Gray v. Trent

<p>Error, No. 128, Oct. T. 1888, to C. P. No. 2 Allegheny Co., to review a, judgment on a verdict in favor of the plaintiff in an action of trespass vi et armis de bonis asportatis, by Charles H. Trent against Joseph H. Gray, Sheriff of Allegheny Co., at April T. 1889, No 468.</p> <p>The facts of the case are stated below, in the charge of the court, by Ewing, J.</p> <p>At the trial, C.' H. Trent, plaintiff below, being upon the stand as a witness on his own behalf, and having testified in chief, under objection, that he had a contract for the delivery of cigars, and was prevented from making the delivery by the levy, was asked by plaintiff’s counsel the following question:</p> <p>“ Q. Had you any other contract with any other person ?</p> <p>“ A. I had in this way. I went around all the wholesale houses about once a week, and if I failed in getting around to the different parties that I sold to, they would get their goods elsewhere. I sold ' that way to Fullerton & Son, on Liberty street, and others.</p> <p>“ Q. You failed to go around because your factory was closed ? ” Objected to by defendant’s counsel as incompetent and irrelevant.</p> <p>By the Court: — “ The plaintiffs have a right to show the situation of the business and the character of it, and how it was interrupted, and if any loss was incurred thereby.”</p> <p>Objection overruled, and exception. [13]</p> <p>The plaintiff was also asked this question :</p> <p>“ Q. Did you not know at that time that Trent Brothers had obligations out; that they owed the plaintiff, Mr. Krause? ”</p> <p>Objected to by plaintiff as not cross-examination.</p> <p>By the Court: — “ There is no question about the right of defendants to put this and kindred questions to the witness, but it would be more orderly, however, as it is objected to on part of plaintiff, to put this witness on the stand and cross-examine him fully.”</p> <p>Objection sustained. Exception. [14]</p> <p>The plaintiff, being on the stand as a witness on his own behalf, was asked by his counsel:</p> <p>“ Q. He [Krause] wanted you to sell a watch for him? ” Objected to as incompetent and not rebuttal. Objection overruled. Exception. [15]</p> <p>The charge of the court was as follows :</p> <p>“ Charles H. Trent has brought suit against Joseph H. Gray, who was formerly sheriff of this county, to recover damages for the alleged wrongful taking of his goods — a tobacco factory in Allegheny city, [it seems that on Feb. 12,1887, an execution was placed in the hands of the sheriff against D. B. Trent and Trent Bros., not naming anybody as constituting Trent Bros., and, on that execution, the sheriff was not only entitled to, but was bound to, levy on the property of the defendants wherever he could find it in the county, and, if hq did nothing more than that, no recovery could be had in this action; but an execution against Dr B. Trent did not justify him in levying upon the property of any other person than the defendants named in the execution;] [6] Charles H. Trent says that the goods levied on, viz., cigars, tobacco, machinery, etc., were his, and did not belong to the defendants in the execution, and it seems that the sheriff was formally notified on the same day — Feb. 12 — that Charles H. Trent claimed these goods as his. There was nothing further done than making the levy until the 18th, when a watchman was put in possession and the goods were finally sold on the 1st of March and possession retained until the 3d of March.</p> <p>[“ Now, if those goods were the goods of Charles H. Trent, bought by him and in his possession, the sheriff is liable, and if they were the goods of the defendant in the execution and if the alleged sale in this case was made for the purpose of hindering, delaying and defrauding creditors, the sheriff is not liable.] [7] The testimony that seems to be uncontradicted is that D. B. Trent and W. O. Trent had been in partnership, carrying on a tobacco factory at this place, from some time in 1885 probably. The plaintiff in the execution which was put in the hands of the sheriff, Mr. Krause, had had dealings with them; loaned them money; exchanged checks with them, and, by his own testimony, knew who the firm were. They were carrying on business as Trent Bros., and had their factory license in that name. Some time in 1886, W. O. Trent left the firm and the business; the business was carried on there still, and the sign unchanged, under the name of Trent Bros., up at least until Feb. x 1, 1887. [It is alleged, and we do not think there is any positive testimony of witnesses to contradict it, that these goods were in fact the goods of D. B. Trent. The plaintiff claims that, at that date, they were transferred to him; that he bought and gave a proper consideration for them, and that this was a sufficient change of possession.] [8]</p> <p>[“ I may say, in explanation of what I said in answer to points of defendant, and what I say now, if Charles H. Trent had been in actual partnership with his brother, D. B. Trent, and this alleged transfer made and the same goods levied on for a firm debt, I think the plaintiff could not recover — thaft they were not entitled to do that; but I see no evidence here that would justify the jury in finding, contrary to the sworn absolute testimony of the parties, that Charles H. Trent was anything else than an employee, as they state.] [9] A party may be liable to