Gallick v. Bordeaux

56 P. 961, 22 Mont. 470, 1899 Mont. LEXIS 44

• Court: Montana Supreme Court
• Decided: April 26, 1899
• Docket: No. 1,065
• Status: Published

Opinion

BRANTLY, C. J.

1. Plaintiff insists that the court erred in permitting the defendants to introduce proof tending to show that the plaintiff’s title to the property .in controversy was founded in fraud, in the absence of a special allegation in their answer setting up the facts. The defendant Thomas J. Bordeaux was allowed, over the objection of plaintiff, to detail a conversation, had with Bordom at the time of the levy, in which Bordoni told him, substantially, that he was in debt to the plaintiff about $100, besides debts he owed to other persons; that, if his creditors would let him alone, he would pay them; that he had put the business in Mr. Gallick’s name for protection; that the business was in fact his, but that the levy of the execution “settled it.” Other witnesses-also testified to similar statements by Bordoni. One of these, Del Grosso, who worked as bartender in the saloon after the sale to Gallick, testified to a conversation between Bordoni and Gallick, just after the time of the sale on May 2d, in which Gallick said to Bordoni: “If any one asks you to whom this-business belongs, just tell them it belongs to me. Nobody will bother you from this on. You go along, and attend to your business.” Then, turning to witness, he said: “You go along, and attend to your business. You are working for Bordoni.” This witness testified, further, that he worked for Bordoni, and was paid by him. The evidence of declarations by Bordoni was further objected to on the ground that declarations made by him after the sale to Gallick were not competent for any purpose, as against Gallick. This proof was all allowed, on the theory that it was admissible under the denials in the answer without special allegations of fraud. We think the evidence admissible, in so far as it tended to show that the arrangement between the plaintiff and Bordoni was-fraudulent. It is the general rule that, where a party to an action relied upon fraud, he must plead it. In replevin, however, it seems to be the rule, supported by the great weight, of authority, that where the complaint contains only general allegations of title and right of possession, without setting forth the origin of the title or the facts upon which it is based, the defendant may deny these allegations generally, and upon the trial give proof of any fact tending to destroy or rebut plaintiff’s claim. Mr. Phillips, in his work on Code Pleading., states the rule thus: “A general denial puts in issue all the essential averments of the complaint, puts the burden of proving them upon the plaintiff, ■ and admits evidence by the defendant (1) to controvert plaintiff’s evidence, (2) to disprove his allegations, and (3) to prove other and inconsistent facts. Under such denial, the defendant may prove his right to possession, or that he, as an officer, levied on the property at the suit of a creditor of him from whom the plaintiff obtained it in fraud of creditors, or he may show title in a stranger.” (Section 492.) The reason of the rule is that it is unfair to compel the defendant to anticipate what the proof of plaintiff’s title will be, and allege specific objections to it, before he will be heard to attack it with his proofs. The plaintiff, under his general allegations, is allowed to show any title he can, no matter what may be its source or the facts upon which it is based. Under his denial, the defendant must, of necessity, be allowed to present proof of anything tending to defeat the title which the plaintiff attempts to establish. If the complaint does not disclose the plaintiff’s title, the defendant may have no knowledge of it until it is revealed by the proof at the ’trial. Especially is this true of an officer who has taken the property under his writ from the possession of the defendant debtor named therein, and is afterwards met by a claim thereto from a stranger, about whose title he knows nothing. There is some conflict in the authorities, but we are of the opinion that this view is correct on reason and principle. The following authorities support it: Cobbey on Replevin, Sec. 752; Burchinell v. Butters (Colo. App.) 43 Pac. 459; Jones v. McQueen (Utah) 45 Pac. 202; Munns v. Loveland (Utah) 49 Pac. 743; Abbott’s Tr. Brief on the Pleadings, Secs. 942, 958; Bailey v. Swain, 45 Ohio St. 657, 16 N. E. 370; Eureka Steel Works v. Bresnahan, 66 Mich. 489, 33 N. W. 834; Blue Valley Bank v. Bane, 20 Neb. 294, 30 N W. 64; Merrill v. Wedgwood, 25 Neb. 283, 41 N. W. 149; Graham v. Warner’s Ex’rs, 3 Dana, 146; Mullen v. Noonan (Minn.) 47 N. W. 164; Johnson v. Oswald, 38 Minn. 550, 38 N. W. 630; Delaney v. Canning, 52 Wis. 266, 8 N W. 897; Mather v. Hutchinson, 25 Wis. 27; Hotchkiss v. Ashley, 44 Vt. 195; Bliss v. Badger, 36 Vt. 338; Lane v. Sparks, 75 Ind. 278; Stephens v. Hallstead, 58 Cal. 193; Eaton v. Metz (Cal.) 40 Pac. 947; Pulliam v. Burlingame, 81 Mo. 111; Gray v. Parker, 38 Mo. 160; Schulenberg v. Harriman, 21 Wall. 44; Bailey v. Bayne, 20 Kan. 657; Bliss on Code Pl. Sec. 328 and notes; Griffin v. Railroad Co., 101 N. Y. 349, 4 N. E. 740.

