Howerton v. Holt

23 Tex. 51
CourtTexas Supreme Court
DecidedJuly 1, 1859
StatusPublished
Cited by6 cases

This text of 23 Tex. 51 (Howerton v. Holt) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Howerton v. Holt, 23 Tex. 51 (Tex. 1859).

Opinion

Roberts, J.

This is a case of special assignment of all the goods, accounts, and notes of a mercantile establishment, to pay a particular creditor, with a reservation of the balance, if any, to be returned to the debtor. Holt is nominally the creditor; though really a trustee for the benefit of the particular creditor; the note having been assigned to him for collection, and judgment thereon having been obtained in the name of Holt for the use of Henry Sheldon. The sheriff, Howerton, levied upon and sold a negro woman and child, in the possession of Hudnall, the assignor, that had been traded for in the collection of the debts of the establishment assigned. Holt notified the sheriff of his claim to the negroes, and brought this suit to recover their value. The sheriff set up in defence, that the assignment was fraudulent as to creditors; and that, therefore, the negroes were subject to the execution of Burnside & Go., under which he had [59]*59sold them as Hudnall’s property. Upon the trial, a verdict and judgment were obtained against the sheriff, for the amount, for which the negroes sold, with interest.

As a means of determining the character of this assignment, it is proper to notice : 1st, That it was not shown, that Hudnall was being pressed by any debts, except that of Burnside & Co., or that he was insolvent, or in failing circumstances : 2d. It is not shown, that the property assigned was the whole, or even the larger portion, of his estate. It stands on the ground then, of special assignment, in trust for the security and payment of a particular creditor, and may be regarded as a trust in the nature of a mortgage, with some of the qualities of an assignment ; inasmuch as it not only secures the debt, but also makes provision for its payment, by a disposition of the property, by which it is secured, and an appropriation of its proceeds to its discharge.

Such an instrument is a valid conveyance, when not tainted with a fraudulent intent. In Leitch v. Hollister, there was a special assignment of a particular thing, directly to certain creditors, without the intervention of a trustee, with a reservation of any balance that might remain; and the court said: “ The conveyance, whatever may be its form, is in effect a mortgage of the property transferred. A trust as to the surplus results from the nature of the security, and is not the object, or one of the objects of the assignment. Whether in the instrument, or left to implication, is immaterial. The assignee does not acquire the entire legal and equitable interest in the property conveyed, subject to the trust; but a specific lien upon it. The residuary interest of the assignor may, according to its nature, or that of the property, be reached by execution, or by bill in equity.” (4 Comstock, 216.)

There was no effort, in this case, to subject the residuary interest ; but a direct attack upon the assignment, as fraudulent, as to creditors, because it was fraudulently made, with intent to hinder and delay them.

The charge of the court, as far as it went, was correct. The [60]*60defendant asked the court to charge the jury, that if they believed from the evidence that Hudnall never delivered the goods assigned to Holt, they must find for the defendant.

The evidence justified this charge. It was shown that there was no visible change in the possession or control of the mercantile establishment; that Hudnall remained in possession, disposing of the goods and collecting the debts, as before the assignment. Nor was it shown, that Holt ever took charge of them, even formally, or that he exercised any supervision over the acts of Hudnall, or any one else concerned in the management of the effects. Hudnall’s sign was not removed, nor does it appear that anything was done, except recording the deed, calculated to give notoriety to the change of possession. As tending to show that Holt did take possession of the goods, a mutilated power of attorney was produced by Hudnall, who was sworn as a witness for Holt, which was stated by him to have been executed by Holt, authorizing him to sell the goods, collect the debts, &c. The paper was partly destroyed, so that Holt’s name did not appear upon it, nor was there any explanation of how much more it contained, or by what means it became mutilated. This was supported by no other evidence; and was not of a character to compel the jury to believe, that it was a real and not a pretended and colorable agency ; and if they believed the latter, then it would follow, that a delivery of the possession of the goods had not been made; and they should have found for the defendant. (Butler v. Stoddard, 7 Paige, 163; Burrill, 427, 430.)

The defendant also asked the court to charge the jury, that Hudnall’s remaining in possession of the goods, and using them in payment of other debts than the one secured, was a badge of fraud; as likewise was the assignment of a large amount of property greater than the debt to be secured ; also, that if he was a judgment debtor, that fact was a badge of fraud. These charges, as well as the one first adverted to, were all refused.

It is true, that the court is not allowed to charge upon the weight of evidence, but it may explain to the jury the reasons, [61]*61upon which it is admitted. Why permit any of these facts to be proved at all ? It is because they tend to raise the presumption of a fraudulent intent. That presumption may be removed by facts reasonably explaining and accounting for them consistently with an honest intent. The force of their-tendency to raise this presumption, and of the facts, if any be shown in explanation, must be left to be weighed by the jury.

Possession by the assignor, when the deed is absolute, is generally held to be prima facie evidence of fraud, which, if not explained away, makes the deed void, as to creditors, who are hindered and delayed by it. (Earle v. Thomas, 14 Texas Rep. 592.) Any use of the property, not consistent with the objects of the deed, would increase the force of this presumption, unless satisfactorily explained. An assignment of a much larger amount of property, than what would be necessary to pay the debt, as well as the fact of there being a judgment creditor, are badges of fraud, and are admitted in evidence, as tending to establish it in connection with other facts. (Twyne’s Case, 1 Smith’s Lead. Cas. 83.)

Courts cannot be expected or required, in all cases, to explain in detail, in the charge given to the jury, the purposes for which every piece of testimony has been admitted. But in cases of fraud, where the main issue is, usually, the intent with which the deed is made, something more, than giving in substance a copy of the statute of frauds, will often be necessary, to enable a jury to determine a case, in accordance with the principles which have governed chancellors, in adjudicating the facts connected with assignments. Under the restriction of our statute against charging upon the weight of evidence (Hart. Dig. Art. 753), the court may not be able to do more than explain, that the fact of an assignor being a judgment creditor, or of his having assigned an excessive amount of property, is admitted in evidence as tending to establish a fraudulent intent, and that its effect is to be determined by them, in connection with any facts that may be in the case, explaining them, and making their existence consistent with the objects of the deed, and with fair dealing. To charge [62]

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Bluebook (online)
23 Tex. 51, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howerton-v-holt-tex-1859.