Goldberg v. . Cohen

25 S.E. 707, 119 N.C. 59

• Court: Supreme Court of North Carolina
• Decided: September 5, 1896
• Status: Published

Opinion

Avery, J. :

The assignment of error upon which counsel for defendants relied on the argument was especially the last, in the order in which they appear in the statement of the case on appeal. If the court had charged the jury that the purchase of the remnant of the stock of goods at public auction, and through an agent of one Lee Cohen, of New York, the brother of the assignor, and the placing of another brother, W. H. Cohen, in charge of the goods purchased, considered apart from all other portions of the testimony, constituted a badge of fraud, such instruction would have been clearly erroneous. Banking Co. v. Whitaker, 110 N. C., 345. But circumstances, which of themselves are not sufficient to arouse just suspicion of fraud, very frequently, when considered, as it is proper to do, in their relation to other portions of the evidence, are calculated to challenge close scrutiny into the good faith of a party to an alleged fraudulent transaction. Thus, the sale of goods by an assignor for the beneiit of creditors to an insolvent clerk or to a brother who pays no money, but gives his note, though it does not raise a presumption of fraud, and may be consistent with honesty of purpose without further explanation, is nevertheless calculated to excite suspicion, and is therefore deemed a badge of fraud. Beasley v. Bray, 98 N. C., 266. The sale by the assignor, Sol. Cohen, who was then insolvent, during the year preceding the assignment to his mother, a married woman, who was then incapable of binding herself by contract, and to his insolvent brother, W. H. Cohen, of large quantities of the goods on a credit, and the removal of large quantities of goods to a room just across the street before assignment, together with the bringing of the same back to the store after Lee Cohen had placed W. H. Cohen in charge, and in packages still unbroken, were all circumstances pregnant with suspicion, and, if believed by the jury, invited scrutiny. The evidence of the near relationship of Lee Cohen to the assignor, and to W. H. Cohen and the mother, considered in connection with his entrusting the goods to another near relative of the assignor, who, after being already under suspicion for transactions prior to the assignment, subsequently covinously brought back goods which had been fraudulently concealed and made them a part of the common stock claimed under the purchase for his brother Lee, was properly called to the attention of the jury as a badge of fraud, in the sense that in the light of the surrounding circumstances it gave stronger color to the suspicion that overhung the conduct of the assignor and his near relations, both before and after the assignment. True, the purchase by the absent brother, after the assignment was a fact accomplished, was of itself no evidence of fraud, but his entrusting the management of the goods to a brother whose previous conduct had been suspicious and whose subsequent management of the stock was covinous, tended to show that the concealed goods were brought into the store after, but in pursuance of, a conspiracy to cheat, entered into before the assignment. It is not just to the tidal judge to detach a part of a sentence, or an entire sentence in that portion of the charge enumerating the facts relied on to.show the fraud, and insist that the judge meant, or the jury understood, that every single fact mentioned of itself constituted a badge of fraud. If a transaction is secret and exclusively between near relations, the law, under a familiar rule of evidence, where the circumstances are known only to those parties present, imposes upon an insolvent member of the family, disposing of his property under such circumstances, the burden of rebutting the presumption of bad faith. Helms v. Green, 105 N. C., 251. In Bank v. Bridgers, 114 N. C., 383, the Court said : “ The evidence of near relationship between the parties to a suspicious transaction often constitutes additional evidence of fraud for the jury,” but was not prima facie evidence of fraud. Bank v. Gilmer, 116 N. C., 684. While Lee Cohen was not a party to the assignment, nor present when it was executed, yet his purchase of the residue of the stock, and turning it over to an insolvent brother whose conduct was so suspicious before and after the execution of the deed, together with his near relationship to all of the other parties, tended to show his entrance after the assignment into a conspiracy to defraud creditors, formed by other members of the family, including the assignor, in contemplation of making a fraudulent disposition of the property.

While counsel did not abandon, he did not insist upon the other assignments of error. They have been carefully considered, however, and are all without merit. As they would have been disposed of by a per curiam but for the exception already passed upon, it is not necessary to discuss them in detail. In defendant’s appeal the judgment is affirmed.

Affirmed.