{ "id": 5257691, "name": "McNeil & Higgins Co. v. Plows & Co.", "name_abbreviation": "McNeil & Higgins Co. v. Plows & Co.", "decision_date": "1899-06-12", "docket_number": "", "first_page": "186", "last_page": "192", "citations": [ { "type": "official", "cite": "83 Ill. App. 186" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "64 Ill. 181", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5308828 ], "opinion_index": -1, "case_paths": [ "/ill/64/0181-01" ] }, { "cite": "68 Ill. 17", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2629920 ], "opinion_index": -1, "case_paths": [ "/ill/68/0017-01" ] }, { "cite": "49 Ill. 62", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2602008 ], "opinion_index": -1, "case_paths": [ "/ill/49/0062-01" ] }, { "cite": "48 Ill. 323", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5229947 ], "weight": 2, "opinion_index": -1, "case_paths": [ "/ill/48/0323-01" ] }, { "cite": "47 N. W. Rep. 347", "category": "reporters:state_regional", "reporter": "N.W.", "opinion_index": -1 }, { "cite": "53 Ill. App. 119", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 858498 ], "opinion_index": -1, "case_paths": [ "/ill-app/53/0119-01" ] }, { "cite": "53 Ill. App. 392", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 858484 ], "opinion_index": -1, "case_paths": [ "/ill-app/53/0392-01" ] }, { "cite": "111 Mass. 273", "category": "reporters:state", "reporter": "Mass.", "case_ids": [ 2112971 ], "opinion_index": -1, "case_paths": [ "/mass/111/0273-01" ] }, { "cite": "131 Ill. 526", "category": "reporters:state", "reporter": "Ill.", "opinion_index": -1 }, { "cite": "75 Ala. 363", "category": "reporters:state", "reporter": "Ala.", "case_ids": [ 8492317 ], "opinion_index": -1, "case_paths": [ "/ala/75/0363-01" ] }, { "cite": "105 U. S. 100", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3496110 ], "opinion_index": -1, "case_paths": [ "/us/105/0100-01" ] }, { "cite": "131 Ill. 520", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5417378 ], "opinion_index": -1, "case_paths": [ "/ill/131/0520-01" ] }, { "cite": "36 Fed. Rep. 134", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6727805 ], "opinion_index": -1, "case_paths": [ "/f/36/0134-01" ] }, { "cite": "50 Ill. App. 476", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5121662 ], "weight": 2, "opinion_index": -1, "case_paths": [ "/ill-app/50/0476-01" ] }, { "cite": "156 Ill. 44", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3023892 ], "opinion_index": -1, "case_paths": [ "/ill/156/0044-01" ] }, { "cite": "22 Pac. Rep. 447", "category": "reporters:state_regional", "reporter": "P.", "opinion_index": -1 }, { "cite": "22 Pac. Rep. 444", "category": "reporters:state_regional", "reporter": "P.", "opinion_index": 0 }, { "cite": "30 N. E. Rep. 952", "category": "reporters:state_regional", "reporter": "N.E.", "opinion_index": 0 }, { "cite": "164 Ill. 181", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5502673 ], "opinion_index": 0, "case_paths": [ "/ill/164/0181-01" ] }, { "cite": "156 Ill. 25", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3023963 ], "opinion_index": 0, "case_paths": [ "/ill/156/0025-01" ] }, { "cite": "75 Ala. 363", "category": "reporters:state", "reporter": "Ala.", "case_ids": [ 8492317 ], "opinion_index": 0, "case_paths": [ "/ala/75/0363-01" ] }, { "cite": "105 U. S. 100", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3496110 ], "opinion_index": 0, "case_paths": [ "/us/105/0100-01" ] }, { "cite": "131 Ill. 520", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5417378 ], "opinion_index": 0, "case_paths": [ "/ill/131/0520-01" ] }, { "cite": "36 Fed. Rep. 134", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6727805 ], "opinion_index": 0, "case_paths": [ "/f/36/0134-01" ] }, { "cite": "50 Ill. App. 476", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5121662 ], "opinion_index": 0, "case_paths": [ "/ill-app/50/0476-01" ] }, { "cite": "156 Ill. 44", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3023892 ], "opinion_index": 0, "case_paths": [ "/ill/156/0044-01" ] } ], "analysis": { "cardinality": 611, "char_count": 12608, "ocr_confidence": 0.592, "pagerank": { "raw": 1.4975956836136062e-07, "percentile": 0.6646609512755377 }, "sha256": "e1f2da81dfaa1f7e879b6fe6db3a6acb74e44f7e52fb0d3bcf99702b1ae759d8", "simhash": "1:970838b6281a96d6", "word_count": 2185 }, "last_updated": "2023-07-14T18:22:35.373210+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "McNeil & Higgins Co. v. Plows & Co." ], "opinions": [ { "text": "Mr. Presiding Justice Windes\ndelivered the opinion of the court.