Harris v. Grant

• Decision Date: 13 May 1895
• Citation: 23 S.E. 390,96 Ga. 211
• Parties: HARRIS v. GRANT et al.
• Court: Georgia Supreme Court

23 S.E. 390

96 Ga. 211

HARRIS v. GRANT et al.

Supreme Court of Georgia

May 13, 1895

Syllabus by the Court.

1. The holder of a junior mortgage on personal property, who, with knowledge of the existence of a senior mortgage thereon receives the mortgaged property from the mortgagor, and with his consent appropriates it, in whole or in part, to the satisfaction of the junior mortgage, and then places it beyond the reach of an execution issued upon the foreclosure of the senior mortgage, is liable to the plaintiff in that execution for the value of the property thus received and disposed of,-not, of course, exceeding the amount due upon such execution. This is true although the junior mortgagee did the acts mentioned solely for the purpose of collecting his own debt.

2. On the other hand, the holder of a senior mortgage on personal property, who in good faith, and without fraud, takes the same from his debtor at a fair and reasonable price or valuation, and appropriates it to the satisfaction of such mortgage, does not, for so doing, become liable to the holder of a junior mortgage on the same property.

Error from superior court, Macon county; John J. Hunt, Judge.

Action by Johnson & Harris against T. G. Grant and others. On the death of plaintiff Johnson, the action was continued in the name of a survivor. From a judgment for defendants, plaintiff brings error. Brought forward from the last term. Code, §§ 4271a-4271c. Reversed.

Ryals & Stone and S. A. Reid, for plaintiff in error.

Gustin Guery & Hall, and J. W. Haygood, for defendants in error.

SIMMONS C.J.

Johnson & Harris filed their petition against Grant and De Vaughn, alleging in substance that Grant was indebted to them in a certain sum, and that to secure this debt he had executed to them a mortgage upon a stock of goods then in his store, which mortgage was duly recorded; that prior to the giving of this mortgage he had executed one in favor of De Vaughn for $250, on which he had paid $50, and that subsequent to his mortgage to the plaintiffs he executed another mortgage to De Vaughn, the last-mentioned mortgage being for $205; that, when the plaintiffs pressed Grant for the payment of their debt, he and De Vaughn, with intent to defraud them, made an agreement whereby Grant turned over to De Vaughn all the dry goods in his store which were covered by his mortgage to the plaintiffs, De Vaughn knowing at the time he took the goods that the plaintiffs held a mortgage upon them of prior dignity to De Vaughn's second mortgage; that De Vaughn moved the goods from Grant's storehouse to his own, and mixed them with his own goods, so that they could not be identified, and that, after the foreclosure of the plaintiffs' mortgage, De Vaughn refused to point them out to the sheriff so that he might levy upon them; that the remainder of the goods left in Grant's store proved, upon a sale thereof by the sheriff, to be insufficient to pay off their mortgage; and that Grant was insolvent, and unable to pay the balance due them. The plaintiffs therefore prayed for damages against De Vaughn. There was no demurrer to the declaration. On the trial the plaintiffs proved the knowledge of De Vaughn of their mortgage, and that De Vaughn had received from Grant goods sufficient, not only to pay his first mortgage, which was prior to that of the plaintiffs, but also to pay the second mortgage to De Vaughn, which was subsequent to that of the plaintiffs. On motion of De Vaughn the court granted a nonsuit as to him, but judgment was rendered against Grant for the amount due him by the plaintiffs.

1. The question to be determined is whether, under the facts alleged, the plaintiffs had...