BRACE, P. J.
By general warranty deed dated December 26, 1895, and on the same day duly acknowledged and filed for record at five o’clock and three minutes p. m., Morris Reiss and wife conveyed a tract of land containing three acres, described in the petition, to Joseph Lorie. By a deed of trust of the same date, on the same day duly acknowledged and filed for record at six o’clock and ten minutes p. m., the said Reiss conveyed all of his goods, wares and merchandise, consisting of a stock of liquors, together with the fixtures and furniture in his storeroom at 603 Delaware street, Kansas City, Missouri, to Sigmund Harzfeld in trust to secure the payment of certain debts therein described to several of his creditors therein named.
Afterwards, on the twenty-eighth of December, 1895, Samuel N. Weil & Company, The Corning Company and Kate J. Rosenham, creditors of the said Reiss who were not secured by said deed of trust, instituted suits by attachment against said Reiss, which on the same day were duly levied on said real estate, and thereafter, on the tenth of January, 1896, the said Samuel N. Weil & Co. instituted this suit against the said Morris Reiss, Joseph Lorie, The Coming Company and Kate J. Rosenham, to set aside and annul said warranty deed from Reiss and wife to Lorie, ón the ground that the same was without consideration, and executed for the purpose of hindering, delaying and defrauding the creditors of the said Reiss. The answers of the defendants Reiss and Lorie were a general denial. The answers of The Corning Company and Mrs. Rosenham were each a cross-bill setting up, respectively, their claims, and for like cause a joinder in the prayer of the petition. On the hearing, the plaintiff’s bill, and the cross-bills of the defendants, The Corning Company and Mrs. Rosenham, were dismissed and from the judg[129]*129ment rendered accordingly, Samuel N. Weil & Company, The Corning Company and Kate J. Rosenham appeal. The trial court held that while the evidence was sufficient to- sustain the charge of fraud as to Reiss it was insufficient as to Lorie, whom the court found to be an innocent purchaser for value. The only ground urged for reversal, is that the court erred in holding on the evidence that Lorie was an innocent purchaser.
(1) The evidence tended to prove that the tract of land in question was worth from $900 to $1,000. That sometime in the latter part of the fall of 1895, the attention of Lorie was called to this tract of land by a Mr. Lietenberg, who told him it belonged to Reiss, and ashed him if he wanted to buy it. That in pursuance of this suggestion he called on Reiss the next day, ascertained his price, got a description of the property, and told Reiss he would look it up, and might buy i!. Thereafter Lorie examined the tract, consulted with his real estate agent Mr. Phelps as to the value of it, and subsequently made Reiss an offer of $900 for the tract, if Reiss would furnish an abstract of the title, whereupon Reiss told him to order the abstract and he would pay for it. Lorie ordered the abstract, which was completed and delivered to him on the twentieth of December, 1895. ITe thereupon turned the same over to Edwin E. Weil, a young attorney and notary public, a relative of his, and who was living with him, for the purpose of having the same examined and a deed drawn. Weil examined Hie abstract, reported the title all right, and on the twenty-fourth of December drew the deed in question, made an appointment for the parties to meet at his office on the morning of the twenty-sixth of December, to close up the trade, and on that morning on his way from his home to his office called at the Washington Hotel where Mrs. Reiss boarded, obtained their signatures to the deed, took their acknowledgment, and with Mr. Reiss went to his office where they met Mr. Lorie, who gave Mr. Reiss a check on the Metropolita:-. [130]*130National Bank for $900, and Reiss delivered the deed to him. Lorie then handed the deed to Weil with the request that he file it for record, when he went to court. Theréupon the parties separated. This was about nine o’clock a. m. Weil filed the deed for record that day at the hour hereinbefore .stated.
It appears from the evidence that this young man Well •was in partnership with another young lawyer by the name of Silverman, and that they were practicing law under the firm name of Silverman & Weil; that their office, on the fifth floor •of the New York Life building, consisted of one room, with a single door from the public hall, divided into two compartments by a partition running across the room from the door, ■extending from the floor nearly to the ceiling. The entrance from the hall was into Weil’s compartment, thence near the door into Silverman’s.
