126 Ind. 341 | Ind. | 1890
— This is an action by the appellees against the appellants upon a replevin bond. Trial by the court, without the intervention of a jury, and, on proper request, the court found the facts and stated its conclusions of law thereon. Exceptions by the appellants to the conclusions of law. Appellants also filed a motion for a new trial, which was overruled, and exceptions reserved.
Errors are assigned, that the court erred in its conclusions of law, and in overruling appellants’ motion for a new trial. The court found the facts to be : That on the 26th day of March, 1879, the defendant McFadden, as administrator of the estate of Joseph Nichols, deceased, brought an action in replevin against the appellees for the recovery of certain goods therein specified, and executed the bond in suit as a bond in that case; that on the 3d day of March, 1882, this suit was instituted on said bond, the said replevin suit having been dismissed by the appellant, the plaintiff therein, on the 15th day of January, 1881, and judgment was rendered by the court that the value of the goods, being the same goods mentioned in the complaint in this action, wa.s $401.90.
That on the 9th day of January, 1879, George D. Nichols executed his note for money borrowed before that time, and not for-money loaned at the time to Joseph Nichols, for the sum of $550, payable three years after date, without relief from valuation or appraisement laws, and to secure said note executed a mortgage on a retail stock of liquors, saloon fixtures, and other property as described in the mortgage in ev
Upon these facts the court stated its conclusions of law as follows:
“ Said mortgage is fraudulent and void as to creditors, and is no defence to this suit; that said plaintiffs are entitled to judgment against the defendants on the undertaking sued on in the sum of $401.90, the value of the goods taken under the replevin proceedings, with interest from the 15th day of January, 1881, amounting in the aggregate to the sum of $556.56.”
The fact that the goods mortgaged, or a portion of them, had been purchased of the appellees within a short time prior to the execution of the mortgage gives to the appellees no additional rights in this case other than they would have as creditors of the mortgagor. They are not claiming the goods by reason of a failure of the purchaser to pay for them in accordance with his contract or by reason of their purchase by him with a fraudulent intent. After the execution of the mortgage the appellees affirmed the sale, took judgment on their account for the goods, had an execution issued, and levied upon and sold the goods, and became the purchasers at the sale on execution, and the claim or right they assert to the goods in this action is by virtue of their purchase at the sale of them on their execution. O’Donald v. Constant, 82 Ind. 212.
The facts found show that the note and mortgage executed to Joseph Nichols were given for a valuable consideration, the consideration being money loaned by the mortgagee to the mortgagor. There are no facts found which tend to show that Joseph Nichols had any knowledge of a fraudulent intent on the part of George D. Nichols to hinder or delay his creditors, or that he had no other property subject to execution.
There are no facts found which tend to show that Joseph Nichols did not at all times act in the best of faith and with an honest purpose. The fact that there was an extension of time given, and that the mortgage provided for the retention . of the property by the mortgagor in and of themselves, constituted no element, or even inference, of fraud. Such a mortgage has been held by this court to be valid, and that “ a fraudulent intent can not be judicially inferred from the fact that the mortgagor, by the terms of the mortgage, may remain in possession with leave to sell the property, even though he be not, by stipulation in the mortgage, required to account for the proceeds of such sales.” Fisher v. Syfers, 109 Ind. 514.
It is suggested by counsel for appellees that a mortgage executed to secure a pre-existing debt does not make the mortgagee a bona fide holder as against, and so as to cut off, prior equities, and authorities are cited in support of this contention.
There is no question of prior equities or innocent purchasers involved in the case.
George D. Nichols was indebted to the appellees and his father, Joseph Nichols; he executed a mortgage on his property to Joseph Nichols, and afterwards the appellees sued George D. Nichols and obtained a judgment, and had execution, and sold the property mortgaged, and became the purchasers. The appellees were subsequent lien-holders, and sold and purchased the property subject to the mortgage of Joseph Nichols.
To render the mortgage fraudulent and void it was neces
There is no fact found showing that he had any such knowledge, or that he did not act in the utmost good faith. The facts found showing that McFadden was the agent of Joseph Nichols, and had his office near to the place of business of George D. Nichols, and that no accounting was required, do not establish any fraud on the part of the mortgagee. The note and mortgage were executed on the 9th of January, 1879, and Joseph Nichols died, and McFadden was appointed administrator, and brought a replevin suit for the goods on the 26th day of March, 1879, less than three months from the date of the execution of the mortgage, and it is not found that either .Joseph Nichols or McFadden had any knowledge of a sale of any portion of the mortgaged goods, or that they, or either of them, ever consented to any such sale.
Under the facts found by the court the mortgage in favor of the estate of Joseph Nichols was a valid lien upon the property, and the appellees were not entitled to judgment against the appellants for its value.
The court erred in its conclusions of law, and for such error the judgment must be reversed.
Judgment reversed, with costs, with instructions to the court below to sustain the motion for a new trial.