Peed v. Elliott

• Decision Date: 23 May 1893
• Docket Number: 16,258
• Parties: Peed et al. v. Elliott et al
• Court: Indiana Supreme Court

34 N.E. 319

134 Ind. 536

Peed et al. v. Elliott et al

No. 16,258

Supreme Court of Indiana

May 23, 1893

From the Madison Circuit Court.

Judgment affirmed.

M. E Forkner, J. W. Lovett and S. M. Keltner, for appellants.

H. C Ryan, J. C. Nelson and Q. A. Myers, for appellees.

OPINION

Olds C. J.

On the 29th day of September, 1890, James L. Peed was the owner of certain real estate in Madison county, Indiana, also certain real estate situated in the city of Indianapolis, and certain personal property. On said date, he was indebted to his brother, John R. Peed, in the sum of $ 1,400 on notes given long before that time, and on account. John R. was also the security for James L. on a note to Alice Hume for $ 200. He was indebted to his son Martin E. Peed in a less amount than the sum due his brother. He was on said date indebted to Elliott, Schroyer & Co., the appellees, in the sum of $ 2,076.32, and to the appellee Louis Hollwegg in the sum of $ 350.16. On said date, he executed mortgages to his brother and son, securing the sums due them, his brother agreeing to take $ 1,000 instead of the $ 1,400, which sum, and the $ 200 he secured by the mortgage, and, also, secured the sum due his son by a mortgage; and on the same day made a voluntary assignment of all his property for the benefit of all his creditors under the statute, naming his brother John R. Peed and another as trustees. The other person named did not qualify, but John R. Peed did qualify as trustee, and was proceeding to sell the property, advertising the land for sale subject to the mortgages.

The appellees filed in the Madison Circuit Court an intervening petition, seeking to enjoin the sale of the real estate subject to the mortgages, and to have the mortgage in favor of said John R. Peed declared void, for the reason that it was executed contemporaneously with, and as a part of, the instrument of assignment.

Issues were joined by answer in denial to the petition. There was a trial by the court; and the court, on proper request, made a special finding of facts, and stated its conclusions of law in favor of the appellees. Exceptions were taken by the appellants to the conclusions of law, and certain motions were made, ruled upon, and exceptions reserved, which rulings of the court are made the subject of review by proper assignments of error.

The principal question presented in the case relates to the validity of the mortgage in favor of John R. Peed, and this arises on the exceptions to the conclusions of law.

We deem it unnecessary to set out in detail the finding of facts, except as to the question presented on the findings in relation to the execution of the mortgages and the assignment, the court holding that they all are one transaction, having been executed contemporaneously.

The court's finding in this respect is, in brief, that on the 29th day of September, 1890, Peed went from his home in Elwood, Madison county, Indiana, to New Castle, Henry county, Indiana, where he consulted with his brother-in-law, one David W. Chambers, an attorney, in regard to his financial embarrassment, and as to the proper manner of securing his brother John R. Peed and his son Martin E., and as to making an assignment for the benefit of his general creditors; that James L. went to his brother's, John R., on that evening, remaining all night, and told his brother of his financial embarrassments, and the two went together to the office of Chambers, and again consulted him as to the best method of securing his brother and son and the making of an assignment, and was informed by Chambers that if he wished to prefer his brother and son he must first execute and deliver to them mortgages, and then execute the deed of assignment for the benefit of his general creditors, and so executed, the mortgages would be valid; that thereupon said Chambers commenced the preparation of the papers, first drawing the mortgages and notes which they were to secure, and while said debtor was acknowledging and delivering the mortgages, the said attorney was preparing the deed of assignment for the benefit of all creditors; that when the mortgages were delivered, the deed of assignment was half written, and in twenty minutes from the time the last mortgage was acknowledged and delivered, said deed of assignment was completed, acknowledged and delivered to said Chambers to have it recorded; that each of said mortgages, and said deed of assignment, were left with said Chambers to be brought to Anderson, in Madison county, to have them recorded; that said Chambers left New Castle at ten o'clock, and at eleven o'clock he went to the recorder's office in Madison county, and had the mortgages marked recorded by the recorder of said county, having with him at the same time the deed of assignment, which he purposely withheld until two o'clock of said day, when he took it to the recorder's office and left it for record.

It is contended, on the part of the appellants, that this was a valid preference of creditors, prior to and separate and apart from the transaction of the assignment in the making and execution of the deed. While, on behalf of the appellees it is contended that it was one and the same transaction, and was an effort to avoid the...