Henderson v. Kendrick
| Citation | 75 N.W. 127,72 Minn. 253 |
| Decision Date | 12 May 1898 |
| Docket Number | 11,135 - (200) |
| Parties | M. BROOKS HENDERSON v. FAYETTE D. KENDRICK |
| Court | Supreme Court of Minnesota (US) |
Appeal by defendant from a judgment of the district court for Ramsey county in favor of plaintiff, as the assignee of Frederick W Faber, insolvent, entered pursuant to the findings and order of Bunn, J. Reversed as to defendant, with directions.
Chattel Mortgage on Store Fixtures to Secure Loan and Past-Due Rent -- Insolvency of Mortgagor -- Valid as to Loan.
On November 20, 1896, F., being insolvent to the knowledge of K., the latter loaned F. $150, and to secure the payment thereof took from him a chattel mortgage on certain store fixtures, and which mortgage also secured the payment to one S. of $300 back rent due from F. to S. The assignee of F brought this action against K. to have the lien of the mortgage removed from the fixtures, and the trial court found as a fact that F., in executing the chattel mortgage, intended to give S. a preference over his other creditors, and adjudged said chattel mortgage invalid. There was no such finding as to K., or that his taking the mortgage was in any respect tainted with fraud as to other creditors of F. Held that, while the mortgage was void as to the $300 back rent due, as being an attempt on the part of F. to give S. a preference over other creditors, it was valid as a security for the loan of the $150 made by K. to F.
Pinch & Dampier, for appellant.
Macdonald & Kane, for respondent.
On and prior to November 20, 1896, one Faber was carrying on the drug business in the city of St. Paul in a store rented of one Ann K. Stees, for whom the defendant, Kendrick, was agent. On the above date, and for a long time prior thereto, Faber was insolvent, which fact was known to defendant, who then loaned to Faber $150, and to secure the same took a chattel mortgage covering the fixtures in said store belonging to Faber, which mortgage also secured the payment of $300 back rent due from Faber to Stees. It was also agreed at the same time that defendant should not take possession of the property covered by said chattel mortgage, but it might remain in Faber's possession, and that he might continue such business in the same manner as if no chattel mortgage had been given on said fixtures, and that defendant would not file said chattel mortgage, but would keep the same in possession, providing Faber should pay, as it became due, his subsequently accruing rent for such store. This mortgage was not filed until January 16, 1897.
On January 19, 1897, Faber, being insolvent, made a general assignment under the insolvency laws of this state to this plaintiff, who, on or about March 23, 1897, pursuant to an order of the court made in the assignment proceedings advertised for sale to the highest bidder Faber's stock of goods and...
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