The evidence further tended to prove that about noon on the twenty-sixth of December, Meyer Stern, a friend of Reiss, came to Silverman in his office, and requested him to- draw the deed of trust in question, and suggested the name of Benjamin E. Joffee as trustee. That after he left, Silverman drew the deed of trust as directed. That about four o’clock p. m. Reiss and Stern came in, when Stem informed Silver-man that Reiss objected to Joffee, and that they had agreed upon Mr. Harzfeld for trustee, thereupon the name of Joffee was erased, and the name of Harzfeld inserted a.3 trustee in the deed, the instrument was then signed by Reiss, acknowledged by him before Andrew E. Gallagher, notary public, delivered to Mr. Silverman, by him submitted to the officers of the Bank of Commerce, the largest preferred creditor, for approval, and afterwards filed for record as hereinbefore stated. Lorie testifies that he knew nothing about Reiss’s financial condition, and first heard of the deed of trust at his club on the night of that day. He was summoned as garnishee in the •attachment suits on the twenty-eighth of December, and his [131]*131check to Reiss was not cashed by the bank until the thirtieth of December. At the time of these transactions Reiss was, and for some time prior thereto had been, insolvent.
The foregoing presents the main features of the case made by the evidence from one standpoint, which must now be considered in connection with the other evidence presenting a different phase of the ease, from another standpoint.
Benjamin E. Joffee, before mentioned, was introduced by the plaintiff as a witness, who testified in substance that he was a liquor dealer, had known Reiss about seven years. That four or five days before the deed of trust was executed, at the instance of Meyer Stem, he had an interview with Reiss in regard to his affairs. That Reiss informed him of his financial condition, what he wanted, to do, and that Silverman & Weil were his attorneys. That after five or six' interviews on the subject, about five o’clock p. m. of the twenty-fifth of December, 1895, Reiss & Silverman came to his place of business, and remained until eight o’clock, during which time it was arranged that Silverman should draw the deed of trust and have it ready by ten o’clock the next morning at Silverman & Weil’s office, where it was to be executed and turned over to him. That in pursuance of a telephone message next morning, he went to Silverman & Weil’s office, arrived there about eleven o’clock, met Reiss and Lorie in the hall, went with them into Silverman’s office. Silverman w'as there and had the deed of trust prepared. That Lorie read it, and whilst, the instrument was being read Julian ILaar came in, soliciting for the Cleveland Orphan Asylum.
Free access — add to your briefcase to read the full text and ask questions with AI
BRACE, P. J.
By general warranty deed dated December 26, 1895, and on the same day duly acknowledged and filed for record at five o’clock and three minutes p. m., Morris Reiss and wife conveyed a tract of land containing three acres, described in the petition, to Joseph Lorie. By a deed of trust of the same date, on the same day duly acknowledged and filed for record at six o’clock and ten minutes p. m., the said Reiss conveyed all of his goods, wares and merchandise, consisting of a stock of liquors, together with the fixtures and furniture in his storeroom at 603 Delaware street, Kansas City, Missouri, to Sigmund Harzfeld in trust to secure the payment of certain debts therein described to several of his creditors therein named.
Afterwards, on the twenty-eighth of December, 1895, Samuel N. Weil & Company, The Corning Company and Kate J. Rosenham, creditors of the said Reiss who were not secured by said deed of trust, instituted suits by attachment against said Reiss, which on the same day were duly levied on said real estate, and thereafter, on the tenth of January, 1896, the said Samuel N. Weil & Co. instituted this suit against the said Morris Reiss, Joseph Lorie, The Coming Company and Kate J. Rosenham, to set aside and annul said warranty deed from Reiss and wife to Lorie, ón the ground that the same was without consideration, and executed for the purpose of hindering, delaying and defrauding the creditors of the said Reiss. The answers of the defendants Reiss and Lorie were a general denial. The answers of The Corning Company and Mrs. Rosenham were each a cross-bill setting up, respectively, their claims, and for like cause a joinder in the prayer of the petition. On the hearing, the plaintiff’s bill, and the cross-bills of the defendants, The Corning Company and Mrs. Rosenham, were dismissed and from the judg[129]*129ment rendered accordingly, Samuel N. Weil & Company, The Corning Company and Kate J. Rosenham appeal. The trial court held that while the evidence was sufficient to- sustain the charge of fraud as to Reiss it was insufficient as to Lorie, whom the court found to be an innocent purchaser for value. The only ground urged for reversal, is that the court erred in holding on the evidence that Lorie was an innocent purchaser.
