Clarence v. Farwell
| Decision Date | 31 May 1881 |
| Parties | CLARENCE V. SHOVEv.JOHN V. FARWELL ET AL. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
APPEAL from the Circuit Court of Mercer county; the Hon. JOHN J. GLENN, Judge, presiding. Opinion filed November 2, 1881.
Messrs. PEPPER & WILSON, for appellant; that a pledge is good if founded upon good consideration, and there is no purpose to defraud creditors, cited Kergin v. Dawson, 1 Gilm. 86.
A debtor may prefer one creditor to another, and a transfer of property to such creditor is not fraudulent: Funk v. Staats, 24 Ill. 633; Hessing v. McCloskey, 37 Ill. 341.
Property to be subsequently acquired may be held under a mortgage if possession is taken before other liens accrue: Gregg v. Sanford, 24 Ill. 17.
A chattel mortgage, though not in statutory form, is good if possession is taken before other liens accrue: Whisler v. Roberts, 19 Ill. 274; Read v. Wilson, 22 Ill. 377; Frank v. Miner, 50 Ill. 444; Thornton v. Davenport, 1 Scam. 296.
An insolvent debtor may sell or pledge his property, if done in good faith, to pay or secure a debt: Wood v. Shaw, 29 Ill. 446.
A delivery before the attachment of any lien, will validate the sale: Hilliard on Sales, 183; Bartlett v. Williams, 1 Pick. 288; Kendall v. Samson, 12 Vt. 515; Coty v. Barnes, 20 Vt. 19; Wilson v. Leslie, 20 Ohio, 161; Nelson v. Wheelock, 46 Ill. 25; Frank v. Miner, 50 Ill. 445; Smith v. Stern, 17 Pa. St. 360; Sevin v. Russell, 42 N. Y. 251; Hoopsmith v. Cope, 6 Whort. 53; Murray v. Riggs, 15 Johns. 571; Snyder v. Gee, 4 Leigh, 535; Carr v. Glasscock, 3 Gratt. 354; Jones v. Dwyer, 15 East. 27.
Messrs. BASSETT & WHARTON, and Messrs. MARTIN, MURPHY & LYNCH, for appellees; that this was an illegal contract, for fraudulent purposes, cited Davis v. Ransom, 18 Ill. 397; Durning v. Mead, 90 Ill. 376; Robinson v. Elliott, 22 Wall. 513; Henry v. R. I. Locomotive Works, 3 Otto, 664; Ford v. Williams, 3 Kernan, 577; Edgill v. Hart, 13 Barb. 380; Delaware v. Ensign, 21 Barb. 85; Griswold v. Shelden, 4 Comst. 580; Hart v. Crane, 7 Paige Ch. 37; Ward v. Trotter, 3 Mon. 1.
A subsequent creditor may take advantage of a fraudulent sale or transfer if made for the purpose of defrauding creditors: Mattingly v. Nye, 8 Wall, 307; Lloyd v. Bunce, 41 Ia. 660; Winchester v. Carter, 12 Allen, 506; Trafton v. Hawes, 102 Mass. 541; Lormore v. Campbell, 60 Barb. 62; Pratt v. Myers, 56 Ill. 24; Churchill v. Wells, 7 Caldw. 364; Wilcox v. Morgan, 2 Cal. 473; Boies v. Henney, 32 Ill. 130; Blow v. Gage, 44 Ill. 208; Hanford v. Obrecht, 49 Ill. 146; Strohm v. Hayes, 70 Ill. 41.
If there be a design to defraud, the transfer will be voidable as to subsequent creditors: Read v. Livingstone, 3 Johns. Ch. 481; Bennet v. Bedford Bank, 11 Mass. 421; Damon v. Bryant, 2 Pick. 411; Parkman v. Welch, 19 Pick. 231; Jenks v. Clement, 14 Am. Dec. 698; Story on Sales, § 513.
The finding of the court stands as the verdict of a jury: Ambs v. Honore, 24 Ill. 122; Thomas v. Rutlege, 67 Ill. 213; T. W. & W. R. R. Co. v. Elliott, 76 Ill. 67.
A new trial will not be granted unless there appears a want of evidence to support the finding: White v. Clayes, 32 Ill. 325; Unlauf v. Bassett, 38 Ill. 96; Railroad Co. v. Coal Co. 36 Ill. 60; Tolman v. Race, 36 Ill. 472.
It appears from the record in this case that on the 4th day of October, 1880, the appellee sued out of the Circuit Court of Mercer county an attachment against the appellant's property, alleging in the affidavit as a ground for the writ that the defendant had within two years prior to the filing of the affidavit, fraudulently conveyed and assigned his effects, so as to hinder and delay his creditors; and that he had within the same time fraudulently concealed and disposed of his property, so as to delay and hinder his creditors, and was about to do so for like purpose.
The defendant filed his plea, traversing the allegations of the affidavit, upon which issue was joined, and a trial had before the court, resulting in a finding in favor of the appellees.
A like finding was had upon the merits and final judgment rendered against the appellant, from which he appeals to this court, assigning for error the finding of the court sustaining the attachment.
The only ground relied upon by the plaintiff below, to sustain the writ of attachment, was an alleged sale of his property, consisting of a stock of goods by the defendant, to one R. H. Spicer, made December 10, 1878.
It appears from the record that on the 19th day of February, 1878, a bankrupt stock of goods of Dennison and Stewart, were sold for $2,224, for which Spicer gave his notes, and turned the possession of the goods over to Shove, under some kind of an arrangement that Shove should pay for the goods. This arrangement was in the December following evidenced by a written contract between Shove and Spicer, wherein is recited the purchase by Spicer of the goods, the giving of the notes, and the fact that Spicer had for the purpose of replenishing the stock, advanced $250 in money, and given his note for $700 more, dated Nov. 24, 1878, to the Farmer's Bank of Aledo. It was then agreed that if Shove would pay the interest on said notes, and the principal of the notes at maturity, and thus relieve said Spicer from all liability thereon, then Spicer would release all his interest in said goods to Shove, but until Shove complied by paying the notes and interest, Spicer was to retain his ownership of the goods, and upon default by Shove, Spicer might take the possession of all the goods in the custody of Shove at the time of such default, whether of the original stock or subsequent purchases, and dispose of them as he might see proper.
Under this contract, Spicer took possession of the goods on the 3d day of August, 1880, by and with the consent of the appellant. It is this transaction which it is claimed makes the appellant amenable to the act concerning attachments. It is perhaps immaterial whether the transaction be considered as a conditional sale, or in the nature of a chattel mortgage security, to secure Spicer in his advancements to Shove, as in either case it could not be sustained as to any creditor who should acquire a valid lien upon the goods while Shove still remained in possession, for if a conditional sale, it would be invalid as to such creditor under the authority of McCormick v. Hadden, 37 Ill. 370; Ketchum v. Watson, 24 Ill. 591, and Murch v. Wright, 46 Ill. 488, and if designed as a mortgage it was not executed in conformity to the provisions of the statute, but in either case, if the transaction was in good faith and the vendor or mortgagee should reduce the goods to possession before any valid lien attached thereto, it is apprehended that he would be in as good a position as to subsequent attaching or execution creditors as though the possession had always remained in him. Frank v. Miner, 50 Ill. 444.
There was no attempt made in the court below to show that the appellant was not indebted to Spicer, but it is urged that the contract between them was not a valid one as against creditors, as the possession of the goods remained with the appellant, and therefore was fraudulent in law and that by such a disposition of the goods, coupled with the transfer of the possession to Spicer, makes the appellant guilty of such fraud as to justify the...
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