Oberholtzer v. Hazen

61 N.W. 365, 92 Iowa 602
CourtSupreme Court of Iowa
DecidedDecember 14, 1894
StatusPublished
Cited by5 cases

This text of 61 N.W. 365 (Oberholtzer v. Hazen) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oberholtzer v. Hazen, 61 N.W. 365, 92 Iowa 602 (iowa 1894).

Opinion

Deemer, J.

There are fifty-four assignments of error in this case, but they may all be grouped under five heads: First. Alleged error in the admission and rejection of testimony; second, failure to give instructions asked; third, error in the instructions given; fourth, refusal of the court to set aside the special findings of the jury; and fifth, error in the court in refusing to instruct for defendant.

[604]*6041 2 3 4 [603]*603I. Under the first head counsel have argued a great many questions presented by the record in the admission and rejection of testimony, to some of which, [604]*604only, we will refer, the others either not being of sufficient importance to demand consideration, or, clearly, not prejudicial. The plaintiff was a witness m his own behalf, and testified that the note given him by O. M. Oberholtzer had not been paid to him. He was then interrogated, upon cross-examination, as to whether it had been paid to others for him, and objections were sustained to such questions', because not cross-examination. Strictly speaking, the questions were not cross-examination, but the witness elsewhere stated he did not know the amounts which had been paid others. The other persons to whom payments were made were upon the stand, and gave in detail the amounts received by them. So, if answers should have been permitted, the ruling is clearly without prejudice. One H. R. Oberholtzer, a witness for the defense, was asked on cross-examination, how much time O. M. Oberholtzer put in about the business, and an objection to the question was sustained. It was not cross-examination; and, even if it were, the whole matter was fully brought out by other witnesses, and no prejudice resulted. The same witness was asked why the business-of O. M. Oberholtzer did not pay, and objection was sustained thereto. He afterward answered the question by saying he did not know why. Witness Howe was asked as to who seemed to be the financial manager of the business while he was around, and objection was sustained to this. The ruling was clearly correct, for it called for a conclusion of the witness. This witness detailed all he saw of the management of the business, and it was for the .jury to say who the manager was. An invoice taken of the stock after it had been taken by plaintiff on his mortgage was offered in evidence by plaintiff, and was admitted by the court, simply to identify the goods, and not as proof of value. Defendant objected to it because it [605]*605was incompetent to prove value. It is sufficient to say, in this connection, that the court, in admitting it, expressly ruled that it was not admissible for that purpose. Defendant offered in evidence a’ sworn answer filed by plaintiff in an action against him in the district court, wherein he was seeking to avoid liability on a certain guaranty by saying that the person to whom he referred was not O. M. Oberholtzer. It is manifest that such fact, if shown, would throw no light upon the issues in this case. First, because it is not shown when the answer was made (if made after the making of the mortgage in suit, it was entirely immaterial); and second, if made before, we know of no rule which would make it material to the issues presented, except for impeaching purposes, and it was not so offered.

[606]*606 5 6

[607]*6077 [605]*605II. The first instruction asked by defendant was a peremptory one to return a verdict for him. We will have occasion hereafter to refer to this, and will now consider others asked. The other instructions asked by the defendant,‘defining what circumstances amounted to badges of fraud, and explaining the burden of proof, were, so far as correct, given by the court in its charge to the jury. .And the questions presented are nearly all determined by the ease of Allen v. Kirk, 81 Iowa, 658, 47 N. W. Rep. 906, adversely to appellant. The court, in effect, instructed the jury that if, in executing the mortgage to plaintiff, C. M. Oberholtzer intended thereby to hinder or delay or.to defraud his creditors, the burden would rest on plaintiff to show that the note and mortgage were executed and delivered to him for a valuable consideration; but, if executed for a valuable consideration, yet if O. M. Oberholtzer intended thereby to hinder, delay, or defraud existing creditors, and plaintiff participated or assisted therein, then the mortgage would be fraudulent. The court further instructed that, if plaintiff had a valid claim against C. M. Ober-' holtzer, he had a right to secure it, even though he took [606]*606all of O. M. Oberholtzer’s property; that the burden was upon the defendant to establish the fraud pleaded by him; and gave the following with reference to badges or fraud: “Twelfth. There are in law certain matters which are sometimes termed ‘badges of fraud;’ that is, matters which, if shown, are usually considered as evidence tending to show fraud. Among these are unusual or extraordinary methods of conducting business, if shown. Any secrecy or concealment in said business, if shown, or any other unusual methods or acts connected with the transactions in question, if shown by the evidence, are proper to be considered in deciding whether fraud in fact existed in connection with said transaction.” The defendant asked the following instruction: “(2) Transactions between relatives, where creditors’ interests are involved, are closely scrutinized, and, where the transaction shows anything out of the usual course of business, it is incumbent upon the parties claiming under such conveyance to show clearly and satisfactorily that the transaction was bona fide, in good faith, and based on sufficient consideration.” It is no doubt true that transactions between relatives, where creditors’ interests are involved, should be closely scrutinized. But mere relationship, alone, is not a badge of fraud which calls for explanation. Bump, Fraud. Con., p. 54; Wait, Fraud. Con., sec. 242; Allen v. Kirk, supra. Does the fact that a transaction between relatives, which shows anything out of the usual course of business, change the burden of proof so as to cast upon the grantee or mortgagee the burden of showing clearly and satisfactorily that the transaction was bona fide, in good faith, and for valuable consideration? We think not. As a general rule, when a conveyance is attacked, the burden of proof, where the instrument is valid on its face, rests upon the creditor to show a fraudulent intent or absence of consideration. [607]*607Wait, Fraud. Con., sec. 271, and cases cited. A badge of fraud does not constitute, fraud in itself, but is simply evidence of fraud, — a means of establishing a fraudulent intent. Bump, Fraud. Con. 33. This instruction was correctly refused, as were others asked by appellant which announced the rule that, upon proof of certain badges of fraud, the burden shifted to appellee to prove, not only a consideration for the mortgage, but its Iona fides as well.

III. What we have said with reference to the instructions refused disposes of the questions raised with reference to the instructions given. We have examined them all with care, and find no error in them.

8 IY. The claims that the special findings are not supported by the testimony, and that the court should have directed the jury to have returned a verdict for him, may be disposed of under one head.

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Bluebook (online)
61 N.W. 365, 92 Iowa 602, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oberholtzer-v-hazen-iowa-1894.