(1) The evidence tended to prove that the tract of land in question was worth from $900 to $1,000. That sometime in the latter part of the fall of 1895, the attention of Lorie was called to this tract of land by a Mr. Lietenberg, who told him it belonged to Reiss, and ashed him if he wanted to buy it. That in pursuance of this suggestion he called on Reiss the next day, ascertained his price, got a description of the property, and told Reiss he would look it up, and might buy i!. Thereafter Lorie examined the tract, consulted with his real estate agent Mr. Phelps as to the value of it, and subsequently made Reiss an offer of $900 for the tract, if Reiss would furnish an abstract of the title, whereupon Reiss told him to order the abstract and he would pay for it. Lorie ordered the abstract, which was completed and delivered to him on the twentieth of December, 1895. ITe thereupon turned the same over to Edwin E. Weil, a young attorney and notary public, a relative of his, and who was living with him, for the purpose of having the same examined and a deed drawn. Weil examined Hie abstract, reported the title all right, and on the twenty-fourth of December drew the deed in question, made an appointment for the parties to meet at his office on the morning of the twenty-sixth of December, to close up the trade, and on that morning on his way from his home to his office called at the Washington Hotel where Mrs. Reiss boarded, obtained their signatures to the deed, took their acknowledgment, and with Mr. Reiss went to his office where they met Mr. Lorie, who gave Mr. Reiss a check on the Metropolita:-. [130]*130National Bank for $900, and Reiss delivered the deed to him. Lorie then handed the deed to Weil with the request that he file it for record, when he went to court. Theréupon the parties separated. This was about nine o’clock a. m. Weil filed the deed for record that day at the hour hereinbefore .stated.
It appears from the evidence that this young man Well •was in partnership with another young lawyer by the name of Silverman, and that they were practicing law under the firm name of Silverman & Weil; that their office, on the fifth floor •of the New York Life building, consisted of one room, with a single door from the public hall, divided into two compartments by a partition running across the room from the door, ■extending from the floor nearly to the ceiling. The entrance from the hall was into Weil’s compartment, thence near the door into Silverman’s.
The evidence further tended to prove that about noon on the twenty-sixth of December, Meyer Stern, a friend of Reiss, came to Silverman in his office, and requested him to- draw the deed of trust in question, and suggested the name of Benjamin E. Joffee as trustee. That after he left, Silverman drew the deed of trust as directed. That about four o’clock p. m. Reiss and Stern came in, when Stem informed Silver-man that Reiss objected to Joffee, and that they had agreed upon Mr. Harzfeld for trustee, thereupon the name of Joffee was erased, and the name of Harzfeld inserted a.3 trustee in the deed, the instrument was then signed by Reiss, acknowledged by him before Andrew E. Gallagher, notary public, delivered to Mr. Silverman, by him submitted to the officers of the Bank of Commerce, the largest preferred creditor, for approval, and afterwards filed for record as hereinbefore stated. Lorie testifies that he knew nothing about Reiss’s financial condition, and first heard of the deed of trust at his club on the night of that day. He was summoned as garnishee in the •attachment suits on the twenty-eighth of December, and his [131]*131check to Reiss was not cashed by the bank until the thirtieth of December. At the time of these transactions Reiss was, and for some time prior thereto had been, insolvent.
The foregoing presents the main features of the case made by the evidence from one standpoint, which must now be considered in connection with the other evidence presenting a different phase of the ease, from another standpoint.
Benjamin E. Joffee, before mentioned, was introduced by the plaintiff as a witness, who testified in substance that he was a liquor dealer, had known Reiss about seven years. That four or five days before the deed of trust was executed, at the instance of Meyer Stem, he had an interview with Reiss in regard to his affairs. That Reiss informed him of his financial condition, what he wanted, to do, and that Silverman & Weil were his attorneys. That after five or six' interviews on the subject, about five o’clock p. m. of the twenty-fifth of December, 1895, Reiss & Silverman came to his place of business, and remained until eight o’clock, during which time it was arranged that Silverman should draw the deed of trust and have it ready by ten o’clock the next morning at Silverman & Weil’s office, where it was to be executed and turned over to him. That in pursuance of a telephone message next morning, he went to Silverman & Weil’s office, arrived there about eleven o’clock, met Reiss and Lorie in the hall, went with them into Silverman’s office. Silverman w'as there and had the deed of trust prepared. That Lorie read it, and whilst, the instrument was being read Julian ILaar came in, soliciting for the Cleveland Orphan Asylum. That in the conference between Reiss, Silverman, Lorie and witness, it was arranged, that another trustee should be named in the deed and that witness should go out and find cash purchasers for some of the goods. That in pursuance of this arrangement he did go out, and negotiated sales of liquors to Wolfson for $400, and to Baruch for $500. These sales were consummated and the goods paid for at Stern’s office about two o’clock in the after[132]*132noon, Reiss, Stern, Baruch, Wolf son and witness being then present and the goods delivered to the purchaser later, in the evening