45 Neb. 119 | Neb. | 1895
This action was brought on February 11, 1891, in the district court of Hall county by the Grand Island Banking Company against James A. Costello, sheriff of said county, and the firms of Wood, Brown & Co. and Steppacher, Arnold & Co., to restrain the levy of an execution issued
In this case the questiun of the most practical importance to Wood, Brown & Co. and Steppaclier, Arnold & Co. is whether or not the existing garnishments of the Grand Island Banking Company conferred rights over which the levy of an attachment on behalf of either of said two firms could not prevail. In Faulkner v. Meyers, 6 Neb., 414, Lake, C. J., said: “There were several instructions, requested by the plaintiffs in error, refused. These related to the right of an ordinary creditor by attachment to subject the interest of a mortgagor of goods and chattels in the hands of the mortgagee to the payment of his debt. As abstract propositions of law these instructions were in the main correct, but having no application to the case on trial were very properly refused. There is no doubt, however, that the equity of redemption in property so circumstanced may be reached by attachment. The plain orderly course to pursue in such case is by garnishment, whereby whatever
Q. Now, then, what was said and who said it in reference to Mr. Wiebe’s creditors — protecting Mr. Wiebe from his creditors?
A. Well, you know what you said.
A. Well, I have been stating it here.
Q,. What was said about — you said that something was said in your direct examination in regard to helping Wiebe to a settlement with his creditors. Now, I want to know what was said and who said it; what the language was.
A. The plan was suggested by you.
Q. What was the plan that I suggested? What was my language?
A. The plan?
Q,. Yes, sir.
A. That he should give a mortgage on everything that he had.
Q. For what purpose?
A. For what purpose?
Q. Yes, sir.
A. Well, to protect the bank first.
Q,. Yes, sir, and what else?
A. Then to do what the other fellow — the other fellow could talk to him, not him to the other fellow.
Q,. You say that I used that language?
A. I say that was the original plan of that deal.
Q,. What I want to know now is what was said and who said it.
A. Who said it?
Q. Yes, and just what each man said.
A. The perfecting of that plan was by you.
Q,. Well, just state what was said.
A. Well, I have stated it now as plain as it can be stated.
Q. Do you say that I said that — to protect the bank first and.then to compel the creditors to come to Wiebe and not Wiebe to come to them?
A. In the general conversation I will make an affidavit—
Q,. Never mind, you are on oath now. I simply asked
A. Well, I will be responsible for what Isay; that that meeting at the bank was for the purpose of seeing what could be done for Mr. Wiebe, and seeing if some arrangement could be provided whereby he could get an extension on his liabilities or perfect some plan whereby he could force a compromise. Now that is as plain as I can make it.
Q,. Who suggested it? Where did you first hear it?
A. Where did I first hear it?
Q. Yes, sir.
A. Mr. Wiebe and I through the day consulted with the bank. Not only in the morning but in the afternoon. We consulted each other as regarded the condition of things aud went there to the bank that night with the idea and with the intention of fixing some plan — I will reiterate what I have just said, whereby he could get an extension or make a compromise with his creditors.
Mr. Wiebe at the meeting of February 4 finally consented to execute to the bank the chattel mortgage and the real estate mortgage as demanded. There were then produced the existing evidences of indebtedness of Mr. Wiebe, together with an unrecorded real estate mortgage by him given to the banking com] any about two years before tO' secure such advances as should be made to him. Mr. Wiebe asked that this real estate mortgage might not be recorded, but that another should be taken in its stead because of certain reasons that he had for desiring this course to be taken. It appears that these reasons were that Mr. Wiebe had obtained credits on the faith of certain statements which ignored the existence of this mortgage rendered possible by the failure to record it. The notes of Wiebe in the bank on February 4 were three in number, one for $10,000, dated January 30, 1891, due March 1, 1891; one for $3,000, dated January 20, 1891, due March T, 1891; and one for $1,170, dated January 30,1891, due
The evidence, aside from the disproportion alleged between the value of the goods and property mortgaged and the debt secured thereby, by which it is claimed that the «existence of a fraudulent intent on the part of the mortgagee was established, has been fully set out, even to tediousness, that it may appear how unsatisfactory was this
The principal thing he said was — he told how they treated! a creditor of theirs back in Troy.
Q,. What did he say ?
A. He said a fellow failed and they took possession of what he had, and that in ten days they had a compromise and they had the fellow on his feet again. That was the sum and substance of it.