\nThe only question presented is whether there was sufficient evidence of actual fraud to have required the submission of the case to the jury. In order to sustain an attachment under our statute there must be shown actual fraud, or fraud in fact, as distinguished from constructive fraud. Weare v. Druley, 156 Ill. 25, and cases cited.\nBut such actual fraud may be proven by facts and circumstances from which the inference of fraud would be natural and probable, and would be presumed. The mind should be convinced from the proof that the fraud charged had been perpetrated, although there might remain some doubt. Schumacher v. Bell, 164 Ill. 181-3, and cases cited.\nIn Sternbach v. Leopold, 50 Ill. App. 476-94, in which there was a question as to whether fraud in fact was shown, this court, while it held that the evidence in the record was insufficient to show fraud in fact, quoted with approval from the Supreme Court of Indiana in Hutchinson v. First Nat. Bank, 30 N. E. Rep. 952, citing many cases, viz.:\n\u201cWe are satisfied that an agreement for the withholding of a mortgage from the record is not of itself sufficient to justify a court in holding, as a matter of law, such mortgage fraudulent and void as to creditors, either existing or subsequent, but that it is a badge of fraud, to be considered with all the other facts and circumstances surrounding the transaction, in determining whether or not there was in fact a fraudulent intent.\u201d\nThe case was affirmed by the Supreme Court (Haas v. Sternbach, 156 Ill. 44-55), in which it is said :\n\u201cWhile the unsworn answer of Henry Leopold sets up conversations between himself and Charles Sternbach relative to\u2019 keeping-the mortgage off record and concealing it from others, which, if true; would establish a wicked conspiracy to defraud creditors by giving a false credit to himself and his firm, his own testimony does not support these allegations.\u201d\nFrom an examination of the \u00e1bstract and of the answer referred to in that case in this court, we find statements which make the case in point of fact quite similar to the case at bar, and we regard the language of the Supreme Court, when considered with reference to the statements of the answer, as deciding that where a party takes a mortgage and keeps it off record in order to support the credit of the maker, upon the condition or agreement that the maker shall keep him informed of his affairs, so that if any trouble is likely to arise with the maker\u2019s creditors the grantee can place his mortgage upon record, such a transaction is a fraud in fact. See also Weber v. Mick, 131 Ill. 520-6.\nIn Wait on Fraudulent Conveyances, Sec. 234, the author says that an agreement that \u201c the transaction is to be kept secret until the debtor has an opportunity of escaping beyond the reach of process used by bis other creditors, or by which the deed is not to be offered for record until the other creditors threaten suit, will render it fraudulent. Secrecy in such cases is a part of the consideration; the transaction is contaminated by it, and ought not to be regarded as bona fide.\" The statement of the author is supported in principle by the following cases, viz.: Farguson v. Johnston, 36 Fed. Rep. 134; Blennerhassett v. Sherman, 105 U. S. 100-117; Seals v. Robinson, 75 Ala. 363-72; Stockgrowers Bank v. Newton (Colo.), 22 Pac. Rep. 444.\nIn the Newton case, supra, the court holds that where the conveyance is withheld from the record, \u201c so that it may not affect the financial standing of the grantor, the evidence of fraudulent intent becomes express.\u201d So, in the case at bar, the evidence being that there was an agreement between Richter and appellee that the bill of sale was to be kept secret, and that in case other creditors should push their claims and that the party holding it in escrow should be notified of any danger in that regard he should turn it over to Richter and he should take\" possession under it, also that there Was an agreement between appellee and Bartlett\u2019s agent that if appellee\u2019s creditors attempted to push their claims he should be notified immediately so that the Bartlett mortgage might be placed on record, and that the mortgage was given only upon that express understanding between the parties, and also that during all this time appellee was insolvent, we are of opinion these facts and circumstances tended to show actual fraud, and the question as to whether this evidence did or did not show fraud in fact should have been submitted to the jury.