Parker v. Clary
| Decision Date | 08 January 1958 |
| Citation | 154 N.E.2d 641,106 Ohio App. 295 |
| Parties | , 7 O.O.2d 59 PARKER, Appellee, v. CLARY et al., Appellants. |
| Court | Ohio Court of Appeals |
Syllabus by the Court.
1. In an action under Section 1313.56 et seq., Revised Code, to set aside a chattel mortgage, plaintiff must prove by a preponderance of the evidence both that the mortgage was made to hinder, delay or defraud creditors and that the mortgagee knew of the debtor's fraudulent intent.
2. In such case, an intent to hinder or delay creditors must be coupled with an intent to defraud, as demonstrated either by the extent of the hinderance or delay intended or by the circumstances surrounding the making of the mortgage.
3. In an action against joint defendants, the implication of an admission which arises as the result of one defendant's failure to answer the petition is binding only as between plaintiff and such defendant, and does not in any manner bind the other defendants.
Howard A. Traul, Bellefontaine, for appellants.
Goslee & Dunlap, Bellefontaine, for appellee.
This is an appeal on questions of law and fact from an action under the provisions of Section 1313.56 et seq., Revised Code, to set aside a chattel mortgage executed by the defendant Clary to the defendants Dinova Brothers as mortgagee. The judgment of the Common Pleas Court was for the plaintiff and the cause has been tried de novo to this court on the transcript of the evidence in the lower court.
Plaintiff claims that on November 8, 1955, he recovered a judgment (pro confesso) against defendant Clary in the sum of $1,092, with interest thereon at 6% per annum from November 8, 1955, and costs of suit; that an execution issued thereon was returned January 9, 1956, wholly unsatisfied; that on the morning of March 16, 1956, in the course of proceedings in aid of execution filed by plaintiff, defendant Clary disclosed that he was the 'owner' of a certain 1953 Ford tractor chassis and cab; that upon learning this, plaintiff caused alias execution to be issued on his cognovit judgment pursuant to which the sheriff levied upon and seized the vehicle on March 17, 1956; and that on March 16, 1956, following the hearing of plaintiff's proceedings in aid of execution, defendant Clary conveyed the vehicle by means of chattel mortgage to the defendants Dinova Brothers.
Plaintiff claims further that this conveyance was made by defendant Clary 'with intent to hinder, delay and defraud his creditors and this plaintiff' and received and accepted by defendants Dinova Brothers 'with full knowledge of said fraud.'
Summonses on plaintiff's petition were served on each of the defendants. Dinova Brothers filed an answer and cross-petition, the answer admitting the execution of the chattel mortgage and generally denying the other material allegations of plaintiff's petition, and the cross-petition claiming an artisan's lien for work done and parts furnished on and for said vehicle, claiming a lien by virtue of the chattel mortgage, testimony of Clary and of Frank Dinova. in the amount of the artisan's and mortgage lien. No claim was made, nor does the evidence show, that said mortgage was in default in any respect and no summons on said cross-petition was served either upon the plaintiff or upon the defendant Clary. Plaintiff filed a reply and answer in the form of a general denial to the answer and cross-petition. In their brief, filed in this court, Dinova Brothers admit that the evidence does not support their claim of an artisan's lien and that the cause of action for same should be dismissed. Defendant Clary did not file an answer, either to plaintiff's petition or to defendant Dinova Brothers' cross-petition, nor does the record indicate that he otherwise entered his appearance in the cause.
Plaintiff's cognovit judgment, the issuance of execution and alias execution thereon, the fact of proceedings in aid of execution, and the levy of alias execution at about five o'clock on the afternoon of March 17th, are all undisputed in the evidence.
The only other evidence of any probative value reflecting upon the intent of Clary at the time of the execution and delivery of the chattel mortgage and the knowledge by Dinova Brothers of such intent was the testimony of Clary and of Frank Dinova. Clary testified that he and Frank Dinova had been on friendly terms for five or six years; that although he 'bought' the vehicle in question on November 10, 1954, from a Mrs. Dearth the title was not assigned to him until February 11, 1956, as prior to that time he still owed the seller money and was leasing the vehicle on a mileage basis; that Frank Dinova knew about the hearing in aid of execution; that after the hearing Clary and Dinova went immediately to an attorney's office to have the note and chattel mortgage prepared; that the vehicle 'was substantially all of the property' that he 'owned free and clear of any debt' (emphasis added); that he did not own any real estate; that Mr. Dinova accompanied him to the clerk's office where a title certificate was issued to Clary; and that in February 1956, Clary had also purchased a 1956 tractor from Dinova Brothers, giving a mortgage back in the amount of $7,000, of which amount Clary still owed at least $6,500. Frank Dinova testified that he had been friendly with Clary for five to six years; that he had done work for him at various times on various vehicles which Clary had owned; that Clary had a running account with Dinova Brothers for gas, labor and materials which amounted to $2,329, and odd pennies, on March 16, 1956; that he had asked Clary for security on the account several times prior to that date; that Clary came to him after lunch on March 16, 1956, and told him that he would give him a note and mortgage; that Clary said nothing to him at the time that 'certain proceedings had been had in this court under which there was an effort being made to collect money from him'; that he knew only what he read in the papers as to creditors other than himself pursuing Clary; that he knew Parker 'had a judgment--what I read in the paper'; that Dinova did not see that Clary got title to the vehicle; that Clary got title himself; that Clary's bill 'was sizeable enough amount I needed security, but I did not take that note to beat anybody else out'; that he had ledger sheets and invoices (which were produced and admitted in evidence) to show the nature and amount of the account; that Clary also owns a 1950 International truck, subject to mortgage to someone else; that he had to have some way of having security for Clary's account 'and still let him work and pay for repairs'- ; that, although he had seen about the plaintiff's judgment in the paper, he did not know whether or not it had been paid; and that, in taking the mortgage, he 'just wanted to propect myself.'
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