Hayes Woolen Co. v. Gallagher

• Decision Date: 16 October 1894
• Docket Number: No. 8863.,8863.
• Citation: 58 Minn. 502
• Parties: THE JOSEPH M. HAYES WOOLEN CO. <I>vs.</I> WILLIAM D. GALLAGHER.
• Court: Minnesota Supreme Court

58 Minn. 502

THE JOSEPH M. HAYES WOOLEN CO.vs.

WILLIAM D. GALLAGHER.

No. 8863.

Supreme Court of Minnesota.

Submitted on briefs October 8, 1894.

Affirmed October 16, 1894.

Appeal by plaintiff, The Joseph M. Hayes Woolen Company, a corporation, from an order of the District Court of Hennepin County, Robert D. Russell, J., made March 24, 1894, denying its motion for a new trial.

Julius H. Krueger was a merchant tailor carrying on business at Minneapolis. The plaintiff was doing business at St. Louis, Mo., and on September 1, 1893, sold Krueger goods to the value of $1,058. Three days thereafter at his request it paid off a mortgage of $300 on his stock, held by J. H. Thompson and took a new mortgage on his entire stock of goods for $1,358 which was duly filed September 4. He continued in possession and sold goods and used the proceeds and plaintiff knew this. He never made any report or accounting to plaintiff of his sales. On November 14, 1893, Krueger, being insolvent, assigned to defendant, William D. Gallagher in trust for his creditors. Gallagher took possession of so much of the mortgaged property as remained unsold inventoried at $950. Plaintiff demanded these goods claiming title under its mortgage. Being refused it brought this action to recover their value. The trial court held the chattel mortgage to be fraudulent as against Krueger's creditors and ordered judgment for defendant. Plaintiff moved for a new trial. Being denied it appeals.

Keith, Evans, Thompson & Fairchild, for appellant.

Gallagher & Gallagher, for respondent.

CANTY, J.

On September 1, 1893, the plaintiff sold on credit to the insolvent, Krueger, a merchant tailor, goods of the value of $1,058. At that time there was a chattel mortgage to a third party on his stock of merchandise, the balance due on which was $300. On September 4th plaintiff paid this mortgage at the request of Krueger, who then gave plaintiff a new chattel mortgage on his stock for $1,358, being the amount of this $300 and the $1,058 owing by him to plaintiff as aforesaid. Krueger afterwards paid plaintiff $300 on this mortgage.

Thereafter, on the 14th of November, 1893, Krueger, being insolvent, made an assignment to the defendant for the benefit of his creditors, under Laws 1881, ch. 148, as amended. The assignee qualified, and took possession of said mortgaged stock, and plaintiff brought this action against him for damages for the conversion of the same. The case was tried by the court below without a jury on a stipulated statement of facts. The court found as a fact that at the time the last-named mortgage was executed "it was the intention of both the mortgagor and mortgagee therein that said mortgagor should remain in the possession of all said property, sell the same in the usual and ordinary course of trade, and apply the proceeds of such sales to his [the mortgagor's] use."

As a conclusion of law the court found that said mortgage was fraudulent and void, and ordered judgment for the defendant. From an order denying its motion for a new trial, plaintiff appeals.

It is assigned as error that...