\nThe judgment on the attachment is therefore reversed and the cause remanded.", "type": "majority", "author": "Mr. Presiding Justice Windes" } ], "attorneys": [ "Flower, Smith & Musgrave, attorneys for appellant.", "Milford J. Thompson, attorney for appellee." ], "corrections": "", "head_matter": "McNeil & Higgins Co. v. Plows & Co.\n1. Attachment\u2014Fraudulent Conveyance of Property\u2014Proof.\u2014In order to sustain an attachment where the grounds relied upon are that defendant within two years fraudulently conveyed his effects so as to hinder and delay his creditors, actual fraud, or fraud in fact, as distinguished from constructive fraud, must be shown.\n3. Fraud\u2014As Grounds for Attachment\u2014Proof.\u2014Actual fraud may be proven by facts and circumstances from which the inference of fraud would be natural and probable, and would be presumed. The mind should be convinced from the proof that the fraud charged had been perpetrated, although there might remain some doubt.\n3. Fraudulent Conveyances\u2014 Where Secrecy is a Part of the Consideration.\u2014Where an agreement is made that \u201c the transaction is to be kept secret until the debtor has an opportunity of escaping beyond the reach of process used by his other creditors, or by which the deed is not to be offered for record until the other creditors threaten suit, will render it fraudulent. Secrecy, in such cases, is a part of the. consideration, and transactions contaminated by it ought not to be regarded as bona fide.\n4. Same\u2014Where a Conveyance is Withheld from the Record.\u2014Where the conveyance is withheld from the record, so that it may not affect the financial standing of the grantor, the evidence of fraudulent intent becomes express.\nAssumpsit.\u2014Attachment in aid. Trial in the Circuit Court of Cook. County: the Hon. John C. G-arver, Judge, presiding. Finding and judgment for defendant on the attachment issue; appeal by plaintiff.\nHeard in this court at the October term, 1898.\nReversed and remanded.\nOpinion filed June 12, 1899.\nStatement of the Case.\u2014Appellant begun suit in assumpsit against appellee, a corporation, January 15, 1898, for merchandise and goods sold and delivered to appellee at its request, and on the same day an attachment in aid was issued and levied on certain personalty. The grounds of the attachment were that \u201c said defendant has, within two years last past, fraudulently conveyed or assigned its effects, or a part thereof, so as to hinder and delay its creditors,\u201d and that \u201c said defendant has, within two years last past, fraudulently concealed or disposed of its property so as to hinder and delay its creditors, and is about fraudulently to sell, assign or otherwise dispose of its property or effects so as to hinder and delay its creditors.\u201d\nPlaintiff had judgment by default on the merits for $899.63, but a plea was filed traversing the facts alleged in the affidavit for attachment. At the close of the plaintiff\u2019s evidence, on a. trial of this issue before the court and a jury, on motion of defendant, the court instructed the jury to find the attachment issue for defendant, which Avas done, and a judgment was rendered on the verdict, from Avhich this appeal is taken.\nThe evidence shows that in April, 1897, the defendant Avas largely insolvent, and during all the period of time involved in the evidence, or covered by the transactions brought in question in this case, the defendant was insolvent; that on the 28th of April, 1897, the defendant Avas indebted to one Eichter in the sum of $3,000, being an unpaid balance of a loan of $5,000; and that on that day the defendant executed to Eichter a bill of sale of all its stock, fixtures and utensils located in the candy department and stock room of PIoavs & Co., at 263 State street, Chicago, Illinois, worth $4,200; that by agreement between Eichter and the officers of the defendant, this bill of sale was left with one Edward Glickauf in escrow, and a resolution of the board of directors was duly adopted providing therefor, and it was agreed further that the existence of this bill of sale should be kept secret, and that in case of any danger to Mr. Eichter by reason of any other creditors of Plows . & Go. pushing their claims, or trying to force things, Mr. Eichter was to be handed these documents and take possession of Plows &' Co.