Kilpatrick-Koch DRY Goods Co. v. McPheely

CourtSupreme Court of Nebraska
Citation56 N.W. 389,37 Neb. 800
PartiesKILPATRICK-KOCH DRY GOODS CO. v. MCPHEELY.
Decision Date04 October 1893
OPINION TEXT STARTS HERE
Syllabus by the Court.

1. A debtor in failing circumstances has a right to secure or pay in full a portion of his creditors, to the exclusion of the others; and whether, in so doing, he was actuated with a fraudulent purpose, is a question of fact, and not of law.

2. Where a plaintiff in attachment claims the debt for which he sues was fraudulently contracted, and, to sustain such claim, offers in evidence a statement (alleged to be false) made by the debtor to his banker, and by the latter communicated to plaintiff, to render such communication admissible it must be identical with the statement made, or the substance of it, and not the banker's conclusion deduced therefrom.

Commissioners' decision. Error to district court, Dawes county; M. P. Kinkaid, Judge.

Action in attachment by the Kilpatrick-Koch Dry Goods Company against William S. McPheely. From an order discharging the attachment, plaintiff brings error. Affirmed.Albert W. Crites, for plaintiff in error.

Alfred Bartow, R. St. Clair, and J. L. McPheely, for defendant in error.

RAGAN, C.

The plaintiff in error attached a stock of goods belonging to the defendant in error. The district court of Dawes county discharged the attachment, and the plaintiff in error brings the case here, and asks the reversal of this order of the district court. The grounds of attachment alleged in the affidavit are--First, that said defendant has assigned and disposed of his property with intent to defraud his creditors; second, that the defendant fraudulently contracted the debt.

As to the first ground of attachment, the evidence in the record not only does not show, or tend to show, that the defendant in error had disposed of his property, or any of it, with intent to defraud his creditors, or any of them, but the evidence affirmatively shows that the disposition made by the defendant in error of his property was for the purpose of securing his creditors. It appears from the evidence that the defendant in error owned a stock of merchandise in Chadron, and on the 20th day of February, 1891, the stock was worth $5,425.41, and the book accounts $500, or a total of $5,925.41, exclusive of some store fixtures, the value of which is not shown. On that day the defendant in error executed a chattel mortgage on this stock of merchandise, book accounts, and fixtures, as follows: First mortgage, $2,500; second mortgage, $875; third mortgage, $1,629.39,--and delivered possession of the mortgaged property to the mortgagees. The second mortgage was, by its terms, made subject to the first, and the third subject to the first and second. These mortgages, as the evidence shows, were all made and accepted in good faith, without intent on the part of any one to defraud, and were made to secure honest debts owing by the defendant in error to the mortgagees. The contention of the plaintiff in error seems to be that, as the value of the property mortgaged was $5,925.41, and the debt secured by the first mortgage was only $2,500, the security was so greatly in excess of the amount of the first mortgage debt as to render the mortgage fraudulent in law, whatever that may mean. But these mortgages were all made and filed on the same day, and within a few minutes of each other; in other words, they were one transaction. We are not prepared to say that a mortgage would be fraudulent solely because the value of the property mortgaged was two, or even three, times greater than the debt. Whether it would be, would be a question of fact for a jury or trial court, and not a question of law. A debtor has a right to prefer his creditors,--to pay part in full, to the exclusion of others,--and he has a right to secure the debts of a part of his creditors to the exclusion of the others; and this is true whether he be insolvent or in failing circumstances, or not. All that the law requires of him is that he should act honestly; that his disposition of his property should not be made for the fraudulent purpose of hindering, delaying, or defrauding his creditors; and whether an act of a debtor in the disposition of his property was fraudulent is always a question of fact, and not a question of law. Section 20, c. 32, Comp. St., provides: “The question of fraudulent intent * * * shall be deemed a question of fact, and not of law.” The rule of construction invoked here by the plaintiff in error should not be applied. The court evidently considered the giving of the three mortgages as one transaction, and this was correct.

We...

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26 cases
  • Morrissey v. Broomal
    • United States
    • Nebraska Supreme Court
    • October 4, 1893
  • T. A. Shaw & Co. v. Robinson & Stokes Co.
    • United States
    • Nebraska Supreme Court
    • January 19, 1897
    ... ... facts pleaded, it was necessary that the plaintiff's ... factory, wherein its goods and wares were situated, should be ... kept in operation. The receiver was appointed, as prayed, ... 268, 22 N.W. 698; ... Costello v. Chamberlain , 36 Neb. 45, 53 N.W. 1034; ... Kilpatrick-Koch Dry Goods Co. v. McPheely , 37 Neb ... 800, 56 N.W. 389; Jones v. Loree , 37 Neb. 816, 56 ... ...
  • Grand Island Banking Company v. Costello
    • United States
    • Nebraska Supreme Court
    • May 21, 1895
    ...the court below in finding that appellant's mortgage was void have recently been overruled. (Jones v. Loree, 37 Neb. 816; Kilpatrick v. McPheely, 37 Neb. 800; Farwell Wright, 38 Neb. 445; Kavanaugh v. Oberfelder, 37 Neb. 647; Costello v. Chamberlain, 36 Neb. 45; Whitney v. Levon, 34 Neb. 44......
  • Shaw v. Robinson & Stokes Co.
    • United States
    • Nebraska Supreme Court
    • January 19, 1897
    ...Neb. 531, 19 N. W. 630;Bierbower v. Polk, 17 Neb. 268, 22 N. W. 698;Costello v. Chamberlain, 36 Neb. 45, 53 N. W. 1034;Dry-Goods Co. v. McPheely, 37 Neb. 800, 56 N. W. 389;Jones v. Loree, 37 Neb. 816, 56 N. W. 390;Farwell Co. v. Wright, 38 Neb. 445, 56 N. W. 984;Kavanaugh v. Oberfelder, 37 ......
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