Baker v. Pottle
| Decision Date | 29 February 1892 |
| Citation | 51 N.W. 383,48 Minn. 479 |
| Parties | BAKER v POTTLE. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
(Syllabus by the Court.)
1. Where mortgaged personal property remains in the possession of the mortgagor, and the mortgage is not filed, it is by statute made presumptively fraudulent as to creditors of the mortgagor who become such without notice of the mortgage. The mortgagor becoming insolvent, a receiver for the benefit of such creditors may dispute the validity of the mortgage without proof of actual fraud.
2. If a mortgage is withheld from record pursuant to an agreement between the mortgagor and mortgagee, in order that the credit of the former may not be impaired, it would be deemed a fraud as to any one who should become a creditor of the mortgagor, relying upon the false appearance of responsibility thus created, and as to such a creditor the mortgagee would be estopped.
Appeal from district court, Hennepin county; LOCHREN, Judge.
Replevin by Samuel L. Baker, receiver, against James H. Pottle. Judgment for plaintiff. Defendant appeals. Affirmed.
Merrick & Merrick, for appellant.
Charles B. Holmes, for respondent.
This is an action of replevin. The defendant claims the right of possession by virtue of two chattel mortgages executed to him by the owner of the property, Koessel, to secure the payment of money loaned at the time such mortgages were given. The first of these was executed on the 10th day of May, 1890. The mortgagor became insolvent, and the plaintiff was appointed a receiver for the benefit of creditors. The matter in controversy relates to the validity and effect of these mortgages as respects the creditors of the mortgagor, whom the plaintiff, as receiver, represents. The execution of the mortgages was admitted by the reply, but their validity as to creditors was put in issue, fraud being averred. The mortgaged property remained in the possession of the mortgagor after the giving of the mortgages, and neither of the mortgages was filed for record until July 9, 1890, before which time, as the evidence tended to show, the mortgagor became insolvent. There was evidence going to show that when the mortgages were given it was agreed by the defendant, at the request of the mortgagor, that the mortgages should not be filed, for the reason that it would “hurt his credit,” and that the mortgagor then stated to the defendant that he was “temporarily hard up.” It further appeared that after the giving of the first mortgage one Reif loaned to the mortgagor a considerable sum of money without any knowledge of the mortgages, and supposing that the property was unincumbered. He is one of the creditors represented by the plaintiff.
Several of the defendant's assignments of error are based upon the proposition that, notwithstanding the facts that there was no change in the possession of the property, and that the mortgages were not put on record, the burden rested on the plaintiff to prove by further evidence that they were fraudulent as to creditors; and it is also claimed that the...
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...Ressler, 37 Minn. 82, 33 N.W. 117; Thomas v. Foote, 46 Minn. 240, 48 N.W. 1019; Gallagher v. Rosenfield, 47 Minn. 507, 50 N.W. 696; Baker v. Pottle, supra. If there are any creditors in case entitled to have the plaintiff's title to or lien on the property subordinated to the payment of the......
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... ... and b; In re Bothe, 173 F. 597, 97 C.C.A. 547; ... First Nat. Bank v. Staake, 202 U.S. 141, 26 S.Ct ... 580, 50 L.Ed. 967; Baker v. Pottle, 48 Minn. 479, 51 ... N.W. 383. He has the undoubted right to assail this mortgage ... on behalf of general creditors who became such ... ...
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Goldberg v. Brule Timber Co.
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