\u2019s goods, etc., at the Eothschild\u2019s store, 263 State street, Chicago; that the officers of the defendant agreed to notify Glickauf, who held the bill of sale in escrow, of any danger, and he was then to turn the papers over to Mr. Eichter; that the indebtedness secured in this manner was finally fully paid in October, 1897, out of the proceeds of sale of the department at Eothschild\u2019s; that in April, 1897, the defendant company negotiated a loan from one Stephen L. Bartlett, of the sum of $5,000, to be secured by chattel mortgage, and upon the presentation of this document to the president, Hopkins, he refused to sign the same, unless it was agreed that it should be held off from the record, or held in escrow, and Hopkins also testified that he was afterward given the assurance that Bartlett, the mortgagee, had agreed to that, and that he signed the note and mortgage on those conditions; that they were to be held in escrow, himself, Mr. Brown and Mr. McQuiston (two other directors and officers of the defendant corporation) assuring Mr. Cutter, Bartlett\u2019s agent, \u201c that in event of any of Plows & Co.\u2019s creditors attempting to push their claims, which would be liable to force an issue, that he would be notified immediately, that these papers might be placed on record to protect Mr. Bartlett;\u201d that this was consented to on the part of Bartlett and his agent, and the papers were thereupon delivered.\nThe president of the company testified, in respect to the bill of sale given to Eichter, that it was agreed \u201cthat in' case any of Plows & Co.\u2019s creditors attempted to take possession, or bring any suits which were liable to invalidate Richter\u2019s claim, he would be notified,\u201d and \u201c that Hr. Richter and the man who held it in escrow were asked to keep it secret and not to file it for record.\u201d\nThe evidence further shows that the plaintiff (appellant) was first informed of these transactions on the day before it issued its attachment, and that all of the goods sold by plaintiff to defendant had been sold subsequent to the first of Hay, 1897; that is, all the goods had been sold without any knowledge of either of these transactions. The \u00a75,000 mortgage to Bartlett was placed on record the same day the attachment was begun, to wit, January 15, 1898, at 3:30 p. m., whether before or after the attachment does not appear.\nFlower, Smith & Musgrave, attorneys for appellant.\nAn agreement to keep a security secret and to use it only when other creditors seek to enforce their claims, coupled with an agreement by the debtor to advise the holder of the security in case any other creditors should push their claims, is within the express terms of the statute, the necessary effect being to hinder and delay such other creditors. Hurd\u2019s Stat. 1897, p. 1875, Sec. 1, Cl. 7; Stockgrowers Bank v. Newton, 22 Pac. Rep. 447; Haas v. Sternbach, 156 Ill. 44; Sternbach v. Leopold, 50 Ill. App. 476; Farguson v. Johnston, 36 Fed. Rep. 134; Weber v. Mick et al., 131 Ill. 520; Blennerhassett v. Sherman, 105 U. S. 100.\nIt being proven that the defendant procured from the grantees in the bill of sale and chattel mortgage an agreement that the instruments should be kept secret unless other creditors should attempt to push their claims, the intent of the defendant in making the documents was a question for the jury. Sternbach v. Leopold, 50 Ill. App. 476; Seals v. Robinson, 75 Ala. 363 (372);. Weber v. Mick, 131 Ill. 526; Folsam v. Clemence, 111 Mass. 273 (277); Silvis v. Oltmann, 53 Ill. App. 392; Home Ins. Co. v. Field, 53 Ill. App. 119; Edison v. Hudson, 47 N. W. Rep. 347; Reed v. Noxon, 48 Ill. 323.\nWhile fraud must be proven, nevertheless, it is proven when facts and circumstances are shown by the evidence from which the inference of fraud is natural and irresistible. Reed v. Noxon, 48 Ill. 323; Bullock v. Narrott, 49 Ill. 62; Draper v. Draper, 68 Ill. 17; Schumacher v. Bell, 64 Ill. 181\nMilford J. Thompson, attorney for appellee." }, "file_name": "0186-01", "first_page_order": 190, "last_page_order": 196 }