5 S.D. 246 | S.D. | 1894
This is an appeal from an order of the circuit court of Lawrence county discharging an attachment. The grounds of the motion to discharge were: First, that the allegations of the attachment were untrue; and, second, that no sufficient undertaking was given, it not being required by the plaintiff. Section 4996, Comp. Laws, requires that, before an attachment can issue, the clerk must require a £ ‘written under
The other ground of the motion was the untruthfulness of the affidavit upon which the attachment was issued. These allegations were that “the defendants have assigned and disposed of, and are about to assign and dispose of, their property, with intent to defraud their creditors.”- We think the following facts are practically undisputed: Gardiner and Bailey were partners having two stores, one at Deadwood and the other at Custer City, the business of each being distinct from that of the.other. On the 3d day of May, 1892, they gave a mortgage on their Custer City stock to the First National Bank of Custer
It is contended by appellant that, although the mortgage contained no provision or stipulation allowing the mortgagors to retain possession and sell in the ordinary course of trade without applying the proceeds to the mortgage debt, still, it being established that the goods were so sold with the knowl- and acquiescence of the mortgagee, the effect is the same as though such permission were in the mortgage itself. Allowing this conclusion to be entirely correct, the mortgage was presumptively fraudulent only. The mortgage does not stipulate, nor does the evidence, as we will notice later, show, that the mortgagors were to be, or were, allowed to dispose of the mort
Nor do we think the giving of a mortgage to secure $1,790 on a stock of goods worth $10,000 was, alone, any evidence of a fraudulent intent. Defendants had a right to give a mortgage to reasonably secure their indebtedness to the bank. It would have been impracticable to give it on an undivided portion of the stock, and equally on certain enumerated articles. It is doubtful if, under the law of this state, any margin, however large, between the debt and the security, would be a badge of fraud. By Section 4658, Comp Laws, “a creditor can avoid the act or obligation of his debtor for fraud only where the fraud obstructs the enforcement by legal process of his right to take the property affected by the transfer or obligation;” and Sections 4388 and 4389 definitely declare that the creditor may enforce his right notwithstanding the mortgage, and provide
There was considerable evidence tending to show (and nothing to the contrary) that, from the time the mortgage was made until it was filed, there was nothing drawn from the stock by either of the defendants, and that no part of the proceeds of sales, during that time, was used for the benefit of either. It was shown on the part of plaintiff, by the testimony of defendants’ bookkeeper, that from the 6th day of May, the date of the mortgage, to the 24th, the date of its filing, the cash sales from the stock amounted to $699.25, and from collections $1,659.08. The mortgage did not cover the credits and accounts of the de fendants (mortgogors), and the mortgagee could not control, and was not responsible for, the disposition of collections therefrom. The bookkeeper testified: “The cash taken was paid for merchandise and expenses, and deposited in the bank. The money, except what was deposited, all went to pay accounts of the store and expenses. We paid cash for produce daily; paid out as high as $6 for butter one day. The rest of the money was all used this way. All the things bought with .the money were placed in the store and used there.” Defendants kept their Deadwood account with the' First National Bank of that city. At the date of the mortgage they were overdrawn at that bank from $600 to $700. On the 24th, when the mortgage was filed, they had a credit there of $464.33, but the overdraft was not necessarily paid from sales of the mortgaged stock. Of the $699.25 resulting from sales of the mortgaged stock, there was in the bank, to the credit of the mortgagors, $464.33, leaving