Lockhard v. Brodie

1 Tenn. Ch. R. 384
CourtCourt of Appeals of Tennessee
DecidedOctober 15, 1873
StatusPublished
Cited by1 cases

This text of 1 Tenn. Ch. R. 384 (Lockhard v. Brodie) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lockhard v. Brodie, 1 Tenn. Ch. R. 384 (Tenn. Ct. App. 1873).

Opinion

The Chancellor :

This bill was filed on the 8th of January, 1867, by complainants, as creditors of the defendant, Simon Brodie, to set aside a deed of trust on a stock of goods made by said Brodie to the defendant, Max Bissinger, on the 18th of December, 1866, because intended to hinder and delay creditors; and also to set aside as a fraudulent [385]*385device for tbe same purpose a deed, made on tbe 21st of May, 1866, by the clerk and master of this court to tbe defendant, Sophia Brodie, wife of the said Simon Brodie, of a lot bought by Simon Brodie at a master’s sale, and paid for by him.

The facts are that Simon Brodie was doing business as a merchant in Nashville for several years and during the year 1866, purchasing goods from complainants and others in Cincinnati. He bought the lot mentioned at a public sale made on the 9th of January, 1866, for $1,400, and caused the title to be made to his wife in May; and shortly after-wards during the months of June and July he caused to be built on the lot a house which cost about three thousand dollars. These expenditures made it difficult for him to meet his obligation to the complainant and other Cincinnati houses for goods bought, and he wrote several letters to these firms during the month of June asking indulgence on this account. The debts secured by his deed of trust, except one, are all debts for goods, contracted in the month of October following, or shortly after, and due to the complainant and other Cincinnati houses. He seems to have paid up all previous indebtedness, and his purchases in October and afterwards amounted to about $4,000.

By the deed of trust of the 18th of December, 1866, Simon Brodie undertakes to secure all his creditors, not rata-bly, but in the order of priority in which they are mentioned. The first debt named, and to which preference is given by the deed over all others, is described as a debt to Bernhard Bissinger in the sum of eighteen hundred dollars “due by note on the 1st day of September, 1866.” Then follows a debt to Samuels &Holyman, of Cincinnati, of $585 ; and next a debt to Naff, Egan & Slocumb, of Cincinnati, of $703. Then follows the debt due to complainants, and then in succession debts to several other Cincinnati houses. Simon Brodie and wife, the trustee, Max. Bissinger, and all the persons secured by the deed, other than the complainants, are made defendants to the bill. Bernhard and Max. Bissinger are brothers [386]*386of the defendant, Sophia Brodie, the wife of Simon Brodie. The evidence taken in this cause shows that, since the filing of this bill, the trustee has bought the claims of Samuels & Holyman and Naff, Egan & Slocumb at a discount of about 40 per cent, and taken a receipt from them in full. The other creditors mentioned in the deed after the complainants have not answered this bill, but, on the 14th of March, 1867, filed a bill, which will be considered presently, in which they refer to and adopt the charges in this bill, and seek to reach the same property for the satisfaction of their debts.

The first ground assumed by these complainants to set aside the trust deed to Max Bissinger is that it contains pro-' visions on its face for the benefit of the grantor which renders it void in law. The conveyance of the goods is absolute, and the trustee is authorized to take immediate possession of the store and make an inventory of the goods as soon as practicable. Then follows this provision : ‘ ‘ He (the trustee) will then proceed to sell the goods by retail in the house where they are now situated, employing necessary clerks for his assistance. Said trustee is hereby authorized to retain possession of the present house, and to defray the incidental expenses of the same, such as clerk hire, fuel, etc., out of the proceeds of the sale of the goods, which is only to be for cash, he will pay the same.” This is the only clause in the deed which seems to be unusual, or at all subject to exception. And it must be admitted that it is a somewhat unusual clause. It is not uncommon, nor is it objectionable, to give a trustee discretion, until default of payment, for a period not exceeding the usual law’s delay to wind up a trust deed for the benefit of creditors. And in •such cases, it has even been held that a stipulation that the maker should remain in possession jointly with the trustee, and be his agent for the sale, will not vitiate the deed. Saunders v. Turbeville, 2 Hum. 728-9. But retaining possession after default of payment is prima facie evidence of intent to hinder and delay. Davison v. Handley, 3 Yer. 502, expounded in Maney v. Killough, 7 Yer. 440 , 445. [387]*387The provision of the deed under consideration undertakes, upon an absolute conveyance with authority in the trustee to take immediate possession, to direct the mode of conducting the trust for twelve months. The clause, exceptionable on its face, has been rendered doubly so by the fact that the possession was in fact continued in the grantor, ostensibly as clerk upon a salary, with the power of disposition, subject, however, to account with the trustee. These facts, in connection with the further fact that the one brother-in-law of the grantor is the trustee and another the principal beneficiary, go far to quicken our suspicions of the good faith of the transaction. If to these circumstances there should be added the preference of a fictitious debt over all the other debts secured, and to an amount sufficient to exhaust the greater part of the funds, our doubts would be rendered certainties. And this addition, it is claimed, is to be found.

The bill expressly charges that the alleged debt to Bern-hard Bissinger is fictitious, and it expressly calls upon the defendants “to explain and show the consideration of said note, when, where, and how it was created.” The defendant, Simon Brodie, says, in his answer, that the debt “ was created for money loaned at the time of the date of the note.” Bernhard Bissinger, in his answer, said “that the same (the note) was executed and delivered to him by said Brodie for tbe consideration of money actually paid and bona fide loaned.” The complainants excepted to this answer because they had called on the defendant to show when, where, and how said note was created. This exception was sustained by the Chancellor, and the defendant filed an amended answer in which, after making the note itself an exhibit, he says : “And ike note toill show the date, which he alleges to be the true and correct date of the same.” The date of the note or due-bill is September 1, 1866, and, in view of the allegations of the bill, and the pointed language of the exception, there can be no doubt that both of these defendants intend to be understood as asserting, however guarded their language may be, that the note was executed at the time it [388]*388bears date, and for money then loaned. Now, tbe note and tbe original deed of trust are filed and are unmistakably in tbe same band-writing, and tbe deposition of Warner Lewis shows that both of these instruments were drawn up by him on tbe 18th of December, 1866, and were then executed. Tbe answers of tbe defendants are untrue, and without any motive except it be to give an appearance of genuineness to that which tbe defendants knew to be false. It need scarcely be said that tbe recital of a false and fictitious consideration in a deed of assignment for creditors — as a debt asserted to be due and intended to be secured when in fact no such sum was due — is conclusive of an intention to hinder and delay creditors, and tbe deed must be set aside as void. Peacock v.

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Bluebook (online)
1 Tenn. Ch. R. 384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lockhard-v-brodie-tennctapp-1873.