of that day. The fact of the sale and delivery of these goods and that Joffee figured in these sales is substantiated by other evidence. The fact that Reiss was insolvent, that Joffee and Stern were advised of his financial condition, and that on the twenty-sixth day of December, 1895, as previously arranged between them, they were engaged in disposing of his stock in trade in the manner stated, for the purpose of preferring some of his creditors, defeating others, and securing the proceeds of a part thereof for Reiss’s own use, is well established by the evidence. But, except in the testimony of Joffee as to what transpired in Silverman’s office about eleven o’clock on the morning of the twenty-sixth of December, when as he testified, Lorie, Reiss, Silverman and himself, were there present, and Eugene Haar came in, there is not a particle of evidence tending to prove that Lorie knew anything about Reiss’s financial condition, or had anything to do with or knew anything about the scheme for the disposition of his property. Lorie testified that he was not there, and Reiss and Silverman testified that neither Joffee nor Lorie were there upon that occasion, and Eugene Haar testified that the occasion when he came into Silverman’s office, and saw Lorie- and Joffee there, was on the fourth of December, 1895.' So that, by a great preponderance of the positive evidence Lorie was not there, and had nothing to do with the fraudulent scheme to which Joffee testified, and this conclusion is reinforced by the improbability of the story of Lorie’s connection therewith. There is no reason why he should have been there, or should have taken any part in those proceedings. His business with Reiss had been concluded some two hours before, and thereafter he had no interest whatever in Reiss’s affairs and in the facts of the case no motive can be found for his taking the part assigned to him in Joffee’s testimony. The evidence in the case is voluminous, variant and conflicting. [133]*133We have given all of it mature consideration and rejecting the discredited evidence aforesaid of Joffee as to Lorie. We think the conclusion of the chancellor is well sustained by the preponderance of the evidence, upon which reliance can be placed.
(2) It is contended, however, that although Lorie may not have had any knowledge of Eeiss’s fraudulent purposes when his purchase of the real estate was consummated, yet that Silverman & Weil had such knowledge and their knowledge should be imputed to him. It is but fair to these young men to say that it does not appear from the evidence that Weil had such knowledge, and that the main support of the charge that Silverman had, is the evidence of the discredited witness Joffee. But whatever their knowledge, it is not imputable to Lorie. They were not his agents to negotiate the trade, and did not negotiate it. Lorie in this contest is not seeking to retain the fruits of a contract made by them, but of one made by himself in conducting which Weil was simply employed by him to examine the abstract, report upon the title shown by it, and draw the deed. The case does not fall within the principle of the eases cited by counsel in support of this contention.
(3) Finally it is contended that although Lorie had no knowledge, of Eeiss’s purpose to defraud his creditors, when he gave his check for the purchase money, accepted the deed and placed it upon record on the twenty-sixth of December,, yet as he afterwards on the night of that day learned that Eeiss had made the deed of trust of that day, and was on the twenty-eighth of December summoned,as a garnishee in the attachment proceedings by the unpreferred creditors, and his cheek was in fact not cashed by the bank until the morning of the thirtieth of December, and he made no effort to countermand the check, he ought to be held a participant of Eeiss’s fraud. If after Lorie had given his check to Eeiss, and before he had reason to believe his check had been cashed by the bank it had come to his knowledge that the sale and convey[134]*134anee to him had been made by Reiss for the purpose of defrauding his creditors, or if the facts and circumstances brought to light on the trial of this cause tending to prove that such was the purpose of Reiss, had so come to his knowledge, and he had taken no steps to countermand the check before it was cashed, then the case would have been brought within the principle of the authorities cited in support of this contention. But the facts stated do not so bring it. Lorie had no knowledge of the fact that his cheek had not been cashed before the thirtieth of December, and no reason to believe it had not been cashed in the ordinary course of business within a short time after it was given. The fact that Reiss had executed a deed of trust to some of his creditors, while it advised Lorie that Reiss was in failing circumstances, did not tend to show any fraud upon his part in the transaction Lorie had had with him, or with any one else for that matter, as it is perfectly legitimate for a debtor in failing circumstances to prefer one or more of his creditors in this manner if he sees proper to do so-. The garnishment advised him of no fact tending to show fraud upon the part of Reiss in the transaction with him. On the contrary, its tendency was to show an affirmance thereof. So that when the check was cashed on the thirtieth of December, Lorie was just as ignorant of any fraudulent intent on the part of Reiss in making the sale and conveyance to him; as he was on the twenty-sixth of December when the check was given, and just as ignorant of the material facts disclosed by the evidence on the trial of this cause tending to show such fraudulent intent.
It follows from what has been said that the judgment of the circuit court ought to be affirmed, and it is accordingly so ordered.
All concur.