another as a partner when he is not in fact a partner, that is, he may be held. If he has held himself out to the public as a partner, got credit upon that holding out, he is liable. But when a party has sufficient to put him on his guard ; when he actually knows who the partners are, or has grounds upon which he should have known, by some ordinary acts, he cannotbe held. [It is very evident from Mr. Krause’s own testimony that he knew who were the partners that composed Trent Bros, originally and up to the time that W. O. Trent went out he had pretty close dealings with them. He knew that one had gone out and it was his duty to inquire if another went in, and there is no evidence that would hold Charles H. Trent as a partner in this case on the ground that he held himself out to Mr. Krause as a partner; for that part of it, that is out of the case for your consideration.] [io]</p> <p>“ Now, as between vendor and vendee, it is sufficient, to make a good and valid sale, if there has been a fair consideration passed; or, even if it is not a full consideration, if there has been a genuine agreement made and possession delivered, that is a consummation of the sale, as between the vendor and the vendee. But there are cases where it is not good as against creditors of • the vendor. The policy of the law is to prevent fraudulent transfers to hinder and delay creditors, and if a sale be made by a man in debt, for the purpose of hindering, delaying and defrauding his creditors, that is, to get his property out of the way, so that it cannot be reached by his creditors, and the vendee also knows of this fraudulent purpose, it is void as to the creditors who were intended to be defrauded. Bear in mind that it is not sufficient that the vendor has creditors and that he intends, by the sale of the property, to get it out of the way so that the creditors cannot get at it, but the vendee must also know of the fraudulent intention, to make the sale void.</p> <p>“ In this case, it is claimed by the defendant that the alleged sale was fraudulent; that it was made with the intention of hindering and delaying Mr. Krause in collecting his debt and defrauding him out of his claim; and counsel for defendant has argued to you, and has gone over the testimony, to show that the surrounding circumstances of the case were sufficient to justify you in finding that it was in fact fraudulent; and plaintiff’s counsel claim that the circumstances and the positive testimony are such that you must necessarily find the other way. Now, it is a question for the jury; the court has no opinion to express in regard to it. You have the testimony of the parties and you have the surrounding circumstances and you will take all into consideration and determine from the facts as to whether or not this was a sale made in good faith in order to pay Charles H. Trent what was owing to him and allow him to take the business and carry it on as the two brothers allege, or, was it done for the purpose of getting it in the name of Charles H. Trent to free D. B. Trent from paying Mr. Krause.</p> <p>“ If you find that it was a fraudulent sale for that purpose, you will find for the defendant, but if you find that the sale was made in good faith, as the plaintiff claims, and as D. B. Trent claims, then you have another question to settle. There are some disputed facts. To free property from an execution against a former owner, it is not sufficient that there be a bona-fide sale made and a sufficient price paid, but there may be, and are, cases that frequently come into court where the court declares that, although the intention of the parties was all right, fair and honest, nevertheless there is what is in law called a ‘ fraud inlaw.’ And to illustrate: If one of you, having a horse, should sell it to Mr. Brown and he paid you the full price for it and leaves it with you, without any change of possession (I speak of a horse because it is capable of being actually delivered at time of sale), he leaves it with you and you go on using it just as if it were your own and next week some one, having a judgment against you, issues an execution and the sheriff levies on that horse, he will take it, notwithstanding Mr. Brown bought it in good faith and paid the money for it and you have done nothing to cheat anybody. That is what is called a fraud in law; the property left in the possession of the former owner without anything to indicate that there has been a transfer of it. That is the general rule in regard to transfers of personal property; but the rule is subject to this modification: the property, to free it from an execution of the creditor of the vendor, must have simply that change of possession which, from its nature, it is capable of and the use to which it is to be put and the surrounding circumstances. In this case the property was practically the tobacco factory with the stock on hands. Now, to show possession, the plaintiff testifies, and D. B. Trent testifies to substantially the same thing, that the sale was consummated between them on the morning of the 1 ith of February. C. H. Trent could not carry on the business until he had a United States license to carry on a factory. He went to the United States internal revenue office, announced his purchase, offered his bond and, in the afternoon or evening, a deputy collector went over there, took an inventory of the goods for Mr. D. B. Trent, who