In addition to the issue made upon the allegations of the complaint, the defendants herein allege justification under the writ of execution in the case of Cooney against Bordoni, and claim the right to hold the property under this writ. The defendants, therefore, through the writ of execution in the hands of the officer, stand in the position of creditors, as to whom a. conveyance by a debtor, either actually or coñstructively fraudulent, is absolutely void. They were, therefore, properly permitted to introduce any proof under their answer tending to show that the sale from Bordoni to plaintiff was constructively fraudulent, because there was no immediate delivery of the property followed by a continued change of possession, or that the sale was actually fraudulent and designed to hinder’ and delay the creditors of Bordoni, or that the arrangement between Bordoni and Gallick was designed to operate as a security to the firm of Gallick Bros, for the money advanced to Bordoni to pay the Brennen judgment. It is not necessary to decide the question whether, in cases of this bind, where the officer seizes property under his writ in the possession of the defendant named in the writ, it is necessary to plead specially the facts in justification. Many of the authorities cited support the rule as laid down by Mr. Phillips, supra. In this, case, however, he has essayed to do so, and no question is made as to the sufficiency of his allegations in this regard. Inasmuch as he occupies the position of one who claims the-property, not as owner, but by virtue of a special interest therein, as an officer under his writ and for the purpose indicated therein, there are reasons why he should be required to do so; for it is only by this special property'that he can be-permitted to contest the right of the plaintiff. So far as the defendant officer here is concerned, except for his writ and the rights acquired by his seizure thereunder, the arrangement between the plaintiff and Bardoni, no matter how fraudulent, in fact or in law, was valid and binding as to all persons whomsoever.

The conclusions here reached are in conflict with the case of Bickle v. Irvine, 9 Mont. 251, 23 Pac. 244, which was followed by the case of Davis v. Morgan, 19 Mont. 141, 47 Pac 793, and perhaps others. These cases are founded upon the •cases of Smith v. Auerbach, 2 Mont. 349, and Botcher v. Berry, 6 Mont. 448, 13 Pac. 45. Smith v. Auerbach was a ■case in which the plaintiff sought to recover the possession of •certain personal property as the assignee in bankruptcy of Louis & Coleman. The defendant held the property under a chattel mortgage. The plaintiff, after setting forth the character of his title, undertook to allege facts sufficient to show that defendant’s mortgage was void under the bankrupt law. The complaint was held bad, because it alleged a mere conclusion, instead of the facts showing the fraudulent character of the mortgage. In Botcher v. Berry the plaintiff was assignee in insolvency of McLean & Co. Certain goods embraced in the assignment had been seized under attachment by the defendant, as sheriff, at the suit of one of the creditors of McLean & Co. The plaintiff sought to recover as assignee, alleging the facts upon which his title was based. The defendant attacked the assignment for fraud. The trial court, on motion of plaintiff, struck out as immaterial the part of the answer alleging fraud. This Court held that the facts constituting the fraudulent character of the assignment were properly pleaded, and that it was error to strike out that part of the answer. The case of Bickle v. Irvine was also one in claim and delivery. The complaint contained general allegations of •ownership and right of possession in plaintiff. The answer was a general denial, and justification under a writ of attachment.- ■ It was held by this Court, under the authority of Smith v. Auerbach and Botcher v. Berry, that the defendant eould not, under .this answer, introduce proof showing that the bill of sale upon which the plaintiff relied as showing his title ¡by- purchase was constructively fraudulent, because the sale was in violation of the statute against fraudulent conveyances. In Davis v. Morgan this Court held, upon the authority of these cases, that the defense of fraud in this class of cases was a special affirmative defense, and that therefore, on cross-examination, the plaintiff, and his witnesses could not be interrogated touching the matters involved in this affirmative defense. As to the two cases first mentioned,, they are clearly correct upon principle. In the former, the plaintiff sought to overturn a fraudulent title under which he alleged defendant claimed. In the latter, the defendant sought to overturn the title of plaintiff, based upon the assignment, by alleging facts and circumstances to avoid it on the ground of fraud. These cases are, therefore, no authority for the cases of Bickle v. Irvine and Davis v. Morgan, but support the general rule. Moreover, in a later case (Pincus v. Reynolds, 19, Mont. 564, 49 Fac. 145), this Court did not adhere to the rule of these last two cases, but held that in this class of cases the plaintiff must recover upon the strength of his own title, and that the whole matter of fraud could be investigated upon the cross-examination of plaintiff and his witnesses. We have therefore decided not to follow the authority of these earlier cases, but to adopt the rule announced herein as more in consonance with reason and principle.

