Burley v. Marsh

• Decision Date: 26 May 1881
• Citation: 9 N.W. 48,11 Neb. 291
• Parties: ALFRED BURLEY, PLAINTIFF IN ERROR, v. WILLIAM W. MARSH, DEFENDANT IN ERROR
• Court: Nebraska Supreme Court

9 N.W. 48

11 Neb. 291

ALFRED BURLEY, PLAINTIFF IN ERROR, v. WILLIAM W. MARSH, DEFENDANT IN ERROR

Supreme Court of Nebraska

May 26, 1881

ERROR from the district court for Douglas county. Tried below before SAVAGE, J.

REVERSED AND REMANDED.

Redick & Connell, for plaintiff in error.

George E. Pritchett, for defendant in error, cited Gage v Chesebro, 5 N. W. Rep., 881. Hedman v Anderson, 6 Neb. 400. Partelo v. Harris, 26 Conn. 480. Steele v. Ward, 25 Iowa 535. Brown v Foree, 7 B. Mon., 357. Bryne v. Becker, 42 Mo. 264. Foster v. Hill, 12 Pick. 89. Bancroft v. Blizzard, 13 Ohio 30. Tagg v. Miller, 10 Neb. 442. Weinland v. Cochran, 9 Neb. 480.

OPINION

COBB, J.

The defendant in error was a member of the board of directors, and president of the Omaha horse railway company. On the 16th of November, 1877, a special meeting of the board of directors was held, at which were present W. W. Marsh (defendant in error), General Manderson, and J. J. Brown, a quorum of said board. It appears from the record of the proceedings of said meeting as introduced in evidence, and preserved in the bill of exceptions, that "The following resolution was offered: Resolved, That the president and secretary be authorized and directed to execute and deliver to W. W. Marsh and Sylvanus Wright a mortgage or mortgages upon such of the real and personal property of the company as the president may think proper to secure the said W. W. Marsh and Sylvanus Wright from any and all loss or damage they may at any time sustain by reason of their having executed as sureties for the company certain promissory notes made by the company. Upon motion, this resolution was adopted by the following vote: Yeas, W. W. Marsh, C. F. Manderson. No, J. J. Brown."

On the following day, W. W. Marsh (defendant in error) as president, and John E. Wilbur as secretary of the said Omaha horse railway company, executed a chattel mortgage, in and by which they mortgaged to W. W. Marsh certain personal property, which mortgage was recorded the same day, and the principal point involved in the case under consideration is whether the said mortgage was executed, given, and received in good faith, and is entitled to precedence over the levy of an execution on the said goods and chattels, which execution was issued on a judgment rendered against the said Omaha horse railway company a few days after the execution of said mortgage.

Upon the trial, at the request of the plaintiff (defendant in error), the court gave the following instructions to the jury: "The jury are instructed that before they can find a verdict for the defendants, they must find the fact to be that the mortgage was made with the intent to defraud the creditors of the railroad company, and that both the railroad company and the plaintiff acted with that intent at the time the mortgage was given. And it is necessary not only that the railroad company acted with the fraudulent intent, but also that the plaintiff had notice of it. If the plaintiff Marsh had no notice of the fraudulent intent of the railroad company (if such intent existed on the part of the company), this mortgage is valid, it being given to secure a bona fide debt." "Before the jury can say that the railroad company acted with the intent to defraud creditors, in giving the mortgage, they must first say that the directors of the railroad company had such intention at the time they authorized the giving of the mortgage, because a corporation can only act through officers, and can have no intention except as the officers have intention."

The court also refused the prayer of the defendant (plaintiff in error), to give in charge to the jury the following instructions: "1. In determining whether the object and purpose of executing the chattel mortgage to Mr. Marsh was to defeat the collection of any judgment which might be rendered on the verdict then existing in Mrs. Doolittle's favor, it will be proper for the jury to consider the official relation of Mr. Marsh to the horse railway company, and his interest in the same, and also his knowledge of the fact that such verdict had been returned, and also the fact that said mortgage was executed just after said verdict was returned, and while a motion for new trial was pending, as well also as all other circumstances accompanying and surrounding said transaction. And if from all such circumstances, as shown by the evidence, it appears that Mr. Marsh caused to be executed to himself the said mortgage, to hinder, delay, and prevent the collection of any judgment which might be rendered in Mrs. Doolittle's favor, then it will be your duty to find...