First Nat. Bank of Peoria v. Jaffray
| Decision Date | 05 April 1889 |
| Citation | 21 P. 242,41 Kan. 694 |
| Parties | THE FIRST NATIONAL BANK OF PEORIA, ILLINOIS, et al., v. EDWARD S. JAFFRAY et al |
| Court | Kansas Supreme Court |
Error from Cowley District Court.
THE opinion contains a sufficient statement of the case.
Jack & Tichnor, and Mansfield, Eaton & Pollock, for plaintiffs in error.
Peckham & Henderson, Irwin Taylor, and Weighley, Bulkley Gray for defendants in error.
OPINION
The First National Bank of Peoria, the plaintiff in error, is a corporation organized under the general banking laws of congress, doing business at the city of Peoria, state of Illinois. William E. Stone is the cashier of the bank. The defendants in error, E. S. Jaffray & Co., the Nonotuck Silk Co., Alonzo W. Rollins, Shaw & Co., King & Fildes, and the Merrick Thread Co., are merchants to whom Day Bros. & Co. were indebted for goods sold and delivered by them to Day Bros. & Co. after the 10th day of January 1884. On the 1st, 2d and 4th days of October, 1884, and on the 2d day of December, 1884, these defendants commenced actions in attachment in various counties of Kansas against Day Bros. & Co., and caused the lands in controversy to be subjected to attachment liens for said indebtedness. Judgments were subsequently rendered in these actions against Day Bros. & Co., and the lands sold to satisfy said judgments. The defendants in error, Weigley, Burrows, and Shaw, purchased some of the lands at the sheriff's sales, and took deeds therefor, and are made parties on that account. The firm of Day Bros. & Co. was engaged in the wholesale and retail dry-goods trade at Peoria, the firm consisting of Lucius L. Day, Herbert F. Day, Gordis R. Cobleigh, William G. Marsters, and Samuel H. Van Sickler. On the 10th day of January, 1884, the firm of Day Bros. & Co. was indebted to the bank in the sum of $ 53,000. The bank demanded payment, or security, and on that day Gordis R. Cobleigh and wife, one of the firm, in whose name the title was vested for the benefit of the firm, executed and delivered to W. E. Stone, cashier of the bank, for its benefit, eleven certain quitclaim deeds, conveying to Stone land in nine different counties in this state, for a stated consideration of $ 35,700. At the same time, another member of the firm deeded to Stone, for the benefit of the bank, real estate in Peoria of the value of $ 25,000. On the 23d day of September, 1884, the firm was indebted to the bank in the sum of $ 83,000, the bank having loaned Day Bros. & Co. $ 30,000 after the 10th of January, 1884. On that day (September 23d) there was a settlement n between these parties, and the indebtedness of the firm to the bank was adjusted as follows: $ 20,576.30 was to be paid by Chas. B. Day, who had bought out their stock of goods; $ 30,000 was to be collected and retained from commercial paper of customers of the firm, which had been delivered to. the bank; $ 18,000 was secured by a trust deed on the homestead of Lucius L. Day; and the balance, $ 15,000, was to be considered secured by the Kansas and Nebraska lands conveyed by Cobleigh to Stone; and Stone executed a deed of defeasance, in which he recites the giving of the eleven quitclaim deeds, and agrees to reconvey the land to Cobleigh upon the payment of the sum of $ 15,000, with interest at eight per cent. per annum.
