Alsop v. Catlett & Jenkins

34 S.E. 48, 97 Va. 364, 1899 Va. LEXIS 49
CourtSupreme Court of Virginia
DecidedSeptember 14, 1899
StatusPublished
Cited by31 cases

This text of 34 S.E. 48 (Alsop v. Catlett & Jenkins) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alsop v. Catlett & Jenkins, 34 S.E. 48, 97 Va. 364, 1899 Va. LEXIS 49 (Va. 1899).

Opinion

Buchanan, J.,

delivered the opinion of the court.

This suit was brought to set aside and annul a deed of trust executed by the firm of Catlett & Jenkins, and to subject the property embraced in it, and other property acquired in lieu of the property conveyed, and the profits derived therefrom, to the payment of certain judgments due the complainants, upon the ground that the conveyance was made for the purpose of hindering, delaying and defrauding complainants, the appellants here, in the collection of their debts.

Conceding, for the purposes of this case, that the deed of trust was made by the grantors with the fraudulent intent alleged, does the record show that either'the trustee in the deed of trust or Mrs. Coleman, the only creditor secured who is charged with fraud, was a party to it?

The grounds relied on in the bill to show that the trustee was a party to it are that he never took possession of nor sold any of the property conveyed, nor collected or paid over any money to the creditors secured, but immediately upon the execution of the deed of trust turned over to the wives of the grantors all [366]*366the property, without -interfering in any manner whatever with the business of the grantors; that he was a mere conduit for passing the title of the property from the grantors to their wives; and that he has never made any settlement of his accounts as trustee.

It is true that the trustee had never made any settlement of his accounts; but it clearly appeal’s that, immediately upon the execution of the deed of trust, he took possession, and made an inventory of the goods and merchandise on hand, and gave a considerable portion of his own time to closing out the business.

It is shown by Blair, the chief clerk of the trustee in closing out the business, who was put upon the stand by the complainants, that the trustee gave to the business of the trust all the attention that was required, and that he discharged his whole duty in handling and disposing of the goods.

It further appears that the trustee, after carrying on a retail business for about one and a half months, during which time he sold nearly one thousand dollars7 worth of goods, disposed of the residue of the stock which was inventoried at between $1,600 and $1,700, cost price, for $1,500 to Mrs. Coleman, to be applied as a credit upon her debt of $3,000, she being one of the preferred creditors. The trustee paid the other preferred creditors about the same pep cent, on their debts out of the moneys in his hands arising from the sale and collections made by him.

The real estate embraced in the deed of trust was subject to liens when conveyed to the trustee. By the terms of the trust he was authorized to sell the property either publicly or privately, as he might deem best. He sold privately to the wives of the grantors the property in which the latter had been carrying on their mercantile business at a price very little, if any, more than the amount of the lien upon it. It may be that the property was worth and would have sold for more than they agreed to give for it, although it appears that the holder of the [367]*367lien refused to take the property in satisfaction of the debt. This sale, while it may be a circumstance tending to show that the trustee was cognizant of or a party, to the fraud of the grantors in making the assignment, does not by itself, or in connection with the other facts proven, make out a case of fraud against him. It is true, as contended by counsel for the appellants, that fraud can only be proven in most cases by circumstantial, and not by direct, evidence. But whether proven by circumstantial or direct evidence the rule is universally recognized, except in a particular class of cases within which this trustee does not come, that he who alleges fraud must clearly and distinctly prove it. The law never presumes fraud, but the presumption is always in favor of innocence, and not of guilt. Engleby v. Harvey, 93 Va. 440, 445, and cases cited.

As before stated, the only one of the creditors secured in the deed of trust, who' is charged with fraud, is Mrs. Coleman, the mother of one of the grantors, and the aunt of the other.

The bill alleges that the firm of Catlett &' Jenkins, the grantors, did not owe her the sum of $3,000 secured by the deed of trust, nor any other sum of money, and that she never was at any time worth that sum or any other considerable amount, but that she and her name were used as a blind to cover up and give a specious appearance to the false and fraudulent transaction of the grantors; and that, if they ever at any time owed her any sum of money, it had been settled, adjusted, compromised, or paid.

The complainants not only failed to make good these allegations against Mrs. Coleman, but the record shows that she was, at the time of the execution of the trust, and had been for more than twenty years, engaged in a successful business in Warren county, where she resided; that she was a woman of means, of good personal and business character, amply able to lend the amount secured. Mrs. Coleman testified that this sum was due her for money loaned the grantors from time to time, beginning [368]*368in September, 1889, when they commenced business in Pocahontas, and continuing to February, 1893, less than one month before their assignment. She gives the date and the amount of each loan, states that notes were taken therefor, exhibits checks for sums loaned aggregating $1,770, and states that the residue of the $3,000 was loaned in cash.

Por a mother to lend money to her son and a nephew whom she had to a great extent reared, to commence and continue business upon, is a reasonable and natural transaction. She was able to make the loan; she is shown to' be a woman of good character, and states positively that the loan was made, and was due and unpaid when the trust was executed. She further testified that she knew nothing of the execution of the assignment until after it was made. The circumstances relied on to show that her debt was a fictitious one, or that she was guilty of fraud in the execution of the trust, are clearly insufficient. That conclusion could only be reached by finding that Mrs. Coleman was guilty of deliberate false swearing, and of this there is no satisfactory evidence. The fact that she afterwards purchased the remnant of the stock of goods from the trustee, and continued the business in the name of Catlett and Jenkins, as her agents, and subsequently turned the business over to their wives, does not, even if her object in doing so was an improper one (and this has not been shown), affect the validity of the original assignment. When it was established that the debt secured to be paid her was a valid and subsisting one, and that she knew nothing of the execution of the assignment until after fit was made, the bona fides of that transaction, SO' far as she was concerned, was fixed, and her subsequent conduct could not render it fraudulent.

We are of opinion, therefore, that the complainants have failed to show that either the trustee or Mrs. Coleman was guilty of the fraud charged against them.

It is earnestly insisted by counsel for complainants that, even [369]

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Bluebook (online)
34 S.E. 48, 97 Va. 364, 1899 Va. LEXIS 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alsop-v-catlett-jenkins-va-1899.