Hamrick v. Hoover

• Citation: 84 N.E. 28,41 Ind.App. 411
• Decision Date: 19 March 1908
• Docket Number: 6,099
• Parties: HAMRICK, ASSIGNEE, ET AL. v. HOOVER
• Court: Indiana Appellate Court

84 N.E. 28

41 Ind.App. 411

HAMRICK, ASSIGNEE, ET AL. v. HOOVER

No. 6,099

Court of Appeals of Indiana

March 19, 1908

From Grant Circuit Court; H. J. Paulus, Judge.

Suit by William H. Hoover against Ambrose D. Hamrick and others. From a decree for plaintiff, defendants appeal.

Affirmed.

Elias Bundy, for appellants.

S. M Sayler, for appellee.

OPINION

MYERS, J.

In the court below appellee sued appellants to foreclose an indemnifying mortgage executed to him by Artemus O. Souers and John S. Hoover, covering a stock of furniture in the town of Van Buren, Indiana, and owned by them as partners, and which they were engaged in selling at retail. The second paragraph of the complaint was answered by Hamrick, as assignee of Souers, by a general denial and by an affirmative paragraph averring that the mortgagors, Souers and Hoover were, by the terms of said mortgage, to keep possession of the mortgaged property and sell any part thereof at retail without any agreement, in the mortgage or otherwise, to account to the mortgagee or to any person in his behalf for the proceeds of sales so made, and that sales were made and the proceeds thereof appropriated by the mortgagors to their own use. A reply in denial formed the issues submitted to the court for trial. Souers and Hoover made default. At the request of appellant Hamrick the court found the facts specially and stated conclusions of law thereon. In substance, the findings are that on March 8 1904, Souers and John S. Hoover were partners and were engaged in selling furniture in the town of Van Buren, Indiana. On said day said firm, with William H. Hoover as surety, borrowed from William Chopson $ 2,000, and executed to him their promissory note therefor. Said $ 2,000 was used in paying the debts of said firm. On March 9, 1904, Souers and John S. Hoover executed to appellee a chattel mortgage on their stock of furniture to indemnify the latter against loss by reason of his said suretyship, and said mortgage was on said last date duly recorded. Said mortgage conveyed to William H. Hoover the then existing stock of goods and articles thereafter purchased and added thereto. Except $ 160, interest, no part of the Chopson note has been paid. The principals on said Chopson note are insolvent. The mortgage provides that, in the event the mortgaged property shall come into the hands of any assignee, the mortgagee shall have the right to take immediate possession of the property. Said property is in the hands of Hamrick as assignee. "There has never been any arrangement or agreement between the mortgagors and mortgagee, whereby the proceeds of sales of the mortgaged property should be applied in payment of the mortgage debt. William H. Hoover had no knowledge, nor does he now have, as to how the proceeds were applied." There is due on the note to Chopson $ 2,098.66, and appellee is liable to Chopson for the same.

Upon the facts found the court stated as conclusions of law: (1) "Plaintiff is entitled to judgment against Souers and John S. Hoover for $ 2,098.66 and costs; (2) plaintiff is entitled to possession of the mortgaged property, and to have it sold by the sheriff and the proceeds applied to the judgment." Hamrick reserved exceptions to the conclusions of law, and over his motion for a new trial judgment was rendered in favor of appellee. Hamrick, as assignee, appeals and assigns that the court erred (1) in its conclusions of law; (2) in overruling his motion for a new trial.

Exceptions to conclusions of law admit that the facts within the issues have been correctly and fully found. Adams v. Pittsburgh, etc., R. Co. (1905), 165 Ind. 648, 74 N.E. 991; Dinius v. Lahr (1905), 36 Ind.App. 425, 74 N.E. 1033. Upon this admission appellant Hamrick argues that the findings bring this case within § 7480 Burns 1908, § 4921 R. S. 1881, and that, therefore, the mortgage is void for fraud to be pronounced as an inference of law. Citing Stout v. Price (1900), 24 Ill.App. 360, 55 N.E. 964; New v. Sailors (1888), 114 Ind. 407, 5 Am. St. 632, 16 N.E. 609. In Stout v. Price, supra, it is held that if the mortgage was made in trust for the party making it it is void, but the existence of the trust must be found as a fact. In New v. Sailors, supra, it is held that "a duly recorded chattel mortgage, given to secure an honest debt, even though it contains a stipulation authorizing the mortgagor to retain possession and sell, will not be presumed fraudulent as against creditors; and, therefore, until the contrary is shown, the law will intend an agreement that the mortgagor should sell as the agent of the...