Hudson v. P. J. Willis & Co.

28 S.W. 929, 87 Tex. 387, 1894 Tex. LEXIS 478

• Court: Texas Supreme Court
• Decided: December 17, 1894
• Docket: No. 193.
• Status: Published

Opinion

DEKMAK, Associate Justice.

It appears from the record that Thomas F. Hudson, Sr., and his son John A. Hudson, composing the firm of Thomas F. Hudson & Son, were, prior to January, 1881, merchants at Eockdale, Texas, on which latter date they failed and made an assignment of a large stock of goods for the benefit of their creditors; that in June, 1881, the assignee sold the remnant of the stock in bulk to Kauffman & Bunge for about $10,000; that immediately after the sale the same was taken charge of and the business conducted in the same place by said Hudsons, under the name of “Thomas F. Hudson & Son, agents;” that there wasspme kind of an understanding between Kauffman & Bunge and said Hudsons, the nature of which is not material to state, whereby the former were to be paid said purchase money and then the business was to belong to the Hudsons; that while said business was being thus conducted, about October, 1881, plaintiff, Thomas F. Hudson, Jr., a son of Thomas F. Hudson, Sr., who had recently arrived at the age of 21 years, began business as a merchant, ostensibly on his own account, at Caldwell, Texas, where his father had been engaged in business for many years, before beginning at Bock-dale; that between October and December 15, 1881, Thomas F. Hudson, Sr., placed in the safe of Thomas F. Hudson, Jr., at Caldwell, something over $15,000, which, according to the testimony of plaintiff, he was to use as his business required, of which amount he claims he used $15,000; that" the claim of Kauffman & Bunge aforesaid was satisfied in January, 1882, and thereupon they appear to have had no further interest in the goods; that on the 15th of January, 1882, Thomas F. Hudson, Sr., rented in his own name a storehouse in Fort Worth, Texas, for. which he agreed to pay $250 per month; that plaintiff testified, that he bought the Eockdale stock from Thomas F. Hudson & Son on January 26, 1882, but had already boxed and prepared for shipment to Fort Worth his Caldwell stock, and would have gone there whether he purchased the Eockdale stock or not, and that the house was rented for him; that plaintiff and the members of the firm of Thomas F. Hudson & Son testified, that at time of purchase of said Eockdale stock, on January 26, 1882, plaintiff paid said firm $2000 cash, and gave them his unsecured note, payable in one year, for $24,516, dated January 22,1882, that being balance of purchase money; that the goods were shipped from Rockdale and Caldwell in name of plaintiff, arriving at said store about the 1st of February, 1882; that about that date the store was opened and the ‘-business conducted in the name of “Thomas F. Hudson, Jr.,” until seized by defendants, in October, 1882, during all which time said John A. Hudson acted as bookkeeper, and during much of the time Thomas F. Hudson, Sr.; was at the store, aiding in the conduct of the business by advice and otherwise; that the witnesses differed as to the value of the stock at time of seizure, some placing it as low as $15,000 and others as high as $65,000, but they appear to have sold at public auction in bulk soon after seizure for $17,025; that while the witnesses on both sides referred to the seizure as having been made by virtue of an execution issued on a judgment in favor of defendants, P. J. Willis & Bro., against Thomas F. Hudson, Sr., and John A. Hudson, composing the firm of Thomas F. Hudson & Son, aforesaid, neither the judgment, execution, nor levy were introduced in evidence, and no attempt was made to justify the seizure thereunder; that on the trial below there was no controversy about the fact of insolvency of Thomas F. Hudson, Sr., and John A. Hudson, composing said firm, for the plaintiff, in addition to the other testimony in the record, testified, that “ at the time of the assignment his father had turned over everything not exempt; that he knew of no property his father or brother had except what they sold and loaned to him; that he had everything they had; that the understanding was, that the Caldwell stock should go up [to Fort Worth], and if his father did not succeed in fixing up matters he would sell the Rockdale stock to me; if father fixed up matters, he would take the store; he did not fix up matters; he sold out to me; that the reason John A. Hudson was in the store at Fort Worth was, that he was out of employment when plaintiff bought them out, and had to do something; he [John] could not buy it out, as he was not in a condition to buy out; he was owing, I understand; I could not say of my own knowledge why he could not buy, except he could not hold property; he had no name; John had no name; that was the reason he could not hold the business;” and in giving the reason why he bought out Hudson & Son he said, “he knew they owed some,” and that, “their object [in selling to him] was because they could not hold the stock, and they thought they might as well sell to him as anybody else.”

