Ichenhauser Co. v. Landrum's Assignee

• Decision Date: 22 April 1913
• Citation: 153 Ky. 316,155 S.W. 738
• Parties: ICHENHAUSER CO. v. LANDRUM'S ASSIGNEE.
• Court: Kentucky Court of Appeals

155 S.W. 738

153 Ky. 316

ICHENHAUSER CO. v. LANDRUM'S ASSIGNEE.

Court of Appeals of Kentucky.

April 22, 1913

Appeal from Circuit Court, McLean County.

Action by W. F. Landrum's assignee for settlement of his trust in which the Ichenhauser Company filed a petition for enforcement of its mortgage. Judgment for plaintiff, and the Ichenhauser Company appeals. Reversed and remanded for a judgment enforcing the mortgage and for further proceedings.

J. W Boston, of Calhoun, for appellant.

R Alexander, of Calhoun, for appellee.

HOBSON C.J.

For several years previous to 1911 W. F. Landrum did business in the name of the Calhoun Drug Company; and while so doing business he became indebted to the Ichenhauser Company in the sum of $572.71, it being a corporation doing a wholesale business at Evansville, Ind. On February 22, 1911, to secure its debt, he executed to it a mortgage on certain real estate owned by him subject to a lien of $100 in favor of W. Galloway, and a lien of $360 in favor of the Calhoun Planing Mill Company. On April 12, 1911, Landrum made a deed of assignment to Joe H. Miller of all his property for the benefit of his creditors. Miller qualified at once, and soon thereafter brought this suit for the settlement of his trust. The Ichenhauser Company was not made a defendant to the suit. It filed its petition setting up its debt and mortgage, and asking that its mortgage be enforced. By answer to this petition, Miller, as assignee, pleaded that the mortgage was executed by W. F. Landrum to secure a pre-existing debt when he was insolvent in contemplation of insolvency and with the intent to prefer the mortgagee to his other creditors. This answer was filed at the May term of the court and within six months after the execution of the mortgage. Although he prayed that the mortgage be declared a preferential act under the statute, he did not make his answer a cross-petition or a counterclaim. The Ichenhauser Company filed a reply to the answer denying its allegations. At the November term of the court, and more than six months after the mortgage had been recorded, the assignee filed an amended answer, in which he set out the facts more in detail, and again prayed that the mortgage be adjudged preferential. In reply to this amended answer, the Ichenhauser Company pleaded the six-month statute of limitations. Proof was taken, and on final hearing the circuit court adjudged the mortgage preferential. A. O. Oost and the Calhoun Planing Mill Company asserted mechanics' liens on the property. The circuit court sustained the demurrer of the Ichenhauser Company to these claims. The Ichenhauser Company appeals.

The circuit court did not err in refusing to apply the statute of limitations. Although the assignee did not in his answer to the petition seeking the enforcement of the mortgage make his answer a cross-petition or counterclaim, he did assail in the answer the mortgage as a preferential act, and he prayed that it be so adjudged. When the mortgagee replied to this answer denying its allegations, the issue was made up, and there was no need then that the plaintiff should amend his answer and make it a cross-petition or counterclaim. The amended answer simply amended the original answer in matter of detail. It did not assert a new cause of action; it only perfected the cause of action which had been previously set up.

But the evidence does not warrant the conclusion of the circuit court that the mortgage was executed in contemplation of insolvency, and with the design to prefer one creditor to others. The proof for the assignee shows that when the assignment was made Landrum owed...