Carson v. Hawley

84 N.W. 746, 82 Minn. 204, 1901 Minn. LEXIS 533
CourtSupreme Court of Minnesota
DecidedJanuary 8, 1901
DocketNos. 12,274—(100)
StatusPublished
Cited by10 cases

This text of 84 N.W. 746 (Carson v. Hawley) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carson v. Hawley, 84 N.W. 746, 82 Minn. 204, 1901 Minn. LEXIS 533 (Mich. 1901).

Opinion

LOVELY, J.

N. A. Crittenden, a merchant at Pine City, having a stock of merchandise, consisting of clothing, furnishing goods, boots, and shoes, of the value of $7,000, was hopelessly insolvent. Among his creditors was the R. P. Smith & Sons Company, of Chicago, which held a claim against him for $679 then overdue. A general agent of the Smith Company (J. P. McMannis) called upon the debtor to secure payment. Crittenden was unable to meet this demand, and McMannis, according to the testimony of Crittenden, then proposed that the latter should sell his entire stock to a purchaser whom the Smith Company would procure for him, when-he could pay its claim, and, as suggested by McMannis, take up a mortgage of $2,000, which was then a lien upon a farm owned by Crittenden and wife (but not occupied by them), for the purpose of securing the same as a homestead. After this interview between Crittenden and McMannis, the latter left the Smith Company claim with an attorney, and returned to Chicago.

A day or two afterwards Edward E. Smith, the head of the Smith Company, telegraphed plaintiff, who lived at Knoxville, Illinois, to come to Chicago, as they had a business “proposition” or “opportunity” for him. Plaintiff answered in person, arriving in Chicago in the afternoon, where he remained three days, hav[208]*208ing several interviews with Smith. On the day of his arrival he called at the office of the Smith Company, and made an appointment for a meeting next morning, at which time he had an interview with McMannis, and whatever arrangements were made for future dealings with Crittenden, on plaintiff’s claim, were conducted at that time. Plaintiff then obtained three cashier’s checks, one of $2,000 and two of $300 each, from the Illinois Trust & Savings Bank, and on the night following left Chicago for Pine City. McMannis accompanied him on the train to St. Paul, where plaintiff left him to go to Pine City. Before plaintiff left St. Paul, McMannis gave him a symbolic memorandum, signed “C. A. N.” (Crittenden’s initials reversed), under which was drawn a line, and the name “Jones” written beneath. This was given for the purpose of introducing plaintiff to Crittenden.

On the arrival of plaintiff at Pine City, he called upon the attorney who held the claim of the Smith Company, and. then went to the store of Crittenden, and, after a short conversation, handed him the “C. A. N.” memorandum. A talk ensued relating to the purchase of the entire stock of the debtor. An invoice was taken that night, when the value of the stock was estimated at $5,700. Shortly afterwards the plaintiff offered Crittenden $2,575 in cash for the same. Crittenden haggled, and demanded more, but the plaintiff made this offer his ultimatum, and the trade was closed. The stock was turned over to plaintiff, who entered immediately into possession, made some slight additions to the value of about $100, and proceeded to sell the same at low prices, until December 1 following, when, upon a writ of attachment issued at the instance of an unpaid creditor of Crittenden, the sheriff seized the unsold portion of the merchandise remaining in the store, amounting to about $4,000, upon the claim that the sale from Crittenden to plaintiff was fraudulent as against his unpaid creditors.

This action is brought against the sheriff by plaintiff to recover the value of the goods so taken. The plaintiff recovered $102, the value of the attached property which he had placed in the stock after taking possession. By this verdict the sale was necessarily found to be fraudulent as against the attaching creditor, except as to the goods concededly owned by plaintiff. Plaintiff moved [209]*209for a new trial, which was denied, and from such order appeals.

Immediately after the sale and transfer of the goods to the plaintiff, Crittenden turned over to the attorney of the R. P. Smith Company, who was also his own attorney, the two $300 cashier’s checks, and paid him the balance of his indebtedness to that company. Plaintiff also gave the same attorney the $2,000 draft, which was deposited in the Rush City Bank, where it was held for Crittenden’s benefit for a short time, when it was applied in the extinguishment of the mortgage on the eighty acres owned by Crittenden and wife, upon which they moved soon after, and have held it ever since as their homestead. After plaintiff left McMannis at St. Paul, the latter went to the Nicollet House, in Minneapolis, and registered under the name of James P. Byrnes, where he received a telegram from plaintiff at Pine City, informing him that the trade was closed.

The contention of defendant at the trial, which may have been adopted by the jury, was that the Smith Company was the purchaser in fact of the Crittenden stock; that through their representative (McMannis) they induced their debtor to dispose of his entire stock of goods at a grossly inadequate price, .but sufficient to enable him to pay the debt due the company, and secure for himself a homestead by applying the balance of the purchase money to pay off the mortgage thereon; and that plaintiff, in the alleged fraudulent scheme, was also acting for the Smith Company, who might be interested not only in securing its debt, but in the profits of the enterprise.

Since there must be a new trial for the error hereafter referred to, we refrain from discussing other evidence to sup'port defendant’s claims, either in detail or as to its general weight and effect, for the reason that we are of the opinion that upon the whole record, excluding testimony improperly received, there was evidence fairly tending to support the verdict, and the jury had the sole right to determine the question at issue, viz. whether the stock of merchandise turned over by Crittenden to plaintiff was purchased by the latter with the intent to hinder, delay, and defraud the unpaid creditors of the vendor.

It was earnestly contended by plaintiff that the application of [210]*210the $2,000 on the homestead, notwithstanding it converted unexempt into exempt property, and created a benefit when none had previously existed, was a legal right, of which Crittenden might avail himself, and that the alleged scheme of McMannis in that regard was legitimate and proper. Conceding, without deciding, that Crittenden had the right to convert his unexempt into exempt property, under the circumstances, the exercise of such right by Crittenden does not justify a fraudulent purpose on the part of the agent of the Smith Company, who made the proposition to do so, and aided in accomplishing that object. If Crittenden had the right to take the avails of his unexempt property and create a homestead, such right would inure solely to the'benefit of the debtor, and should not advantage the importunate creditor who devised the scheme; and it follows that such plan, to put the entire property of Crittenden beyond the reach of other creditors, is, so far as the Smith Company and their alleged middleman, the plaintiff, was concerned, a badge of fraud, which might properly have had its weight with the jury in determining the intent of plaintiff, who had no right to perpetrate a fraud even to secure a- legal right for another.

It is urged, also, that the sale of the stock of merchandise by Crittenden for less than one-half of its value, does not, of itself, establish an intent to defraud his creditors by the purchaser.

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Cite This Page — Counsel Stack

Bluebook (online)
84 N.W. 746, 82 Minn. 204, 1901 Minn. LEXIS 533, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carson-v-hawley-minn-1901.