Moore v. Wood

• Decision Date: 02 March 1901
• Citation: 61 S.W. 1063
• Parties: MOORE v. WOOD et al.
• Court: Tennessee Supreme Court

61 S.W. 1063

MOORE v. WOOD et al.

Court of Chancery Appeals of Tennessee.

March 2, 1901.

Appeal from chancery court, Clay county; T. J. Fisher, Chancellor.

Suit by J. W. McD. Moore against J. L. Wood and others. From a decree dismissing the bill, the plaintiff appeals. Affirmed.

Geo. N. Tillman and Preston Vaughn, for appellant. McMillin & Harris, for appellees.

NEIL, J.

The bill in this case was filed in the chancery court of Clay county on the 19th of May, 1899. Its gravamen is that on the 20th day of December, 1892, the defendant L. C. Marshall and William Strong, partners under the name of Strong & Marshall, executed a mortgage to the defendants J. L. Wood and W. C. Biles, whereby they assumed to manage and control a certain steam sawmill and other property, to be presently described, to secure the payment of a debt alleged to be due from Strong & Marshall to Wood & Biles; also that Strong & Marshall were then indebted to complainant, J. W. McD. Moore, in the sum of $1,767.35; that on the 20th day of September, 1893, Strong & Marshall, for the purpose of securing this indebtedness to the complainant, executed to him a mortgage on the sawmill and property referred to; that this latter mortgage provided that the debt should be paid on or before the 1st day of January, 1895; that, in the event it was not paid then, the property so mortgaged should be subjected to the payment and satisfaction thereof, the property conveyed being a steam sawmill, consisting of boiler and engine, saw carriage, and fixtures belonging to the sawmill, and used in the operation thereof, and the said property known as the "Strong & Marshall Sawmill," other property conveyed also being a wagon used by Strong & Marshall in carrying on their sawmill business; that Wood & Biles, claiming that their mortgage was a valid one, went into possession of the sawmill property, boilers, engines, etc., and all the property mortgaged to complainant, and entered into an arrangement and agreement with Strong & Marshall whereby, or or about the 12th day of June, 1893, they took possession, used, and controlled all the property as owners and purchasers, and from that day assumed and pretended to be the owners of the same; that "the said property, when taken possession of by them, was very valuable, located in a good set of timber, and worth largely more than the debt due to complainant, who had furnished the means to move the mill to this set, and bought much timber, to enable Strong & Marshall to saw out his debt against them; that the said Wood & Biles, from the time they took possession of the said property as aforesaid, began to use the same as their own, and used it from that time until the filing of complainant's bill to enforce his mortgage, which he did on the 30th of May, 1895; that they practically wore out said property in the use thereof, until its value was greatly depreciated, and all the valuable timbers being used up so that it was not worth more than $200 in cash at that time, all good timbers being consumed"; that Wood & Biles' mortgage was fraudulent, and known by them to be such, when they took possession of the property, and from that time forward, and that they so took possession to hinder and defeat the complainant of his just claims and liens against the property; that, in a subsequent litigation between the parties, the said mortgage of Wood & Biles was declared to be fraudulent in this court, and it was decreed that the mortgage executed by Strong & Marshall to complainant was valid and binding on the mortgaged property to the extent that his debt of $1,767.35 was still unpaid, and that it was prior and superior to any debt or claims of Wood & Biles, or either of them, on said property, but, inasmuch as it did not distinctly appear how much of the debt due to complainant was still due and unpaid by the said decree, the cause was referred to the chancery court of Clay county to take and state an account, in order to ascertain the balance due upon the debt to complainant, and that it was also remanded to the chancery court referred to, to the end that the mortgaged property might be sold, and the mortgage lien in favor of complainant enforced; that the decree declaring complainant's priority and the fraudulent character of Wood & Biles' mortgage was unappealed from, and was final; that there has only been paid on complainant's mortgage $648.86, and the balance remains due and unpaid; that the defendants Wood & Biles are therefore indebted to the complainant in the amount so owing to him; that J. L. Wood has a judgment against complainant, part of the assets of Wood & Biles, rendered against complainant in the prior litigation referred to, on February 28, 1899, for $1,113.16; that, by reason of the transactions before referred to, Wood & Biles owe him, and each of them owes him, more than sufficient to cover the judgment of $1,113.16 and interest thereon; that he should have an offset against that decree, Wood & Biles being insolvent, and a decree over for the balance.

The bill states correctly, as above recited, the two mortgages; the date and amount of the decree in favor of J. L. Wood; the decree of this court adjudging that Wood & Biles' mortgage was fraudulent and void, and that the complainant's mortgage was good, and that he was entitled to satisfaction out of the mortgaged property to the exclusion of Wood & Biles, or prior to their mortgage. It is not correct as to the financial condition of Wood & Biles. They were not insolvent. It states correctly the amount realized upon the complainant's debt, with the exception that $165 should be added for the price of the mill purchased by Moore upon the sale made on the remand. It states the true amount of complainant's debt originally. The bill does not state correctly the facts concerning the possession taken of the mill, and it fails to state that complainant ever demanded possession under his mortgage, or that he sought possession prior to May 30, 1895, when complainant filed his bill, the date of which filing is truly stated. The facts concerning the taking possession of the mortgaged property are as follows: Strong & Marshall were indebted to the complainant, as stated, in the sum of over $1,700. In order to collect this debt, the complainant's agent, one Comer, caused the mill of Strong & Marshall to be moved from a place called "Union Hill" to the land of one J. B. Moore. The expectation of Comer was that, by the operation of the mill, the amount of the debt due to the complainant would be realized, however. After the mill was set up, and about the time operations were begun, Wood & Biles, who, as stated, had a mortgage on the property, said to Comer, in substance, if they were not allowed to participate in the proceeds of the mill they would foreclose their mortgage. But, in order to properly understand the bearing of this fact, it should be stated that, before the mill was moved to the "J. B. Moore set," Comer was fully acquainted with the fact that Wood & Biles had a mortgage, and also that they had a debt against Strong & Marshall. Some talk was had between them to the effect that there was enough lumber in sight to pay off Wood & Biles, if they could get it. However, it was then agreed between Comer and Wood & Biles that the latter should have a certain portion of the proceeds of the mill (perhaps one-half or one-third, — the exact amount is not now material), upon its removal to the "J. B. Moore set." When the mill was set up at that place and ready to run, or about that time, Comer said, or Wood & Biles heard that he said, he could not let them have so much of the proceeds of the mill. Thereupon they went to see Comer, and said to him, in substance, that they must have some money out of the mill; if not, they would foreclose their mortgage. Comer said he could not let them have so much as had been agreed and run the mill. In this situation of affairs, a contract was entered into between the parties, on the 12th of June, 1893, for the purpose of...