Work Bros. & Co. v. McCoy

54 N.W. 140, 87 Iowa 217

Opinion

Given, J.

swer to amend-motion to strike. — I. The appellant’s first complaint is of the ruling striking parts of his answer to the amended petition. That he took the chattel mortgage m good faith was already m issue under the denials m the answer. His good faith m taking and foreclosing the mortgage was only questioned upon the ground that there was a conspiracy. If there was no conspiracy as charged, then the mortgage and its foreclosure was valid. The foreclosure was stated to show the consummation of the alleged conspiracy, and not that it was void because of any irregularities. The plaintiffs’ right to a personal judgment depended upon whether the partnership of the conspiracy was proved. It was put in issue by the petition and first and second amendments and the answer thereto. The allegation stricken out is a statement of a conclusion of law, and not of facts.

property taken under oper II. The statement of a further counterclaim on account of the receiver taking the property shows that the receiver , was appointed by the court, That a receiver was appointed by the court upon the application of the plaintiffs and others is no ground for recovering damages. In the absence of an allegation to the contrary, we must presume that the property, or the proceeds thereof if disposed of as perishable, is in the hands of the court or its receiver, for whoever may be found entitled to it. The receiver’s taking the property was no conversion of it. There was no error in the ruling.

3‘ deSamions of co-eonspir-ators: order of testimony. III. The court admitted, over the appellant’s objections, certain declarations of McCoy, and certain letters and documents written by him. Most of these were admitted under the . . , issue Of Conspiracy. The appellant COU-r J . . tends that there was not even prima jacte evidence of a conspiracy, and hence the evidence was inadmissible. In State v. Grant, 86 Iowa, 216, this court held as follows: “The general rule undoubtedly is that a prima facie case of conspiracy must be made before evidence of the acts and declarations of the alleged conspirators can be introduced. But it has been found necessary to modify this rule, and it is now quite common to permit evidence of acts and declarations to be first introduced. This would certainly be proper where, as in the case at bar, the state promised in the further progress of the trial to introduce evidence to prima facie establish a conspiracy. 1 Greenleaf on Evidence, 111; 2 Wharton on Criminal Law [8 Ed.], 1401; 4 Am. and Eng. Encyclopedia of Law, pages 635, 636. The matter of requiring prima facie proof of the conspiracy prior to the admission of evidence of acts and declarations of the conspirators is a matter largely in the discretion of the court.” As said in Miller v. Dayton, 57 Iowa, 423: “The proof of the combination must, of necessity, almost always be extracted from circumstances connected with the transaction."

The declarations and documents admitted are 'somewhat numerous, and it is not practicable that we '.'here discuss them in detail. It is sufficient to say that, In view of the evidence that‘preceded, we think this evidence was properly admitted under the rule requiring prima facie evidence of conspiracy to be first introduced. The court instructed specifically that, unless the jury found the conspiracy they should not consider this evidence as against the appellant, and that the conspiracy could not be established by the acts or ■ declarations of McCoy alone.

obtain credit: IV. Among the documents admitted as above was .-a sworn statement of assets and liabilities made by McCoy to a firm in St. Joseph, Missouri, tor the purpose of obtaining credit. The contention is that this statement was not 'to the plaintiffs, and not known to them; that they were not influenced by it in giving credit to McCoy, .and therefore it was immaterial. The plaintiffs were not limited to facts known to them at the time of extending credit in proving the conspiracy; indeed, if they had then known there was á' conspiracy, it is not ■probable any credit would have 'been given. The admissibility of this statement did not depend upon whether the plaintiffs knew of it or were influenced by it at the time of giving credit; it was admissible under ■the issue of conspiracy.

_: action for evidence fad-: missions. V. Mr. Thomas was permitted to testify that .McCoy admitted the account sued upon to be correct. The appellant contends that this was improperly admitted as against him. The issue of copartnership was submitted to the jury, and, clearly, if a copartnership had been .found, this admission would be admissible against the ^appellant. Therefore there was no error in admitting it. The question of conspiracy was also submitted. It was McCoy who ordered the goods, and knew what was received. If they were received in furtherance of* the alleged conspiracy, McCoy’s declarations concerning them were admissible against both, and were evidence of the amount the plaintiffs were entitled to recover. When a copy of the book of original entries is admitted to be correct, it is not required that the books'be produced; the copy, by virtue of the admission, becomes competent evidence. We have examined the appellant’s contentions on this branch of the case in detail, and do not find any prejudicial errors in admitting evidence.

