Felland v. Vollmer Milling & Mercantile Co.
| Decision Date | 13 May 1898 |
| Parties | FELLAND v. VOLLMER MILLING AND MERCANTILE COMPANY |
| Court | Idaho Supreme Court |
CHATTEL MORTGAGE-DEED TO REAL ESTATE-FORECLOSURE.-The V. M. & M. Co. holding a chattel mortgage upon certain personal property of the firm of F. E. & Son, and also a mortgage upon real property of the firm, both of which were given to secure indebtedness due and owing from said F. E. & Son to said V M. & M. Co., on default, fore losed the chattel mortgage, F E. & Son giving a deed to V. M. & M. Co. of the real estate and thereupon the V. M. & M. Co. executed to said firm of F. E. & Son an agreement in writing conditioned that said V. M. & M. Co. would convey to said F. E. & Son, or either of them, the said personal property, consisting of a sawmill and belongings, and said real estate, if the said firm, or either of them, would pay to said V. M. & M. Co. the amount due said company from said firm at any time within a period of eight months. Held, such agreement did not constitute the deed a mortgage.
FRAUD.-The evidence in this case examined and held not to establish fraud.
(Syllabus by the court.)
APPEAL from District Court, Latah County.
Affirmed, with costs.
Sweet & Steele, for Appellant.
Testimony shows the deed to have been a mortgage. If the paper can be permitted to stand at all, and as we have not asked its cancellation, we suppose it must stand. If a partner attempts to defraud his copartner, and any other person conspires with him in that attempt, then anything they may accomplish is void, as the law does not permit a third person to conspire with a partner against a copartner. (Parsons on Partnership, 3d ed., pp. 177, 178, note i, beginning p. 112, 113, 178.) It makes no difference that the fraudulent transaction is consummated at a public sale. (Bump on Fraudulent Conveyances, 261-266.) The first point to which we direct the attention of the court is, that the purchase price was an antecedent debt. That the defeasance stated that upon the repayment to respondent of the purchase price, which was an antecedent debt, the property should be transferred back. ( Montgomery v. Spect, 55 Cal. 352; Sandfoss v. Jones, 35 Cal. 481; Kelley v. Leachman, 3 Idaho 392, 29 P. 849; Russell v. Southard, 12 How. 139; 5 Meyer's Fed. Dec. 121.)
Forney, Smith & Moore, for Respondents.
If all the allegations of the complaint charging fraud are true, they are insufficient to constitute fraud upon Felland. (Cooley on Torts, 474; 1 Story's Equity, 186, 187; Kerr on Fraud and Mistake, 1, 2; 2 Pomeroy's Equity Jurisprudence, secs. 872-876.) The allegations of the complaint charging fraud are unsupported by the evidence. The deed to the forty acres of land is not a mortgage. ( Vance v. Anderson, 113 Cal. 532, 45 P. 816; Jones on Mortgages, secs. 256-282; Devlin on Deeds, sec. 1115; 3 Pomeroy's Equity Jurisprudence, sec. 1196; Henly v. Hotaling, 41 Cal. 22; People v. Irwin, 14 Cal. 428; Cornell v. Hall, 22 Mich. 377; Smith v. Crosby, 47 Wis. 160, 2 N.W. 104; Voss v. Eiler, 109 Ind. 260, 10 N.E. 74; Montgomery v. Spect, 55 Cal. 352; Horbach v. Hill, 112 U.S. 144, 5 S.Ct. 81; Conway etc. v. Alexander, 7 Cranch, 218; Winters v. Swift, 2 Idaho 61, 3 P. 15.) Where there is a substantial conflict in the testimony the judgment of the lower court will not be disturbed. (Sabin v. Burke, 4 Idaho 28, 37 P. 352.) The question, whether or not a deed absolute on its face is a mortgage depends entirely upon the intention of the parties to the transaction. This intention can only be determined from their conduct and expression of intention and it leaves the matter in each case almost wholly and entirely a question of fact. There are no set rules of law that will control in every case, but one of the strongest evidences of the intention of the parties is whether or not the relation of debtor and creditor exists between grantor and grantee with reference to the consideration of the conveyance. (Jones on Mortgages, sec. 269; Winters v. Swift, 2 Idaho 61, 3 P. 15; Vance v. Anderson, 113 Cal. 532, 45 P. 816, and cases cited; Devlin on Deeds, 1115; 3 Pomeroy's Equity Jurisprudence, sec. 1196; Cornell v. Hall, 22 Mich. 377; Horbach v. Hill, 112 U.S. 144, 5 S.Ct. 81 (this opinion is by Justice Field); Conway v. Alexander, 7 Cranch, 18 (this opinion is by Chief Justice Marshall).
