not with the intent "to hinder, delay or defraud" his other creditors, the conveyance is valid, although it was made to protect Baggett's property from other creditors. That being the object and purpose for which assignments are made preferring creditors, any incidental protection the deed in question may have given Baggett from his creditors, until condition broken, certainly would not render it void as to subsequent creditors.

The old common-law rule, holding that a deed fraudulent as to existing creditors is fraudulent as to subsequent creditors, has to be considered in connection with our statute of frauds, which modifies it. It declares that such conveyances shall only be void as against those who are delayed, hindered, in the collection of their debts, etc. This statute has been repeatedly construed to apply only to existing creditors by this court. In the case of Bullett, Miller & Co. et al. v. Taylor & Richardson et al., 34 Miss. 708, the judge, delivering the opinion in that case, says: "If it were now an open question, the language would seem to be too clear to admit of construction. The conveyance is void as to all who are, at the time of its execution, in a situation to be injured by it, but valid as to all others. It operates to transfer the property, but transfers it with the incumbrance of the grantor's debts then existing." This adjudication was made upon the statute in Hutch. Code, 638.

No subject has given rise to a greater number of decisions, nor to a greater variety and conflict of judicial opinions, than the construction of the statute 13 Eliz., of which most of the statutes of frauds of the different states of the Union are substantial copies. The statute in Hutch. Code, 638, adjudicated upon by this court in the case of Bullett, Miller & Co. v. Taylor et al., is nearly a transcript from that of 13 Eliz. The rulings of this court upon this statute, as to the effect of it upon the rights of subsequent creditors, where the deed has been declared void as to existing creditors, have not been uniform.

In the case of Henry v. Fullerton, 13 S. & M. 634, which was a case of a subsequent creditor, the court held, "that, if a subsequent creditor can show actual fraud as to existing creditors, the deed would be void as to such subsequent creditor."

In 14 S. & M. 142, the court, quoting Henry v. Fullerton, the VOL. II.-84

Summers and Brannin v. Roos & Co.

above language, said: "The language is very general, and it is difficult to extract any entirely definite rule. It seems, however, beyond doubt, if the party is insolvent at the time of making the voluntary conveyance, it is void as to subsequent creditors." In the case of Winn v. Barrett, 31 Miss. 657, this rule is modified in this case, the court holding, that "if it do not appear that the debts existed at the time the disposition of the property was made, the transaction cannot, as a general rule, be said to be fraudulent as to creditors," and giving the same construction to the statute as in the case of Bullett, Miller & Co. v. Taylor & Richardson et al. Judge FISHER, delivering the opinion of the court, goes on to say: "It is true that it has been held, in some cases, that where a conveyance by a debtor was fraudulent in its inception, as to his creditors at the time, it will be so treated as to subsequent creditors. But these cases must rest upon one of two principles: the property was either so situated that it enabled the debtor to obtain credit upon the faith of it; or the fraudulent vendee was regarded as trustee under the secret arrangement between the parties, and in virtue of such secret understanding, bound, at least so far as his word or such contract could bind him, to account to the fraudulent vendor; and hence the creditor was allowed to be substituted to what was treated as the substantial interest of his debtor, and subject the property to the pay ment, of his debt."

The statute in Hutch. Code, 638, quoted in the foregoing cases, is literally copied into the Rev. Code, 358, art. 2. But it seems, with a view to settle for the future the construction of our statute of frauds relative to subsequent creditors, in art. 3, p. 359, Rev. Code, the legislature, after quoting the statute from Hutch. Code, further restricts the general rule, and declares: "Nor shall it in any case extend to creditors whose debts were contracted after such fraudulent act, unless made with the intent to defraud them; and though a conveyance or contract be decreed void as to prior creditors, it shall not on that account be void as to subsequent creditors or purchasers."

