133 P. 94 | Or. | 1913
delivered the opinion of the court.
1. It is first contended that defendant parted with no consideration for the mortgage at the time of its
2. It is next claimed that Ford made the mortgage for the purpose of hindering and delaying creditors. According to Ford’s own statement he feared trouble with the Oakland Motor Car Company, which held a claim against him for about $8,000; and for the purpose of getting a settlement with it he proposed to the Vale bank and to the Ontario bank that, in order to protect them, he would give them a chattel mortgage. He says that neither the Vale bank nor the Ontario bank requested the mortgage. The Ontario bank did not agree to accept it, but said they were satisfied with the paper they had; that Monroe, the cashier of the Vale bank, said, “He was willing to (accept it) if it was any benefit to me” — thus showing a fraudulent purpose on the part of Ford, which was acquiesced in by the Vale bank. Monroe admits knowledge of Ford’s purpose and acquiesced in the mortgage, and although the mortgage contains no reservation in favor of Ford, and is in form valid, it is clear that the Vale bank nominally accepted the mortgage to benefit Ford, and thereafter with a tacit understanding permitted him to continue the business unrestrained and for his own benefit. It is said in Sabin v. Columbia Fuel Co., 25 Or. 15 (34 Pac. 692, 42 Am. St. Rep. 756): “Where a mortgage is designed and made for the benefit of the mortgagor* and to enable him to continue in business by placing his property beyond the reach of legal process, it is void as to creditors.” Where the mortgage on its face con
We conclude that the mortgage was executed by Ford for a fraudulent purpose; that the Vale bank accepted it with knowledge of that purpose and for Ford’s benefit, and permitted him to conduct the business as he had formerly done and for his own benefit; and that as to other creditors the mortgage was void.
The decree is reversed and a decree will be rendered here adjudging the mortgage to be void.
Reversed : Decree Rendered.