63 Neb. 356 | Neb. | 1901
Charlotte Blair, a milliner, being in embarrassed circumstances, executed a chattel mortgage conveying her stock of goods to her son-in-law, and also transferred a considerable amount of real property belonging to her to his bookkeeper. Thereafter certain of her creditors brought
In view of the relation between the parties, and the consequent incidence of the burden of proof, it is manifest that the findings of the trial court as to the nature and purpose of the transfer are sustained by the evidence. The points chiefly urged in argument, and those which alone require our attention, are points of law. It is first contended that the petition fails to state a cause of action, for three reasons: Because there is no allegation “that Charlotte Blair, the judgment debtor, was a resident of Lancaster county, Nebraska”; because there is no allegation that the garnishee was insolvent or that for any reason the statutory action at law for unsatisfactory answer in garnishment was not adequate; and because there is no allegation that plaintiffs had no adequate remedy at law. We are unable to perceive any force in the first objection. Section 207, Code of Civil Procedure, requires
The court fixed the value of the stock of goods at $3,800, but rendered judgments against the fraudulent vendee amounting to about $4,100. This is complained of as error and it is argued that the liability of a garnishee can not exceed the value of the property or amount of the fund actually in his hands. This would often be true where he was an ordinary debtor or trustee of the judgment debtor. But in this case lawful interest upon the value of the stock from the time it came wrongfully into the hands of the defendant in question to the date of the decree amounts to more than the difference between the value of the stock and the amount for which he was held liable. Hence the question comes to this: Is one who takes a stock of goods under a fraudulent conveyance to defeat the vendor’s creditors, and disposes of them and converts them to his own use, chargeable with interest upon their value? There can be but one answer. In equity the property belonged to the creditors, not to him. He converted their property, and deprived them of its use, or the use of the money it would
Another alleged error grows out of the fact that the' stock of goods was sold under the fraudulent chattel mortgage for much less than its value as found by the court. Counsel argue that the mortgagee’s liability is that of a garnishee only; that the plaintiffs had a lien upon the goods and their proceeds, and, the goods having been sold,. recovery should be limited to the proceeds in his hands. For like reasons they argue that he is entitled to credit for certain articles included in the conveyance, which were stolen from him while he held thereunder. These questions have been settled many times. As we have seen, this is a creditors’ suit, and the garnishment proceedings are material only in that by virtue thereof the plaintiffs obtained liens on the s tock.v It is fundamental that the measure of liability of a fraudulent vendee of chattels in a creditors’ suit is the value of the property/ Smith v. Sands, 17 Nebr., 498; Meyer v. Stone, 21 Nebr., 717. The goods belonged to the plaintiffs, as between them and this defendant, and he had converted them. Having converted them, plaintiffs were entitled to claim their value; and when a portion of the goods were stolen, he can not undo his act of conversion as to that portion, and say to the plaintiffs that it was their goods which were stolen. The consideration recited in the chattel mortgage was $2,800. But the court found that, while the evidence showed Mrs. Blair was indebted to the mortgagee in some amount at the date of the transfer, such indebtedness was not shown to have amounted to $2,800, although the goods were found to be worth $3,800; nor was it shown that the mortgage was given to secure such indebtedness. It was also found that the mortgage was made for the purpose of defrauding Mrs. Blair’s creditors, and that the mortgagee not only participated in such purpose, but instigated its execution to that end. Hence, under the well settled rule in this state, the transfer was void as to creditors. Hedrick v. Strauss, 42
Finally exception is taken to that portion of the decree which finds one of the tracts of land conveyed to be the homestead of John H. Blair and awards it to him as such. The averments of his cross-petition are fatally defective, and, if they stood alone, would not suffice to support this portion of the decree. We do not perceive how this portion affects the lights of the present plaintiff in error, or is prejudicial to him. But assuming that it is, we think there is enough in his answer to supply the defect in the cross-petition. By order of court, after the cross-petition of John H. Blair had been filed, Hargreaves filed an itemized account of the sum claimed to have been due him from Mrs. Blair at the time of the transfer. This account was verified and was intended to be taken as part of his answer; the court having ordered him to make his answer more definite and certain by setting forth such sums by items. In this account he recited that he had “indorsed the mortgage now past due on the homestead mentioned in these proceedings.” The only homestead mentioned, was the property claimed as such in the cross-petition of John H. Blair. After admiting its homestead character in his answer, and thus admitting the ultimate fact upon which the relief granted by the court had to depend, he can not complain that the allegations of the cross-petition are defective
We therefore recommend that the decree be affirmed.
By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is
Affirmed.