Nor do we think that there is any merit in the objections to declarations of Bordoni on the ground that they were made after he parted with his title to ¿he property in controversy. The other proof showed beyond controversy that, within three or four hours after the transaction of May 2d, by which E. Gallick claims to have purchased the property, Bardoni was again in possession, running the business as before. He had hired a bartender at his own expense to assist him in running the business. The witness Heilbronner testified that .he had sold to Bordoni a bill of goods, to be added to the stock, not as the agent of Gallick, but upon his own account. It is true Gallick and his witnesses testified that Bordoni was only the agent of Gallick to run the business for him, but the evidence nowhere showed that any arrangement had been made by which Bordoni was to account to him in any way for the proceeds of the business. The evidence up to that point, with the exception of the single fact that Gallick’s sign was put up in the place, tended to show that the proprietorship was the same as before the sale. It is the general rule that the declarations of the vendor of the property in disparagement of the title, after he has” parted with his interest therein and his possession, are not admissible against his vendee. But this principle is not applicable to fraudulent sales of property, where the property remains in the possession of the vendor, and the sale is attacked by a creditor on the ground of fraud. The declarations of the vendor under such circumstances, while he is still in possession, and his acts of ownership in regard to the property, are admissible for the purpose of explaining the character of ,his possession, and as shedding light upon the question of his interest therein. (Jones on Evidence, Sec. 354; Murphy v. Mulgrew, 102 Cal. 547, 36 Pac. 857; Redfield v. Buck, 35 Conn. 328, s. c. 95 Am. Dec. 241; Smith v. Boyer, 26 Am. St. Rep. 373 (Neb.) 45 N. W. 265; Wharton on Evidence, Secs. 1166, 1167; Blake v. Graves, 18 Iowa, 312; Bump, on Fraud. Conv. (4th Ed.) Sec. 600; Waite on Fraud. Conv. (3d Ed.) Sec. 279; Roberts v. Medbery, 132 Mass. 100.)

The declarations of Bordoni, while still in the possession of the property which the plaintiff claimed to have purchased from him, were clearly admissible, as shedding light upon the character of the transaction between him and the plaintiff, and the character of Bordoni’s possession; and it is upon this theory that they are admissible, and not upon the theory, as counsel for respondents claim, that Gallick was bound by the declarations of his agent employed by him to run the business for him. If Bordoni were in fact the agent of Gallick, employed to run the saloon business for him, doubtless, within the scope of this business, the plaintiff would have been bound by his declarations. The declarations admitted were clearly not within the scope of that business, but had to do with the title to the property then in possession of Bordoni, the recent former owner.

2. Meyer Genzberger, a witness for plaintiff, testified on direct examination that he was in the employ of the plaintiff, and was present on May 2, 1895, when the property was sold and delivered to the plaintiff by Bardoni. He suggested to the plaintiff, he says, that he (plaintiff) should put up a sign in the saloon showing that he was the owner, and that this was done. On cross-examination he was asked if, after the execution was levied, he did not go into the place to change the sign from £1B. ” Gallick to £tE. ” Gallick. There is some testimony in the record tending to show that this was done by some one. The question was objected to as not proper on cross-examination, because the direct examination had been only as to matters connected with the sale by Bordoni to plaintiff on May 2d. The witness was required to answer, and in reply to the question said that he had not done so. It is earnestly contended that this was error. We do not agree with counsel. If, in fact, the witness had changed the letter upon the sign from ££B.” to ££E.,” the showing of this would have tended to contradict his statement on direct examination that E. Gallick had put up his own sign at the suggestion of the witness. Again, if the sign really had on it the initial ‘ £B., ’5 instead of ‘ ‘E., ” and the witness could be shown to have changed it to ££E.,” the proof of this fact would have tended to show the interest of the witness in behalf of his employer. Further, the witness testified on direct examination that he was in the saloon after the levy, and saw E. Gallick’s sign there. We think the question proper, as having immediate connection with the direct examination. (Code of Civil Procedure, Sec. 3376.)