There was no controversy between the cestuis que trust in the deed under consideration and prior creditors. It was attached on the ground that it was fraudulent as to subsequent creditors. Under the statute of frauds, unless defendants in error could show that the deed was executed by the parties to it, "with the intent" to hinder, delay and defraud them, they had to fail in their attachment on that

Summers and Brannin v. Roos & Co.

ground. The grantor, Baggett, and Summers, one of the cesiuis que trust, who had the deed prepared, testified before the jury that tie deed was made bona fide, and with "no intent to defraud any one." This testimony, taken in connection with all the circumstances at the time of its execution and subsequent thereto, having any legal bearing upon the case, or in any wise tending to show a fraudulent intent on the part of the parties to the same, to defraud the defendants in error, was for the consideration of the jury alone. This instruction, we think, was clearly in conflict with the provisions of art. 3, Rev. Code, above referred to, and unwarranted by the testimony. The second instruction does not announce the law correctly, and is indefinite, and in conflict with the provisions of art. 3, Rev. Code, above quoted. We are, therefore, of the opinion that the second assignment is well taken.

We now come to the consideration of the third assignment of error. It is, that the court erred in refusing the fifteenth and sixteenth instructions asked by plaintiffs in error. The fifteenth instruction is as follows: "That the plaintiffs in execution, A. Ross & Co., are bound to make out their case, and to show by testimony that the certain property levied upon is subject to the attachment; and if they shall believe from the evidence that only a portion of the property is so subject, and that the plaintiffs have failed to show by testimony what specific portion or articles are so subject, then they should find a verdict for the claimant."

It is insisted in behalf of the defendants in error, that this instruction was properly refused, as the rule in claimant cases is, that it is sufficient for the plaintiff in execution or attachment to show that the goods were in the possession of the defendant when levied on; and that creates the presumption that the ownership is with the possession, and that the claimant must then show title, etc. This is a sound rule; but, to make it applicable to the case under consideration, the plaintiffs in attachment or execution had to show that the goods attached were in the possession of Baggett at the time of the levy.

The proof was undisputed, that, on the 16th of March, A. D. 1867, the entire stock of goods levied upon by defendants in error, under their attachments, had been transferred to Hilliard, the trustee, and that he had remained in undisturbed possession of them from that time up to the 20th of March, 1867, the day of the levy.

To do away the effect of this testimony, counsel insist that the

Summers and Brannin v. Roos & Co.

grantor's (Baggett) statement, that Summers & Brannin were to pay him $3,000 to pay balances due Gartman et al., rescinded the contract of delivery to Hilliard.

Summers stated he had transmitted this amount about the 1st of February, 1867, to pay these balances, and explains the subsequent promise to Baggett to pay these balances, by stating that it was contemplated by the parties to sell the stock of goods to one Millsaps. This sale fell through. If it had not fallen through, three thousand dollars' worth of notes of Millsaps were to be transferred for that purpose. This promise does not appear in the written transfer to Hilliard, the trustee. If it depended upon the condition stated by Summers, and was to be paid only in case the sale was made to Millsaps, this transfer could not be affected by the failure of Millsaps to purchase the goods. But, if this sum was to be paid in any event, then Baggett can hold Summers & Brannin liable to pay the $3,000 for the use and benefit of Gartman et al. It is a matter the defendants in error cannot avail themselves of to avoid the transfer to Hilliard, the trustee. It is a contract entirely between Summers & Brannin and Baggett, with which the defendants in error are not in any wise pecuniarily interested. It was purely a question of fact for the consideration of the jury, whether Hilliard was in posses sion of the goods, by virtue of the written transfer of the 16th of March, 1867, from Baggett to him, on the 20th day of March, 1867; and if they believe that possession was complete in Hilliard, it was incumbent upon the plaintiffs in attachment to show what property levied upon was subject to their attachment. For these reasons, we think the proof in the case warranted the instruction, and it should have been given, and it was error to refuse it. The giving or the refusal of the sixteenth instruction, in either event, could not have affected the verdict of the jury. The twelfth instruction given for the claimant is in effect the same as the sixteenth instruction; in the absence of the twelfth, the sixteenth should have been given.

We have arrived at the fourth and last assignment of error, which is: "That the court erred in modifying the sixth instruction asked by plaintiffs in error, and giving the same as modified, and refusing to give the same without modification." The modification complained of is in these words: "If the note it was intended to secure was for debts then due." We think this modification was erroneous, for the reasons given in our consideration and disposition of

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