had been the former licensee, and issued a license; the bond was approved and license issued to C. H. Trent as the owner of the cigar factory. That part of it does not seem to be in dispute. The good faith of it is questioned by defendant’s counsel, but the actual transaction, as bearing on the question of delivery, does not seem to be in dispute. Then C. H. Trent alleges that he took and had possession of it and managed it and that D. B. Trent had nothing to do with it. It is in testimony, also — alleged by the Trents — that, in the purchase and payment made on Friday morning the agreement was that part of the purchase money was to-pay the hands up to Saturday night. It is claimed on the part of the defendant that D. B. Trent was actually there managing the place after the alleged sale. Now, the possession must not be a joint one after the sale; it must be in the vendee alone, although the vendor may be employed. There are numerous cases in which the property has remained in possession of the party selling and that was not held to invalidate the sale even as to creditors, but it is always a fact for the jury to take into consideration. [If the vendor remains, doing about the same things he did before, it must be explained to your satisfaction that he is in the employ of the vendee and not acting for himself.] [11]</p> <p>“ Another element in determining as to whether or not there has been a proper change of possession, or whether it was a fraudulent retaining of possession by the vendee, is the length of time that has elapsed between the sale and the time of the sheriff’s levy, because, taking the horse to illustrate again, if, after Mr. Brown had paid for it and before he got it away from the premises, the sheriff had come and undertaken to levy on it, he could not take the horse; it is the leaving it intentionally in the possession of the other party that is the badge of fraud and that makes the fraud in law. The time in this case was very short.</p> <p>“ There is another piece of evidence of exclusive possession that Mr. Krause furnished; he says he went over the evening of the nth to see something about a check and asked for D. B. Trent; C. H. Trent was there, and Mr. Krause says that C. H. Trent was very curt with him; that he told him to get out, that he owned the place now, and that D. B. Trent had nothing to do with it, which was a pretty decided expression as to possession.</p> <p>“ Then, as to the question of the length of time — that visit was on the evening of the nth; the next day, in the forenoon, he takes the judgment note which he held that was signed D. B. Trent and then signed Trent Bros, (which I think was of itself some evidence, and considerable evidence, to show that D. B. Trent was the man), and had it entered, and, at, I believe, 10.40 in the morning, an execution was put in the hands of the sheriff, so that there was not the time to make a complete visible change that might have been expected in a week even, and the fact of the name, ‘ Trent Bros.,’ remaining there on the sign, is not so significant as it would have been if this levy had been made a month after the sale ‘was made.</p> <p>“ Counsel for plaintiff and defendant have presented points in relation to the possession that is sufficient to take the property out of the reach of the creditor; and the want of change of possession that would leave it in the control of the creditor, is stated in both points, and I affirmed both. They have a different theory, though, and it is for you to find the facts. There are some disputed facts, and the court cannot determine, therefore, as a matter of law, whether there was the actual change of possession necessary or not. It is for the jury; and, on the question as to whether or not this was a bona fide sale by D. B. Trent to C. H. Trent, or whether it was done and the transfer made with. the intent to hinder, delay and defraud Mr. Krause, the court has no opinion to express; that is essentially a question of fact for the jury.”</p> <p>The court further charged upon the question of the measure of damages, limiting them to compensatory damages.</p> <p>The plaintiff requested the court to charge :</p> <p>“ 2. If the jury believe that C. H. Trent purchased, for a bonafide consideration, the personal property in the factory; that C. H. Trent went into possession immediately and D. B. Trent ceased to be there; that a new license was taken in the name of C. H. Trent, and an inventory made by the U. S. collector, and the said property was subsequently sold by the sheriff, then the plaintiff is entitled to a verdict for such damages as he has suffered by reason of such sale. Ans. The second point is affirmed, if the sale was made in good faith, i. e., that it was not intended to defraud creditors.” [1]</p> <p>The defendant presented, inter alia, the following points:</p> <p>“ 3. If D. B. Trent and Charles H. Trent, by their declarations and acts, induced Morris Krause to believe they were carrying on business as Trent Brothers, and thereby procured credit and loans of money from him, they were both liable to him for the debts thus created, and the goods levied upon, whether the property of one or both of them, would be legally liable to execution and sale for such debts. .Ans. The third point is refused. There is no sufficient evidence on which the jury would be entitled to find that C. H. Trent was at any time a partner of