6. —; at-righttopérment.'l'ias VI. The court instructed the jury that, if they found that a conspiracy was formed and carried out as alleged, they should find for the plaintiffs. The appellant contends that the conspiracy must have resulted in damage to the appellees to entitle them to recover, and that this element was omitted from the instructions; that in fact the appellees were not damaged by the alleged conspiracy, for that they held largely more property under their attachment than was required to pay their claim ; also that they were not damaged by the conspiracy, for that they had no interest in or lien upon the goods at the time that they were mortgaged to, or at the time they were purchased by, the appellant at the foreclosure sale, their debt not then being due, and no attachment having been levied.

The appellant cites and largely relies upon Adler v. Fenton, 24 How. (U. S.) 407. In that case the plaintiffs, Fenton et al., had sold goods to Adler & Scheff on their own credit, and, after receiving the goods, Adler & Scheff conspired with their codefend-ants to conceal their property from their creditors by making an assignment thereof to their codefendants. Plaintiffs attached sufficient property of Adler & Scheff to satisfy their debt, and then brought this action, charging that by means of said fraudulent acts they “suffered vexation and expense, and finally incurred the loss of their debt.” The court, in conclusion, held as follows: “In the absence of .special legislation, we may safely affirm that a general creditor can not bring an action on the case against his debtor, or against those combining and colluding with him to make dispositions of his property, although the object of those dispositions be to hinder, delay and defraud creditors.” The distinction between that case and this is apparent. In that, the defendants had not conspired, as in this, to fraudulently induce the plaintiffs to extend credit. The wrong complained of was the assignment of the property over which Adler & Scheff had the full right of disposition. The wrong here complained of is obtaining the plaintiff’s goods on credit to McCoy, who was insolvent, by means of the conspiracy. In Adler’s Case the court says: “To enable the plaintiffs to sustain an action on the case like the present, it must be shown that the defendants have done some wrong; that is, have violated some right of theirs, and that damage has resulted as a direct and proximate consequence from the commission of that wrong.” The plaintiffs having no rights in the property assigned, the assignment violated no right of theirs. In this case it was the right of the plaintiffs not to be fraudulently deceived as to the solvency of McCoy, and it is this right that was violated by the conspiracy. By conspiring to get the property of the plaintiffs in the manner alleged, Lord, as well as McCoy, became primarily liable. The correctness of the account sued upon was not disputed in the evidence. There was no conflict as to the amount, and the court had the right to accept the undisputed fact in giving instructions. That the plaintiffs have attached sufficient property to satisfy their debt is no reason why they are not entitled to personal judgment against the appellant. He is, as we have said, primarily liable, and subject to a judgment, the same as McCoy. The property attached is claimed by the appellant, and whether it is his or McCoy’s, it is alike subject to be applied upon the judgments against them. A payment by either, or by the application of the property of either or both, will be a satisfaction' of the judgments, so far as the plaintiffs are concerned. We have seen that the plaintiffs’ right to recover does not rest on any rights they had in the property mortgaged to the appellant, but because of the fraudulent conspiracy by which the plaintiffs were induced to part with their goods. Our statute authorized the bringing of this action as it was brought, though the debt was not then due, and the fact that it was not then due affords no protection to the appellant. We see no error in instructions 9 and 10, complained of.

VII. The appellant complains of the following instruction: “And you are further instructed in this connection that the alleged conspiracy can not be established on what the said McCoy might have said, done, or written alone, but there must be other evidence, which may be shown by facts and circumstances showing the conspiracy, before what the said McCoy might have said, done, or written can be considered by you as evidence against said Lord.” The complaint is against the use of the word “alone.” As it takes two or more to form a conspiracy, the words or acts of one will not establish it. There must be other evidence than that of McCoy, showing that Lord was a party to the alleged conspiracy. We seo no error in this instruction.

7>_. sufflci. dfnoenfsnp-portverdicc. VIII. The appellant’s remaining contention is that the court erred in overruling his motion for a new trial as to the third, fourth, and fifth grounds thereof, namely, that the verdict contvary to the law and evidence. The verdict is based alone upon the finding of the alleged conspiracy. If it was for this court to determine whether the alleged conspiracy was established, we might hesitate to find that it was. That question was fairly submitted to the jury, and we can not say, in the face of this record, that their finding is without support in the evidence. While we do not attempt a discussion of the evidence, we mention, as among the facts supporting the verdict, the following: The appellant sold the property to McCoy, whom he knew to be insolvent, on credit, and without any security. He knew the necessity of security then as well as he did afterwards, but withheld taking it until McCoy had added largely to the stock merchandise purchased on credit. With some knowledge, at least, of these additions, the appellant increased the debt to him by a loan of five hundred dollars to McCoy, and then took a mortgage upon the whole stock. If the jury believed, as they had a right to, that the transaction was to get the goods purchased,, from the plaintiffs and others, and make them the property of the appellant, they were warranted in their finding and' verdict.

' Our conclusion is that the judgment of the district court should be affirmed.