This is an action brought for an accounting, for the setting aside of a sale under a chattel mortgage, and for declaring a deed absolute upon its face to be a mortgage. The facts, as alleged in the complaint, are substantially as follows: In the month of March, 1891, plaintiff and two of the defendants, Ole Edwardson and Ole O. Edwardson, entered into a copartnership, for the purpose of engaging in the business of manufacturing lumber and doing a general sawmilling business, under the firm name and style of Felland, Edwardson & Son. In the course of their business, and between said month of March, 1891, and the third day of March, 1894, said firm had become indebted to the defendants the Vollmer Milling and Mercantile Company in the amount of $ 2,500, which indebtedness was evidenced by divers promissory notes executed by said firm to the said Vollmer Milling and Mercantile Company, which notes were secured by a chattel mortgage executed by said firm to said Vollmer Milling and Mercantile Company upon certain personal property described in the complaint. That all of said notes secured by said mortgage became and were due long prior to March 3, 1894. Said notes were further secured by a mortgage upon real estate described in the complaint, executed by said firm, or the members thereof. That all of said notes so secured became and were due long prior to March 3, 1894. The complaint alleges the property covered by the chattel mortgage to be of the value of $ 6,000, and that the real estate is of the value of $ 2,000. The complaint further alleges that some time prior to March 3, 1894, the said Vollmer Milling and Mercantile Company entered into an agreement with Ole Edwardson, one of the defendants, and a member of said firm of Felland, Edwardson & Son, by which it was agreed that the said mortgagee should, for the purpose of cheating and defrauding the plaintiff, foreclose said chattel mortgage, and at the sale thereunder bid in the property covered thereby for the use and benefit of said Ole Edwardson. The complaint further alleges that it was also agreed between said parties that unless the firm of Felland, Edwardson & Son should deed the property described in the real estate mortgage to the Vollmer Milling and Mercantile Company, the said real estate mortgage would also be foreclosed, and that said property should be purchased by said corporation for the sole use and benefit of the said Ole Edwardson; it being a part of the said agreement that as soon as the said corporation should realize enough money out of the use of said property and proceeds of the business to pay the indebtedness due from said firm to said corporation, or as soon as said debt should be paid by said Ole Edwardson, all the said property should be transferred to the said Ole Edwardson, and that the said Vollmer Milling and Mercantile Company should take possession of said property, and conduct and manage the business of manufacturing saw logs into lumber, and should account to said Ole Edwardson for the proceeds derived there-from, until such time as the indebtedness should be paid. The complaint proceeds to state that a sale of the property included in the chattel mortgage was had. It is not pretended but the sale was regularly and legally conducted, but the plaintiff avers that "said sheriff's sale was conceived in fraud, and that it was not made in good faith, and that, while regular upon its face. it was used, and was intended to be used, by said Vollmer Milling and Mercantile Company and said Ole Edwardson as a means through which to cheat, defraud and deprive plaintiff of his interest in said business and said property, etc." Not a single fact or circumstance is stated that tends in the slightest degree to establish fraud. Something more is required, we apprehend, in a pleading intended to establish or set forth a fraudulent transaction, and seeking relief therefrom, than a mere reiteration of the words "cheat, wrong and defraud." The complaint shows a bona fide indebtedness due and owing from the firm of Felland, Edwardson & Son to the Vollmer Milling and Mercantile Company;...
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