Plaintiff sued defendants for the conversion of the goods. Defendants did not seek to justify the seizure, but defended solely upon the ground that the property seized was the property of Thomas F. Hudson & Son, and was simply covered and concealed under plaintiff's name, without putting any title in him.

It was, on the “trial below, conceded by defendants, and the jury were instructed in accordance with previous decisions of this court in this cause, that if there was a real transfer of the goods to plaintiff by Thomas F. Hudson & Son, although such transfer was fraudulent and void as to creditors of said firm, it was good as to every one else, and vested such title in plaintiff as'would authorize him to recover against defendants, who did not show themselves to be creditors of said firm. 65 Texas, 694; 73 Texas, 256. It appears to have been conceded upon the trial that plaintiff was entitled to recover, unless upon the whole case the jury should find that Thomas F. Hudson & Son were using plaintiff’s name as a cloak under which to conceal and carry on their own property and business.

On the trial plaintiff offered to prove, that the judgment under which the seizure was made, was, prior to the seizure, satisfied, in law, by reason of the fact that defendants, P. J. Willis & Bro., plaintiffs in the judgment, had accepted the assignment. 65 Texas, 694. The court excluded the evidence.

The verdict and judgment were for defendants, from which plaintiff appealed to the Court of Civil Appeals, First Supreme Judicial District, where he contended that the exclusion of said evidence was ground for reversal, upon the proposition, that “the excluded evidence was competent and material in rebuttal of any inference which might be drawn from the testimony offered by defendants of motive on the part of Thomas F. Hudson, Sr., and John A. Hudson to cover their property in the name of plaintiff.”

The entire Court of Civil Appeals are agreed that the evidence was admissible for the purpose stated in said proposition; but a majority of said court are of opinion that its exclusion is not, under the facts in the record, reversible error, and therefore conclude to affirm the judgment, from which opinion and conclusion one of the judges having dissented, said court, on motion of appellant, has certified said question to this court for decision.

Upon the issue of motive it would have been competent for defend-" ants to have proved the extent of indebtedness of Thomas F. Hudson & Son, and the nearer such indebtedness approached insolvency the greater would have been its probative force on such issue. It follows, that it would have been competent for plaintiff to rebut this proof in whole or in part by showing the payment, or satisfaction in law, of all or any of such debts, and the probative force of such evidence on such issue would have depended in some measure upon the extent of the payment or satisfaction, and whether there continued to be a question as to the release of the debtor thereby. Evidence of indebtedness is not direct proof of motive, but from such evidence motive may be inferred; and where the existence of motive is a disputed question of fact and sought to be established by such evidence, in order to hold that the exclusion of such rebuttal testimony is not error, it should clearly appear that its admission could not properly have changed the result.

The record of this cause shows that there was no dispute as to the insolvency of Thomas F0 Hudson, Sr., and John A. Hudson. According to plaintiff’s own testimony, they had made an assignment under the statute, which could only be made by persons insolvent or contemplating insolvency; had turned over all their property to the assignee; that afterwards they had nothing but what they bought from Bunge, and that at time of sale to plaintiff they had nothing but what they had sold and loaned to plaintiff; and no proof was offered to show that by virtue of the assignment, or otherwise, any of their debts had been paid or discharged except that of defendant. Plaintiff further testified, that “their object [in transferring the goods to him] was because they could not hold the .stock;” and that “John A. Hudson had no name, and that was the reason he could not hold the business.”

Here is direct proof of insolvency, and of motive, or object, to place the goods in plaintiff’s hands to defraud creditors, coming from plaintiff’s own lips, and he was a party to the transaction and in a position to know the facts. From the insolvency the motive could have been inferred, but when plaintiff testified to the motive, why resort to inference?

Whether the motive is to be inferred from the .undisputed fact of insolvency, or is to be considered as proved by the direct testimony of plaintiff himself, we are of opinion that the proof of the satisfaction of defendants’ judgment could not properly have influenced the minds of the jury on the issue of motive, and that the exclusion of the testimony was not reversible error.

Affirmed.

Delivered December 17, 1894.