Bean v. Scheffer

• Citation: 68 Minn. 33
• Decision Date: 26 April 1897
• Docket Number: Nos. 10,110 - (5).,s. 10,110 - (5).
• Parties: ED. S. BEAN v. ALFRED SCHEFFER and Another.<SMALL><SUP>1</SUP></SMALL>
• Court: Minnesota Supreme Court

Page 33

68 Minn. 33

ED. S. BEAN v. ALFRED SCHEFFER and Another.¹

Nos. 10,110 - (5).

Supreme Court of Minnesota.

April 26, 1897.

Appeal by defendants from a judgment of the district court for Ramsey county, in favor of plaintiff, entered in pursuance of findings and an order for judgment of Egan, J. Reversed.

Morphy, Ewing & Gilbert, for appellants.

Henry & R. L. Johns, for respondent.

COLLINS, J.

Action by the assignee of an insolvent debtor to cancel and annul a sheriff's certificate of the sale of real property upon execution, and to set aside and vacate the lien of the judgment on said real property upon which the execution issued, on the ground that, by means of the judgment lien and the sale, these defendants, as creditors of the insolvent, obtained an unlawful and forbidden preference over other creditors. A trial was had, and the court, upon findings of fact, ordered judgment against defendants and in favor of the plaintiff assignee. The appeal is from the judgment.

The court found, among other facts, that when the original action was commenced, and when judgment was entered and docketed therein in favor of these defendants, the debtor was insolvent; that each of these defendants then and there well knew him to be insolvent; that the action was brought and the judgment obtained by these defendants for the express purpose of securing an unlawful preference over other creditors; and that for this same purpose the debtor willfully suffered said action to be brought, and judgment by default to be entered and docketed against him. On appeal the defendants assign as error that the evidence was wholly insufficient to warrant either of these findings, and no other question has been raised by either party.

The facts, as shown upon the trial, were that Peyer, the debtor, had been engaged in the retail harness trade in the city of St. Paul for about 15 years prior to the year 1893, while Scheffer & Rossum, these defendants, were wholesalers of the same line of goods in the same city. Peyer had traded with Scheffer & Rossum for a long time, and his credit seems to have been good up to August, 1893. He then failed to meet his payments, and on November 18, the action in question was brought by service of a summons upon him. He had no defense, made no answer, and judgment by default was entered and docketed against him December 9, 1893, for the sum of $311.80. Upon this judgment an execution was duly issued, and duly levied upon his stock of goods December 12, 1893. Peyer made an assignment for the benefit of his creditors upon the same day, and the assignee (this plaintiff) immediately qualified and entered upon the discharge of his duties. The levy upon the stock of goods was at once released, and the execution returned unsatisfied.

June 22, 1894, an alias execution was issued upon the judgment, and a levy was made upon the real property in question. Such property had been included in the assignment, and particularly described in the inventory. A sale upon the execution was made; defendants becoming the purchasers, and receiving a sheriff's certificate of sale therefor. The assignee had no actual knowledge of such sale until a few days after the year for redemption expired, and, upon hearing the fact, brought this action.

At the trial the insolvent testified that when he made the assignment his stock of goods exceeded $2,000 in value, but it also appeared from the evidence that the assignee had realized therefrom only $262, and had on hand goods of the value of about $200. From tenants occupying the real property in question at an agreed rental of $100 per month, the assignee had collected $1,625. No payments had been made to him for rents accruing after the year of redemption had expired, because of notice served on the tenants by these defendants. It was also shown that, at the time of the trial, creditors had filed claims against the estate aggregating $2,084.67. The defendants' claim of about $300 must be added to this in order to ascertain the indebtedness, which in all was less than $2,500. The real property in question was mortgaged for $7,000, and while the evidence clearly established the fact that in the two years intervening between the day of the assignment, in 1893, and the day of trial, in 1895, it had greatly depreciated in value, the court found as a fact that on the day last named such property was reasonably worth at least $5,000 over and above the incumbrance. From the record it does not appear whether the insolvent was personally liable for the amount due upon the mortgage, or whether he was indebted to creditors who had not filed their claims.

We therefore have a case where an action was brought and a judgment entered and docketed for about $300 against a person whose entire indebtedness did not exceed — we must assume — the sum...