Passing over the very evident misuse of the word “cred
“Sec. 16. All deeds, mortgages, and other instruments of writing which are required to be recorded, shall take effect and be in force from and after the time of delivering*138 the same to the register of deeds for record, and not before, as to all creditors and subsequent purchasers in good faith without notice; and all such deeds, mortgages, and other instruments shall be adjudged void as to all such creditors and subsequent purchasers without notice, whose deeds, mortgages, and other instruments shall be first recorded . Provided, That such deeds, mortgages, or instruments shall be valid between the parties.”
The record of an instrument of the character above indicated is to impart notice of its existence. It might be that the withholding from record of a mortgage of real property would be so obviously part of a plan to deceive that greater force should be imputed to it than prescribed by the section just quoted. No such condition is, however, found in this case. It is true Mr. Wiebe’s misrepresentations as to the unincumbered condition of his property were to some extent rendered plausible by the absence from the record of his mortgage. But this action was in no way founded upon such mortgage. The banking company was not aware, so far as the evidence shows, that Mr. Wiebe was making statements which ignored the existence of its mortgage. If it had been and nevertheless had taken no steps to correct the misinformation given by Mr. Wiebe in his efforts to establish his right to credit, the banking company might have been estopped, as against parties so deceived, from asserting its mortgage. But this would have been on the theory that the banking company was, in effect, a participant in the deception practiced. No case has come within our knowledge which holds that the mere failure to file a mortgage for record raises a presumption- that such mortgage is void, and nothing short of this would sustain the contention of the appellees. It is quite possible that each member of the firm of Abbott & Caldwell may have manifested too much interest in the affairs of Mr. Wiebe after his store had been closed. In none of these transactions, however, did either of these gentlemen assume to
From the unsubstantial character of the above evidence it is quite apparent that the finding that the chattel mortgage was invalid was based upon other facts than those above discussed. At the time of the entry of the decree in the. district court (November 15, 1892) there had, within a comparatively recent time, been delivered by this court certain opinions which were generally understood to have established the doctrine that the mere fact that the value of the property mortgaged was in excess of the amount secured, with probable depreciations in value and such costs and outlays as must necessarily be expended in making collection from the security pledged, ipso faoto, invalidated the mortgage. Doubtless this understanding of the doctrine established by this court was largely responsible for the finding adverse to the validity of Wiebe’s chattel mortgage to the banking company. Mr. Coggeshall, a witness for the defendants, estimated the actual value of Mr. Wiebe’s stock on February 4, 1891, at $37,000. The invoice of date February 1, 1891, showed its value was $43j000. Mr. Coggeshall’s testimony was that it sold to the very best advantage as it was sold, and that $23,700, the amount actually paid on foreclosure sale, was all that at such sale it could reasonably be expected to bi'ing.
In the case of Kilpatrick-Koch Dry Goods Co. v. McPheely, supra, the following language was used : “ We are not prepared to say that a mortgage would be fraudulent solely because the valúe of the property mortgaged was two or even three times greater than the debt. Whether it would be, would be a question of fact for a jury or trial court, and not a question of law. A debtor has a right to prefer his creditors; to pay part in full to the exclusion of others, and he has a right to secure the debts of a part of his creditors to the exclusion of the others; and this is true whether he be insolvent, or in failing circum
In an opinion prepared by Irvine, C., in the case of Kilpatrick-Koch Dry Goods Co. v. Bremers, 44 Neb., 863, filed at this term, another phase of this question was under consideration, and the history of the decisions of this court in connection therewith were fully considered, closing with the following language : “ If we should hold that the taking or giving of inadequate security constituted the transaction fraudulent, we would pfactically hold that a debtor could never safely secure his creditor. The argument has always been the other way, and it has often been said that the giving and taking of security in value greatly in excess of the debt is evidence tending to prove fraud. It would not do to say that because a debtor cannot give adequate security he must refrain from giving any, or leave the transaction open to attack as constituting a fraud in law.”
As was pointed out in Kilpatrick-Koch Dry Goods Co. v. McPheely, supra, the statute of this state therein referred to provides that the question of fraudulent intent shall be deemed a question of fact and not of law. This statutory provision directly negatives the proposition that from the taking of security in excess of the amount to be secured the law implies a fraudulent intent. As pointed out by Commissioner Irvine, the disproportion, if .one exists, is but a matter of evidence, to be given such consideration as in the light of surrounding circumstances it may be entitled to receive in determining a question of fact. We cannot believe that with this proposition considered as above indi
Reversed and remanded.