First Nat. Bank of Beaver Creek v. Wiggins, 23169.

• Decision Date: 22 December 1922
• Docket Number: No. 23169.,23169.
• Citation: 154 Minn. 84,191 N.W. 264
• Court: Minnesota Supreme Court
• Parties: FIRST NAT. BANK OF BEAVER CREEK v. WIGGINS, Sheriff.

154 Minn. 84

191 N.W. 264

FIRST NAT. BANK OF BEAVER CREEK

v.WIGGINS, Sheriff.

No. 23169.

Supreme Court of Minnesota.

Dec. 22, 1922.

Appeal from District Court, Rock County; G. W. Buffington, Judge.

Action by the First National Bank of Beaver Creek, Minn., against Frank Wiggins, as Sheriff. From a judgment for defendant, plaintiff appeals. Affirmed.

Syllabus by the Court

In an action in claim and delivery, it is held, that the evidence supports the verdict of the jury, and that the record presents no reversible error.

A chattel mortgage, though filed in the proper office, is presumptively fraudulent as to the creditors of the mortgagor.

The rule applied in Braley v. Byrnes, 25 Minn. 297, construing Gen. St. 1894, § 4129, was not changed nor abrogated by the revision of the statute in 1905 (Rev. Laws 1905, § 3461), when the section was molded into its present form. The substance of the statute remains as before the revision.

The rule that a chattel mortgage is fraudulent as to creditors where the mortgagor is by the instrument of mortgage, or by other written or parol agreement, permitted to sell and dispose of the mortgaged property without applying the proceeds in reduction of the mortgage debt, followed and applied.

The evidence justified the jury in finding that such an agreement was made or an understanding had between the parties at the time the mortgage was executed, and that in dealing with the property thereafter the mortgagor acted thereon. Hansen & Engan, of Luverne, and A. M. Freeman and Parliman & Parliman, all of Sioux Falls, S. D., for appellant.

Canfield & Michael, of Luverne, for respondent.

BROWN, C. J.

Action in claim and delivery for the possession of certain personal property alleged to belong to plaintiff and wrongfully detained by defendant. Defendant had a verdict, and plaintiff appealed from a judgment rendered thereon.

It appears that during the dates and times involved in the action, M. O. Page and B. R. Page were copartners engaged in the automobile business at Luverne, Rock county, this state. They conducted a general retail trade in automobiles and automobile supplies and accessories; carrying a stock in trade of some $7,000 or $8,000 in value. On the 23d day of May, 1921, they executed in due form of law a chattel mortgage covering their stock to plaintiff in this action to secure an indebtedness claimed to be due and owing plaintiff at that time in the sum of $5,392.77, which was represented by certain promissory notes executed by the mortgagors. The mortgage was duly acknowledged, and filed in the proper office on the same day. Subsequent thereto the mortgagors remained in the possession of the mortgage stock and continued the conduct of their business as before the mortgage was made and filed. Plaintiff's right of recovery of the property is predicated solely on that mortgage.

Defendant is the sheriff of Rock county and levied upon and took the mortgaged property into his possession, (1) under an attachment issued against Page Bros., and (2) under an execution issued out of the district court of the county against M. O. Page, and thereunder he justifies his right to retain the property for the purpose of a sale as required by law in such cases. The attachment was issued and levy made in October, 1921, and subsequent to the execution and filing of the mortgage held by plaintiff. The facts stated appear from the answer of defendant, to which plaintiff replied, denying the allegations of new matter therein contained.

The questions presented by the pleadings, and in fact litigated on the trial, centered around the validity of the chattel mortgage, the bona fides thereof, and the good faith of the parties thereto; also, the further question whether it was the understanding of the parties at the time that the mortgagors should continue in the transaction of their business precisely as though no mortgage had been given to plaintiff, in the sale of the stock, replenishing the same as occasion required, without accounting to plaintiff and the payment of the proceeds to it for application on the mortgage debt. This was the principal issue submitted to the jury; and their verdict for defendant necessarily is founded on the claim that the mortgage was not a bona fide transaction, but rather to hinder and delay the creditors of the mortgagors.

The assignments of error present the questions: (1) Whether the evidence supports the verdict, (2) whether there was error in the admission or exclusion of evidence, and (3) whether the court erred in its instructions or refusals to instruct the jury. We answer each in the negative.

[1] 1. We have examined and considered the record with care and reach the conclusion that the evidence is sufficient to support the verdict. Nor was there any error in the admission or exclusion of evidence of a character to call for a new trial. The main issue in the case was whether the mortgage under which plaintiff claims the property was fraudulent as to creditors. Some of the evidence sought to be drawn out by plaintiff on that subject involved conversations relative to the transaction, and rulings excluding questions tending to disclose the subject-matter thereof were not followed with an offer to show the materiality of the same, and there was therefore no reversible error therein. Austin v. Robertson, 25 Minn. 431; 3 Dunnell's Dig. 9717.

[2] 2. The principal contention in...