Grosshans v. Gold

• Citation: 49 Neb. 599,68 N.W. 1031
• Parties: GROSSHANS ET AL. v. GOLD ET AL.
• Decision Date: 18 November 1896
• Court: Nebraska Supreme Court

49 Neb. 599

68 N.W. 1031

GROSSHANS ET AL.

v.GOLD ET AL.

Supreme Court of Nebraska.

Nov. 18, 1896.

Syllabus by the Court.

A mortgage given to secure a pre-existing debt will not be declared void from the fact alone that the mortgagee, at the time of its execution, had notice of an intention on the part of the mortgagor to defraud creditors of the latter. In order to avoid the security in such case, the mortgagee must have participated in the fraudulent purpose of the mortgagor. Jones v. Loree, 56 N. W. 390, 37 Neb. 816.

Error to district court, Clay county; Hastings, Judge.

Action by Henry Grosshans and others against William Gold & Co. Judgment for defendants. Plaintiffs bring error. Reversed.L. P. Crouch and E. E. Hairgrove, for plaintiffs in error.

T. H. Matters and C. J. Dilworth, for defendants in error.

POST, C. J.

This controversy involves the title and right of possession to a certain crib of corn claimed by the plaintiffs in error, who were also plaintiffs below, through one August Grosshans, by means of an instrument which is in form a bill of sale, but in legal effect a chattel mortgage, the purpose of which was to indemnify plaintiffs in error on account of liabilities assumed by them as sureties for the mortgagor. The foundation of the defendants' claim is a levy upon the corn in controversy by one Stewart, as constable within and for Clay county, to satisfy a certain judgment recovered by them against the said August Grosshans before a justice of the peace for said county.

The burden was upon the plaintiffs to prove the good faith of the contract through which they claim, for two reasons, viz.: (1) The parties to said transaction are brothers, and the effect thereof is to defeat other creditors of the said August, who was then insolvent. (2) There was no change of possession of the property thereby conveyed. It is shown by the undisputed evidence that the plaintiffs were, at the date in question, liable as sureties for the said August Grosshans in a large amount, of which the said Henry Grosshans has subsequently paid the sum of $10,000, and of which the said Fred Grosshans has paid $5,765. Had the result depended upon the sufficiency of the consideration for the transfer, the plaintiffs would have been entitled to recover, and the district court would, no doubt, have directed a verdict in their favor. But there is evidence of other transfers by the said August, bearing the same date as the instrument here involved,...