Plaintiff was called as a'witness in his own behalf. He testified on direct examination that, at the time he purchased the Sonoma Wine Cellar stock and furniture from Bordoni, he had put up his sign, reading £ £E. Gallick, Proprietor, ’ ’ on a partition inside the saloon, facing the front. He was asked on cross-examination, over the objection of his counsel, if he had not put up that sign to defraud creditors. He answered in the negative. Plaintiff complains of this as prejudicial error. Admitting that it was error to permit the inquiry, it was error without prejudice, because no evidence prejudicial to plaintiff’s claim was elicited by it. But we do not think it was error to allow the question. It was proper to thus interrogate the plaintiff touching the character of the relation between him and his alleged vendor.

3. There is no fault to be found in the rulings of the court upon questions of evidence during the progress of the trial, but prejudicial error was committed in directing the jury in the following paragraphs of the charge:

“(12) The court instructs the jury that Bordoni could not be allowed to remain in the apparent sole and exclusive possession of the goods described in the plaintiff’s complaint after the sale thereof, and, if the jury find that he was in such sole and exclusive possession at the time the defendant herein levied upon said goods and took possession thereof, that such possession of Bordoni is inconsistent with an open and notorious delivery and actual change of possession, and that such possession by Bordoni is conclusive evidence of fraud.

“(131 . The jury are instructed that, if they find from the testimony that F. A. Bordoni was in the sole possession of the property levied upon at the time of the levy of the execution issued in the case of Cooney against Bordoni, and they find that Bordoni, the admitted former owner of the personal property so levied upon, had been out of the possession for a period not exceeding four hours, then they must find for the •defendant. ’ ’

The alleged sale by Bordoni to plaintiff was made on May '2d. The evidence of plaintiff tended to show that the place was then in charge of an officer, who had attached the stock and furniture at the suit of one Brennen. The claim of Brennen, amounting to $180, was paid by Gallick Bros. It was then assigned to E. Gallick, and a bill of sale made to him by Bordoni. Thereupon the plaintiff took the keys, locked up the place, and went with Bordoni to the store of Gallick Bros. Within a few minutes afterwards an arrangement was made with Bordoni to reopen the place and run the business for the plaintiff. Thereupon the place was reopened, Gallick’s sign put up, and Bordoni went to work as bartender at $2.50 per day. The whole arrangement was effected in three or four hours. The levy of the execution was on the 15th. Under the former of these instructions, the defendants were entitled to a verdict, on the single fact of Bordoni’s possession at the date of the levy. Under the latter, the jury should have found for defendants, upon this fact and the additional one that Bordoni had not been out of possession more than four hours. Both instructions withdrew from the jury the consideration of all the other facts and circumstances, appearing in the proof and briefly summarized above, which plaintiff was entitled to have considered by them. The question as to the character of the sale was one of fact, to be determined by the jury from all the evidence in the case, and not from these isolated facts, to which their attention was specially called. The apparent exclusive possession by Bordoni on the 15th, thirteen days after the sale, was not inconsistent with the conclusion, possible from a consideration of all the evidence, that the sale was in compliance with the law and made in good faith; nor was it within the province of the court to say that the return of the property to the vendor after four hours furnished ground for a conclusive presumption of fraud.

Complaint is made of other instructions, but an examination of the charge fails to reveal any prejudicial errors other than those already noted. With these two exceptions, the charge, though brief, fairly states the law applicable to the issues involved, and is as favorable to the plaintiff as he could ask.

4. The point is made that the evidence is not sufficient to .sustain the verdict. As the judgment must be reversed on •account of the errors noted in the instructions, we refrain from expressing an opinion on this branch of the case; nor are we to be understood as expressing any opinion as to the liability of defendants A. JEL Barrett and John R. Bordeaux, in this form of action, as sureties upon the official bond of Thomas J. Bordeaux. No question was made on this point, either on the argument or in the briefs of counsel.

Let the judgment be reversed, and the cause remanded, with directions to the court below to grant a new trial.

.Hunt and Pigott, JJ., concur.