50 Neb. 687 | Neb. | 1897
In the district court of Hamilton county George M. Boardman confessed a judgment in favor of his mother, Mary T. Boardman, on a promissory note. An execution was issued upon this judgment and levied upon a stock of drugs belonging to George M. Boardman, the stock sold, and thereupon a number of his other creditors, who had obtained judgments against him and whose executions had been returned “No property found,” brought this action to enjoin the sheriff from .paying the proceeds of the sale of said stock of goods to George M. Boardman’s mother. The trial resulted in a decree dismissing the action of the creditors, and they have appealed.
The commercial creditors seek to restrain the sheriff
It seems also to have been insisted in the trial court that the confession of the judgment by young Boardman in favor of his mother Avas fraudulent, as its effect was to enable him to prefer his mother as a creditor. It may be true that young Boardman desired to prefer his mother, and it may be true that she desired to be preferred; and it is probably true that she realized that by her inducing her son to confess a judgment in her favor she would be more likely to secure the payment of her debt; but if she knew these facts, and if her knowledge of the embarrassed financial circumstances of her son prompted her to induce him to confess a judgment in her favor, still all this would not be conclusive evidence of a fraudulent intent on her part. A debtor has the right to prefer one creditor to another if the preference is made and accepted in good faith. And while the evidence shows that young Boardman was willing to prefer his mother, and she was anxious to secure the payment of her debt, and took the step she did for that purpose, still the evidence would not warrant the conclusion that she
Counsel for the appellants, to sustain their contention that Mrs. Boardman is estopped as against these commercial creditors to claim the fund in question, have cited us to several authorities, which we will now briefly review.
The first case cited is Webb v. Armistead, 26 Fed. Rep., 70. In that case Armistead’s relatives loaned him the capital with which he embarked in business. He after-wards failed and made an assignment for the' benefit of his creditors, preferring his relatives who had loaned him the money with which he started in business, and the court held that the deed of assignment was void on its face because of the extraordinary powers and discretion which it conferred upon the assignee named therein. Counsel for the appellants here insist that the court also decided- that the preference given to his relatives by Armistead was Amid as against his commercial creditors, because this preference was in fact the only capital which Armistead put into his business. We do not think the decision of the case turned upon that point, and if it did, we are not prepared to follow it. In that case, as in the case at bar, it was shown that the debtor had made statements to the commercal agencies as to his indebtedness and concealed the fact that he was indebted to his relatives; that the commercial creditors relied upon these statements and sold him goods and extended him credit upon the faith of them. But there is in the case no refer
Smith v. Sipperly, 34 Pac. Rep. [Utah], 54, is another case cited by counsel for appellants. But this case follows the holding of the federal court in the Armistead Case, and adopts its opinion without discussion or examination.
Another case cited is Krippendorf v. Hyde, 28 Fed. Rep., 788. The court said: “If a creditor of a commercial firm whose insolvency is known to him, but not to the public, helps the firm to keep going and to extend largely the scope of its business.and credit, under a promise of preference over other creditors in case of disaster, which under the circumstances is clearly probable, and the firm, having obtained large quantities of goods on credit, turns them over to this creditor in payment of his demands, keeping nothing for other creditors, the transfer of the goods Avill be deemed fraudulent.” The opinion in the case was written by Woods, J., and the preference seems to have been held fraudulent because of a secret promise therefor made by the commercial firm at the time the creditor loaned it money. The case is not in point here and the learned judge cites no authority to support the conclusion reached by him; and in addition to this the same judge, in Smith v. Craft, 17 Fed Rep., 705, in an able opinion in which the authorities are examined, held that a preference given by a failing debtor in pursuance of a promise made when he obtained the loan, to make such a preference in case of his failure would not be set aside as fraudulent at the instance of other creditors unless a fraud Avas intended. And again in Lippineott v. Shaw Carriage Co., 25 Fed. Rep., 590, the same judge made the same ruling that he did in Smith v. Crap, supra. In view of these contradictory decisions of the nisi prius federal courts, we do not feel bound to follow the rule announced in the Armistead Case.
Another case cited by appellants, is Roy v. McPherson, 11 Neb., 197. In that case Mrs. Roy put into the hands of her brother a sum of money with which to purchase land for her. The brother purchased the land, but took the title in the name of Mrs. Roy’s husband. This was in 1864. Mrs. Roy knew that the title to the land had been placed in her husband’s name at the time it was done. She acquiesced in this for thirteen years. During this time her husband engaged in mercantile business and contracted debts upon the faith of his being the owner of this land. The husband failed and a contest arose between his creditors and Mrs. Roy as to the title to this land, and we held that Mrs. Roy had estopped herself to
Other cases cited by appellants are Early v. Wilson, 31 Neb., 158, and Swartz v. McClelland, 31 Neb., 616. These cases follow the rule announced in Roy v. McPherson, and, for reasons already stated, are not in point here.
The transactions out of which this suit grew occurred between parent and child, and if the decree of the district court shall be affirmed its result will probably be to deprive the other creditors of young Boardman of their debts; and because of these facts, the law has placed on this mother the burden of showing by a preponderance of the evidence that her conduct in the premises and the motives which inspired it were honest; that the entire transaction was in good faith, and that in nothing that she did was there any intention to defraud the son’s other creditors. (Plummer v. Rummel, 26 Neb., 142; Ward v. Parlin, 30 Neb., 376; Peregoy v. Krautz, 31 Neb., 58; Carson v. Stevens, 10 Neb., 112; Metick v. Varney, 41 Neb., 105; Glass v. Zutavern, 43 Neb., 334; Steinkraus v. Korth, 44 Neb., 777.) But this is merely a rule of evidence and owes its origin to the fact that the relationship existing between members of the same family is not only an inducement for them to protect one another, but affords
Affirmed.