Gregory v. Whedon

• Decision Date: 09 April 1879
• Parties: E. MARY GREGORY, PLAINTIFF IN ERROR, v. CHARLES O. WHEDON AND OTHERS, DEFENDANTS IN ERROR
• Court: Nebraska Supreme Court

1 N.W. 309

8 Neb. 373

E. MARY GREGORY, PLAINTIFF IN ERROR, v. CHARLES O. WHEDON AND OTHERS, DEFENDANTS IN ERROR

Supreme Court of Nebraska

April 9, 1879

ERROR from the district court for Lancaster county. The facts of the case are stated in the opinion.

AFFIRMED.

Hunter & Sawyer, for plaintiff in error.

The mortgage in question was void:

First. Because it was not filed till October 21, 1876, while E. Mary Gregory purchased and took possession October 4, 1876.

Second. Because it purports to cover a stock of goods sold and replenished, and gives mortgagors right of possession and power to sell in the usual course of business, and does not even require the mortgagors to account for the proceeds of sales.

Third. Because it purports to cover "all goods to be hereafter purchased by us (the mortgagors) during the time this chattel mortgage remains in force," without regard to the character or place of storage of such goods. Tallon v Ellison, 3 Neb. 73. Williams v. Evans, 6 Neb 219. McCleery v. Allen, 7 Neb. 21. Herman on Chattel Mortgages, sec. 101. Edgell v. Hart, 3 Barb. 380. Robinson v. Elliott, 22 Wall., 513. Place v Langworthy, 13 Wis. 629. Steinart v. Duester, 23 Wis. 136. Horton v. Williams, 21 Minn. 187.

At law a mortgage of property, not then in existence, or not belonging to the mortgagor, but to be acquired in future, is void as to that property. Herman on Chattel Mortgages, sec. 46, p. 89. Bellows v. Wells, 36 Vt. 599. Head v. Goodwin, 37 Me. 181. Pierce v. Emery, 32 N.H. 484. Otis v. Sill, 8 Barb. 102. Hamilton v. Rogers, 8 Md., 301. Pettis v. Kellogg, 7 Cush., 456.

Mason & Whedon, for defendants in error.

1. Hastings and E. Mary Gregory were either joint purchasers or partners in the purchase of these goods, and in either event notice to one was notice to the other, and both Hastings and Gregory, jr., had notice of the fraudulent intent of J. D. Minshall & Co., and of their purpose to hinder, delay, and defraud purchasers. Chapel v. Washburn, 11 Ind. 303. 1st Greenl. Evidence, sec. 174, and authorities there cited. Parker v. The State, 8 Blackford, 292. Wharton's Law Evidence, sec. 1192.

2. In this case the husband of E. Mary Gregory purchased the stock of goods, with Hastings. Hastings & Gregory had actual notice of the fraudulent intent of J. D. Minshall & Co., and paid no money or property, and took the conveyance to E. Mary Gregory & Hastings, for the purpose of defrauding creditors; and this sale cannot prevail over the mortgage, especially under the circumstances. Guthrie v. Gardner, 19 Wend., 414. Snyder v. Sponable, 1 Hill, 571.

3. The sale by J. D. Minshall & Co. to E. Mary Gregory was fraudulent and void, and the jury so found.

The mortgage of J. D. Minshall & Co. to Dodd, Brown & Co., was good between the parties to it, even before record, and after Dodd, Brown & Co. took possession of the stock under the mortgage, the same was validated as to creditors. Brown v. Webb, 20 Ohio 389. Moody v. Wright, 13 Metc., 17. Mitchell v Winslow, 3 Story, 630. Farmers' Loan Co. v. Commercial Bank, 11 Wis. 207. Titus v. Mabee, 25 Ill. 257. Chapin v. Cram, 40 Me. 561. Gay v. Bidwell, 7 Mich. 519.

OPINION

MAXWELL, CH. J.

In May, 1876, J. D. Minshall & Co., being indebted to Dodd, Brown & Co. in the sum of $ 1800.00, executed and delivered to said firm certain promissory notes; and to secure the payment of the same, executed and delivered to said Dodd, Brown & Co., a chattel mortgage on the stock of goods in their store in the city of Lincoln. The mortgage contained the following provisions: "It being the intent hereof to include all goods of every known description, owned and kept by us in said store, and fully and particularly described and mentioned in memoranda of our invoice of said stock taken by us on January 5, 1876; and also, all goods purchased by us and placed in and among said stock since said date, as well as all goods to be hereafter purchased by us during the time this chattel mortgage remains in force. And it is expressly agreed by and between the parties to this instrument, that we, the mortgagors herein, are to continue in possession of said goods, and continue to sell off said goods in the regular course of business until a breach of the conditions hereinafter mentioned--that is to say, so long as we pay said notes at maturity as they respectively fall due; but in case we attempt to dispose of said goods in any other way than the usual course of trade, and in case also that we shall fail or refuse to pay either of said notes at maturity, then and in either case it shall be lawful and right for said Dodd, Brown & Co., their agent or attorney, or the sheriff of Lancaster county, Nebraska, to take immediate possession of said goods," etc. The mortgage was properly signed and acknowledged, but was not recorded until the twenty-first day of October, 1876.

On the fourth day of October, 1876, Minshall & Co. sold their entire stock of goods, book accounts, shelving, counters, fixtures, and furniture to the plaintiff herein and one Enoch Hastings, a clerk, for an alleged consideration of $ 4000.00, Hastings and the plaintiff each giving their notes for $ 2000.00. Afterwards the notes appear to have been taken up and bonds substituted in their stead, conditioned that Hastings & Gregory should pay the debts of J. D. Minshall & Co., amounting to about $ 4500.00. Gregory & Hastings divided the goods in question, Hastings taking his portion away from Lincoln to another point in the state.

On the twenty-first day of October, 1876, Dodd, Brown & Co. recorded their mortgage, and immediately thereafter took possession of the goods in question, remaining in the store of J. D. Minshall & Co. The plaintiff brought an action of replevin to recover possession of the goods. Upon the trial of the case, the jury returned a verdict for the defendants, upon which judgment was rendered. The plaintiff brings the cause into this court by petition in error.

A number of errors are assigned that we do not deem it necessary to notice. The principal question involved in the case is the validity of the mortgage, given by J. D. Minshall & Co. to Dodd, Brown & Co., under which the goods were taken.

In Tallon...