Frankenthal v. Goldstein

44 Mo. App. 189, 1891 Mo. App. LEXIS 121
CourtMissouri Court of Appeals
DecidedFebruary 24, 1891
StatusPublished
Cited by3 cases

This text of 44 Mo. App. 189 (Frankenthal v. Goldstein) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frankenthal v. Goldstein, 44 Mo. App. 189, 1891 Mo. App. LEXIS 121 (Mo. Ct. App. 1891).

Opinion

Thompson, J.

Several creditors of the firm of Goldstein & Rosenwater sued out an attachment against that firm and levied upon their stock of goods. Two third parties, Jacob E. Roth and Samuel White, inter-pleaded for the property. Roth was a merchant and a creditor of defendants, and White had been one of their employes, and was also a creditor. In satisfaction, or pretended satisfaction, of the claims of these two creditors, and for a further consideration paid by them, the defendants conveyed to them all their property in two stores which they were carrying on. The stock in their store at Charleston they conveyed to White; and the stock in their store at Poplar Bluff, they conveyed to Roth. Their books of account, containing accounts against their customers of the nominal value of some $28,000, they retained. The sole issue on trial was, whether these conveyances were fraudulent as against the creditors of the defendants. A trial by jury resulted in a verdict and judgment for the interpleaders, thus upholding the validity of the conveyances. The plaintiffs, appealing, present a voluminous record — two large bound volumes — and assign three principal errors, the only ones which we shall notice.

[191]*191I. The first is that the verdict is contrary to all the evidence. We have no hesitation in saying that this error is not well assigned. It was admitted that the burden of proving fraud was upon the plaintiffs, these appellants. It was also admitted, on the argument, that no case has been found in Missouri, wherein the trial judge has been sustained in directing a verdict in favor of the party having the burden of proof, where the issue was fraud in fact as distinguished from fraud in law. In our judgment this can be done in two cases only: First. Where there is a conceded or uncontroverted state of facts, with nothing for the jury to pass upon in respect of the credibility of evidence, and where, upon that state of facts, the law draws the inference of fraud as a mere conclusion. Second. Where, as in this case, the question is, what is termed fraud in fact as distinguished from fraud in law; and there is a state of facts, equally conceded, upon which the inference of a fraudulent or dishonest intention is so plain that fair-minded men could not differ concerning the conclusion of fact to be drawn.

A close analogy exists in actions for damages for negligence. If the facts are conceded, the court may draw the inference of negligence in those cases where an established rule of law, common or statutory, requires the inference to be drawn. Moreover, if the facts are in like manner conceded, aud the negligence imputed is a conclusion of fact, not a conclusion of law, yet, where fair-minded men could not differ as to the conclusion that the inference ought to be drawn, the court may direct the jury to draw it.

In either of these cases, — fraud or negligence, — if the courts were freely to direct verdicts in favor of parties sustaining the burden of proof, they would soon overturn the independence of juries, which is so sedulously guarded by the constitution and laws of this state, and overturn our present system of jury trial.

[192]*192Applying this principle to the present case, the facts that our law allows a failing debtor to prefer his-creditors, and that there was evidence tending to show that the debts which the defendants in this case owed to Roth and to White were honest debts, and that the property conveyed by them to Roth and White was conveyed at a fair valuation, suggest that it is possible, to say the least, for fair-minded men to say that these transactions were consistent with honesty and right-acting under the rules of law ; and this is enough to make it clear that the court could not properly have directed a verdict in favor of the party sustaining the proposition of fraud, and that we cannot properly order a new trial on that ground. The fact, that twelve seemingly fair-minded men have found, upon the mass of evidence submitted to them, in favor of the conclusion of honesty and right-acting and against the conclusion of fraud, ought surely to have some weight in the minds of judges-in deciding such a question. We see nothing in the evidence which impresses us with the idea that the jury have taken an extraordinary or unusual view of it, much less that they have acted from passion, prejudice, or under an obvious mistake.

II. Error is next assigned upon the giving, at the request of the interpleaders, of the following instructions: “8. You are further instructed that, before you will be warranted in finding that the bill of sale read in evidence, and the sale of the goods to Roth and White, was made by Goldstein & Rosen water, with the intent to hinder, delay or defraud creditors, and that said Roth and White had knowledge of such intent, it is incumbent upon defendants to prove such facts ; and the burden of establishing such facts rests upon the defendants, and, unless they have established, to your satisfaction, that the sale of said goods was made with the intent to hinder, delay or defraud creditors, and-that Roth and White had knowledge of such intent, [193]*193then you ought not to find that such sale was fraudulent and void.”

“9. You are further instructed that, while the burden rests upon defendants to establish to your satisfaction the fraudulent intent of Groldstein & Rosenwater in the transfer of the goods in controversy, and the knowledge of Roth and White of such intent, yet. such facts need not be proved by direct and positive evidence, but may be deduced from all the facts and circumstances attending such sale, and if from all the evidence and circumstances in proof you can satisfactorily and reasonably infer their existence, you will be warranted in finding the issues in this case for the defendants.”

The parts objected to by the appellants are italicized. It is perceived that, by an obvious error, the word “defendants” is used in each, of these instructions instead of the word “plaintiffs.” Regarding the interpleaders as standing towards the attaching plaintiffs in a sense like plaintiffs towards defendants in an ordinary action, this slip of the pen explains itself.

The criticism upon these instructions is, that fraud may be established by a mere preponderance of the evidence; whereas these instructions require that the evidence should possess a higher probative force than a mere preponderance over the opposing evidence. No decision of an appellate court of this state has been cited in support of this proposition, which is in point; but we are referred to two decisions in other jurisdictions which bear out the appellants’ contention. In Ruff v. Jarrett, 94 Ill. 475, it was held error to instruct the jury, in a case where the question of fraud was in issue, that they should find against the' conclusion of fraud, unless they were “ satisfied by a preponderance of evidence.” In Schmick v. Noel, 72 Tex. 1, an instruction was criticised, which told the jury that fraud could not be presumed, but must be proved to the satisfaction of [194]*194the jury, and which at the same time told them that it could be proved by circumstantial evidence. The instruction was regarded as self-contradictory, but we do not see why. We are unable to adopt the views of these courts.

Two decisions in this state, not cited to us, bear upon this question to some extent. In Marshall v. Ins. Co., 43 Mo.

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Bluebook (online)
44 Mo. App. 189, 1891 Mo. App. LEXIS 121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frankenthal-v-goldstein-moctapp-1891.