120 Ga. 632 | Ga. | 1904
On November 10, 1899, Miss I. T. Babbitt purchased from D. D. Stults his mercantile business in Bainbridge, giving him for the purchase-price thereof her nineteen promissory notes of one hundred dollars each, one due on the 10th of each month, beginning January 10, 1900, and at the time of the purchase she agreed to give him a mortgage on a house and lot in Bainbridge to secure the payment of the notes. On December 20, 1899, she executed and delivered to him the mortgage, which was never recorded. On October 27, 1900, she sold the stock of goods to C. C. Cliett for $3,000 cash, which was a fair price. On the same day she paid Stults $1,080, in satisfaction of what she owed him on the notes given for the goods, and the mortgage was surrendered. The balance of the proceeds of such sale she on the same day appropriated to the payment of some other debts. She owed at the time about $6,000, of which $400 was by note to W. C. Bradley & Co., upon which note she paid nothing. Her property consisted of the stock of goods, the house and lot, which was worth from $1,000 to $1,200, and store accounts valued at $500 or $600. On February 16,1901, W. C. Bradley & Co. et al., creditors of Miss Babbitt, filed a petition in bankruptcy against her; and she was adjudicated a bankrupt, February 14, 1902. B. 0. Dickenson, as trustee of the bankrupt, brought suit against Stults to recover the sum of $1,080, alleging that, under the national bankruptcy act, it was a preferential payment, and made for the purpose of hindering, delaying, and defrauding other creditors. The verdict was for-the defendant. Plaintiff moved for a new trial, which was refused, and he excepted.
In the present case, only one witness was introduced by the plaintiff. This witness was J. R. Babbitt, the brother of the bankrupt, who conducted her business and acted for her when the' notes and mortgage were given to Stults and when the stock of goods was sold and the notes and mortgage satisfied. He testified, in part, as follows: That the mortgage was, hot recorded be- ■ cause it was understood that it would damage his sister’s credit. “Stults agreed to it. There was no discussion between us as to when it should be recorded. Stults did not agree that it should never be recorded.” “ Stults had the only mortgage.” “ Mr. Stults did not object to the mortgage going on record, but I did not want it recorded.” “ There was no intention on my part to defraud any of [the] creditors. In the payment of these debts it was not my purpose to hinder, delay, defraud, or defeat the rights of other creditors.” The defendant was the only witness who testified in his behalf. He testified, in part, as follows: “Some time in the fall of 1899, I sold out my mercantile business in Bainbridge, Ga., to Miss I. T. Babbitt, and for the purchase-price I took notes of $100 each, and a mortgage on her house and lot in Bainbridge to secure the payment of the notes. Most of the notes were paid promptly; there was one past due when the stock of merchandise was sold to Mr. Cliett. I knew that Mr. Babbitt had been sick for some time prior to the sale of the Babbitt stock, but had no idea that the business was insolvent. I did not know who or what he owed,
We think it apparent from the foregoing that the jury were authorized to find that, under the law of this State, Stults had a valid mortgage, not only against the mortgagor but against her unsecured creditors, who were represented by her trustee in bankruptcy. If the mortgage was valid and enforceable against the general creditors of the mortgagor, then it would have been recognized and enforced as a valid lien in a court of bankruptcy, if it had not been satisfied and the- mortgagor had gone into such court to collect his debt. If he had a valid mortgage, then he was not of the same class as the general creditors represented by the trustee, and although his debt was paid in full, he did not obtain a greater percentage of it than any other creditor of the same class, for the reason that there were no other creditors of his class. There was evidence authorizing a finding that the payment to Stults was not made for the purpose of hindering, delaying, or defrauding the other creditors. The judgment refusing a new trial is affirmed.
Judgment affirmed.