On the 3d day of October, 1885, this suit was commenced in the district court of Cowley county, seeking to have the nine quitclaim deeds made by Cobleigh to Stone, declared a mortgage to secure the sum of $ 15,000, and for a foreclosure of the same. The lands conveyed by the deeds are situate in the counties of Cowley, Ottawa, Lincoln, Russell, Ellis, Rush, and Barton, and are particularly described in the petition. At the time Cobleigh conveyed the lands to Stone, they were subject to some mortgage liens that were subsequently purchased by the bank, and a foreclosure is prayed as to them. At the trial a default was entered against Day Bros. & Co., William Jack, Leslie D. Puterbaugh, William H. Herren, Samuel W. McFarlin, Sarah J. McFarlin, Charles F. Leonard, James D. Curtis, and Francis M. Boyer. The case was tried on the issues joined between the bank and the defendants in error. E. S. Jaffray & Co., Alonzo W. Rollins, Shaw & Co., King & Fildes and the Merrick Thread Co. filed like answers, each setting up claims against Day Bros. & Co., upon which attachment had been issued and levied upon the lands described in the petition of the bank and of Stone. Frank S. Weigley filed an answer, in which he denies the existence of any indebtedness by Day Bros. & Co. to the bank, on the 10th day of January, 1884; admits the execution of the deeds by Cobleigh to Stone, but denies that they were intended as mortgages, and alleges that they were made for the purposes of fraud. He denies that any of the indebtedness of Day Bros. & Co. to the bank remained unpaid on the 23d day of September, 1884, and alleges that it had all been paid; denies that the parties had an accounting on the 23d of September, 1884, and that said pretended deeds should represent a mortgage of $ 15,000. He alleges the insolvency of Day Bros. & Co. before the 10th of January, 1884, the bank's knowledge of their condition, and that there was some secret and fraudulent scheme entered into by and between the bank and Day Bros. & Co., by which the bank was to aid them in protecting their property from the efforts of creditors to collect their just dues, and that these pretended conveyances were executed and delivered for that purpose, and in pursuance of that corrupt and fraudulent agreement. He then alleges that he is the owner in fee simple of certain tracts of said land, by virtue of being a purchaser at judicial sales made of such lands in proceedings had in certain actions, wherein Rollins, Shaw & Co., Morrison, Herriman & Co., Edward S. Jaffray & Co., obtained judgments against Day Bros. & Co., and orders of sale of the land attached in these actions.
Edward D. Burrows filed an answer similar to that of Weigley, and he claims to be the owner of certain tracts of the land by virtue of judicial sales in actions brought against Day Bros. & Co. by other creditors.
Theodore A. Shaw filed an answer to the others, claiming to have purchased a portion of the land at judicial sale in a creditors' suit. They all prayed that the mortgage be declared fraudulent, for various causes hereinafter stated.
The claims of these defendants upon which they brought their actions in this state, and attached the various tracts of land involved in this controversy, were, with a few exceptions, contracted by Day Bros. & Co. with their creditors after the 10th day of January, 1884.
At the September term, 1886, the court below rendered a judgment in favor of the bank, against Day Bros. & Co., for $ 15,000; adjudged that the mortgage had been executed by Cobleigh, and received and accepted by Stone, and held by the bank, for the purpose and with the intent on the part of each and all of the parties to hinder, delay and defraud the creditors of Day Bros. & Co.; and that it is void as to these creditors, who are made defendants in error. All exceptions were saved, a new trial was asked for and refused, and the case is here for review on the whole record. All the evidence is in depositions and documents, and the questions of fact may be fully examined and determined. There are many errors assigned, but probably a few controlling questions will determine the case.
It is claimed by the defendants in error that the conveyances made by Cobleigh to Stone are fraudulent in fact, and void in law as against them as creditors of Day Bros. & Co. The principal facts relied on to support this judgment are: First, that Day Bros. & Co. were insolvent on the 10th day of January, 1884; second, that the bank knew of the insolvency; third, that the bank failed or refused for over eight months to record the deeds; fourth, the bank represented to the public that the firm was solvent and composed of men of large property, after they knew of their insolvency; fifth, that the defendants in error relied upon such representations, and gave the firm of Day Bros. & Co. credit on the strength of them; sixth, that the arrangement entered into on the 23d day of September, 1884, between the bank, Day Bros. & Co., and Charles B. Day, was a fraudulent one as to the defendants as creditors of Day Bros. & Co.
While incidentally we will consider and pass upon many of the questions that have been so thoroughly discussed by counsel on both sides, both in their oral argument and in their elaborate briefs, we shall avail ourselves of the right to consider all the evidence in the case, as it is all embraced in documents and depositions, and decide the facts according to the evidence, and determine the case on its merits. It is doubtful whether there is such a finding of all the material facts of the case, in the judgment rendered by the court below, as authorizes us to send a mandate ordering a judgment in this case according to our direction, as contemplated by § 559 of the code. While there is no general finding of the court below, that the facts stated in the answer of the defendants are true, or that all the issues are found in their favor, there are some special findings on particular questions of fact, but they do not embrace all the material facts, and consequently do not conform to what is generally understood under our rules of practice, as "findings of fact." We shall endeavor to give all the questions arising in the case that broad and comprehensive view that is so earnestly urged by counsel for defendants in error. The evidence is very voluminous, and the questions discussed numerous, but some of the rules...
To continue reading
Request your trial