D. B. Trent. The positive testimony is to the contrary. The evidence of the defendant [plaintiff in the execution] shows that he knew that the firm of Trent Brothers had been composed of D. B. Trent and W. O. Trent, and that as such he did business with them, loaned money to them, and had as interest a share, one-third of the profits of the business. He knew that W. O. Trent had gone out of the business, and it is not pretended that he ever asked for information, or that any person ever told him that C. H. Trent, the present plaintiff, was a partner of the business carried on under the name of Trent Brothers.” [2]</p> <p>“ 4. If Charles H.Trent andD. B. Trent were carrying on business under the name of Trent Brothers, and borrowed money from M. Krause, upon the credit of the firm, the transfer of D. B. Trent to Charles H. Trent of his interest in the property would not prevent Krause from seizing and selling the property upon execution for the debt so contracted. Ans. The fourth point is refused, and is answered in the answer to the third point.” [3]</p> <p>“ 5. An actual and continued change of possession is essential to the validity of a sale of personal property. If D. B. Trent remained in possession of the property jointly with Charles H. Trent, and if there was no open, visible change of possession, but everything remained in and about the store or factory of Trent Brothers as it was previous to the alleged sale to Charles H. Trent, the transaction was fraudulent and void, and the verdict should be for the defendant. Ans. The fifth point is affirmed, with the explanation that the change of possession required is such possession as the subject matter of the sale is reasonably capable of.” [4]</p> <p>“ 8. Under all the evidence in this case, the verdict should be in favor of defendant. Ans. The eighth point is refused.” [5]</p> <p>The following is the evidence chiefly relied upon by the defendant to prove a holding out as a partner by the plaintiff:</p> <p>Krause, the execution plaintiff, called by defendant, testified, inter alia:</p> <p>“A. At that time, Jan.' 1, 1886; he [D. B. Trent] came and said and Charlie [C. H. Trent] — both of them said — represented that this Walter Trent didn’t do any good, was drinking so much that they didn’t want to have anything more to do with him, and then they said — Charlie and Dan — that it isa good thing that this Walter is out because he didn’t do any good, and the business is in such good standing now as it never was before and, I believe, they have got now a little money in bank with a pretty good stock on hand and are able to pay me what they owe me; told me that at the time they made this settlement. ... I gave them a check a few days before the execution was issued, to get money on — By the Court: — Who did you give it to ? A. I gave the check always to the man, to' this D. B. Trent, at the place of business, because he was the transacter of business; never anybody else to do anything but him. Q. Did you see Charles in regard to it ? A. Yes, sir. Q. When did you see him? A. I went there when that check was to be paid in and the date of it they couldn’t make out, so Charles went and altered the date and put ‘io’ there. Q. In your presence? A. Yes, sir; in my presence. Q. Did they get money on this check ? A. This is the check they gave me. Q. Drawn by Trent Bros. ? A. Yes, sir. Q. And Charles put this date to it? A. Yes, sir. Q. Where did he do that? A. In the factory; they had to pay their hands, and he said not to put it in before the i ith — that they had to pay their hands. Q. What reason did he give for that? A. Because he said they need the money, for to pay their hands on Saturday. Q. Did you keep it until the nth? A. Yes, sir. Q. And then you deposited it? A. Yes, sir. Q. Was it paid? A. No, sir; there was no funds to meet it. Q. How long had you known Charles H. Trent before you had this interview with him, when he dated this check as you say? A. About a year. Q. What was he doing ? A. He was in the factory; did like the rest; worked there; transacted business. Q. Did you see him frequently ? did you know him well? A. Yes, sir; seen him often. Q. What did he ask you for — what did he say ? A. To exchange checks with him. By the Court: — Did Charles ask you to do that himself? A. They were together. Q. Where were they? A. In the factory. By Mr. Brown. — Q. What was the sign that was out? A. Trent & Bro. Q. Had he ever any other sign up than that? A. No, sir; not as I know of. Q. When was the last time you were there, what money did you give them, and where did you see them in order to give them the money ? A. It was at the factory when I gave the money or the check; they were both there — both present. Q. Were both of them present at the conversation when Charles H. Trent asked you to postpone the payment of this ? A. No, sir; Charlie only was there. Q. And you did postpone it till the nth? A. Yes, sir. Q. How often did you give them money— you say you gave them money when they were both present ? A. I have got four or five thousand dollars of ‘ exchanged checks ’ with them. Q. Can you remember how often ? A. Every week, from one week to another, for the last two years.”</p> <p>The witness further testified: “Q. What time on the nth did you go to the store and see Charles? A. It was in the morning; about nine or ten. I told him that the check is in now and I can’t take it out. Q. You had deposited it that morning, had you? A. Yes, sir. Q. When you went there on the nth did you see any change in the business or about the place ? A. Not a bit; no, sir ; all was going on the same. I asked on the I ith where Dan is, and he said he just went out with a couple of customers to buy some tobacco. Q. That was what time on Monday ? A. In the forenoon, Feb. nth, 188/. Q. That was just the day before you entered up your judgment ? A. Yes, sir. Q. When did you find out about this alleged sale ; when did you first find out that it was alleged that Dan had sold out to Charlie? A. On the nth in the evening, when I went there to ask him whether that check is paid or not ; I found that they didn’t honor that check and then I asked wheré Dan is. Q. And when you went back what time was that ? A. I think between four and five in the evening. Q. Who did you see ? A. I saw Charlie. Q. What did you say to him ? A. I asked where is Dan or what is the matter about this check, and said you needn’t come here any more ; the property belongs to me now. A. Did he explain to you how it belonged to him ? A. No, sir, he didn’t; he was very cross and I wanted to know how it was — wanted him to explain and he says ‘ it’s no use to have any details about it.’ Q. He gave you no explanation ? A. No explanation whatever. Q. And then you proceeded on your judgment the next day— the I2th? A. Yes, sir.</p> <p>The witness did not testify distinctly that C. H. Trent had held himself out as a partner, or that he thought he was a partner. The Trent Bros., Charles and Daniel, testified that no partnership had ever existed between them.</p> <p>The evidence was further to the effect that D. B. Trent lived upstairs with his family in the house in which the business was carried on, and Charles H. Trent boarded with him! This was continued after the alleged sale, as before.</p> <p>Verdict and judgment for plaintiff, for $754.65.</p> <p>The assignments of error specified, 1-5, the answers to plaintiff’s and defendant’s points, quoting the points and answers; 6-11, the portions of the charge included within brackets, quoting them; 12, that the charge as a whole was misleading and inaccurate; and, 13-15, the rulings on the evidence, quoting the bills of exceptions as above.</p> <p>In the circumstances of this case, the answers to the respective points of the parties, and the oral charge of the court, were generally confusing and misleading, and highly calculated to produce the result that was reached.</p> <p>Without the qualification attached to the absolute affirmance of plaintiff’s 2nd point, the proposition was erroneous; and, with the qualification expressed in very vague language, it is highly probable that the jury were not aided, but misled, as to the elements necessary to make the sale by D. B. Trent to C. H. Trent a valid transaction. The point ignored entirely the question of partnership, as well as the testimony tending to show conspiracy and fraud in the transaction between the brothers Trent, of which there was abundant evidence to sustain a verdict in favor of the defendant.</p> <p>The 3d point did not assume that the Trent Bros, were in fact partners, but the proposition was based upon testimony which would have justified the jury in finding that both of the Trent Bros, did affirmatively and positively persuade and induce Krause to believe that they were carrying on business jointly.</p> <p>The answer to the 5th point effectually deprived the defendant of the instruction prayed for, and it left the jury without any rule whatever upon the subject.</p> <p>Nothing whatever was done to effect any actual change of possession, or, indeed, to exhibit to the employees in the establishment, or to the world at large, a colorable change.</p> <p>A judgment confessed by one partner, in the partnership name, is good against the personal property of the firm, although the individual partners are not named individually. The instruction of the court, in the 6th specification of error, is contrary to that rule of law.</p> <p>Whilst the court has the undoubted right to compel the orderly conduct of a case, we are unable to conceive any legal reason for refusing to permit the cross-examination of the plaintiff, and alleged vendee, who had gone upon the stand voluntarily on his own behalf to prove that he was a bona fide purchaser for value of the goods seized by the sheriff.</p> <p>Jas. S. Young, with him Y. U. Trent, for defendant in error.— Relying upon the testimony and the authority of McKibbin v. Martin, 64 Pa. 352; McCluer v. Forney, 107 Pa. 414; Plugus v. Robinson, 24 Pa. 9; Crawfords. Davis, 99 Pa. 576; Evans v. Scott, 89 Pa. 136, we think the court made no error in its charge, and this disposes of the assignments of error 1, 4, 5, 6, 7, 8, 11 and 12.</p> <p>As to the 13th assignments of error: The plaintiff undertook to show his loss by showing the condition of his business at the time of the levy, the interruption thereof and his consequent loss by such interruption. Under the authority Douty v. Bird, 60 Pa. 52, the court was clearly right in admitting the testimony.</p> <p>Helfrich v. Stem, 17 Pa. 152, is authority for the ruling of the court complained of in the 14th assignment.</p> <p>As to the 15 th assignment, Krause having testified to dealings with plaintiff, it was certainly proper for plaintiff, in rebuttal, to show what dealings he had with Krause.</p>