Paxton & Gallagher v. M. E. Smith & Company

• Decision Date: 06 June 1894
• Docket Number: 5391
• Citation: 59 N.W. 690,41 Neb. 56
• Parties: PAXTON & GALLAGHER v. M. E. SMITH & COMPANY
• Court: Nebraska Supreme Court

59 N.W. 690

41 Neb. 56

PAXTON & GALLAGHER v. M. E. SMITH & COMPANY

No. 5391

Supreme Court of Nebraska

June 6, 1894

ERROR from the district court of Dundy county. Tried below before COCHRAN, J.

AFFIRMED.

J. W James, Howard B. Smith, and Smith & Powell, for plaintiffs in error.

J. S West and Charles B. Keller, contra.

OPINION

POST, J.

This is a petition in error from the district court of Dundy county and presents the following material facts: On the 26th day of August, 1889, one John R. King was the owner of a stock of general merchandise in Benkleman, in said county, of the invoiced value of $ 5,964.47, and the firm of McClain & Sons also engaged as general merchants in Benkleman, owned a stock invoiced at $ 6,600. On the day above named a deal was consummated whereby said stocks were consolidated. As a consideration therefor McClain & Sons executed in favor of King their promissory notes for $ 5,964.47, in amounts of $ 300 each, one of which matured each month. At the same time a written agreement was executed in which it was stipulated that McClain & Sons "shall, as a part of this agreement make, execute, and deliver to party of the first part promissory notes for the sum of $ 5,964.47 as follows: One note for $ 300, due on the 26th day of September, A. D. 1889, and one note for a similar amount due and payable on the corresponding day of each succeeding month until the gross amount of said notes so paid shall be equal to said sum of $ 5,964.47, said notes to bear interest from date at the rate of ten per cent per annum. Party of the first part shall at all times have free access to said store and free opportunity to inspect all books, bills, invoices, and all stock in said store, so far as the same may be necessary to inform himself of and to protect his interest. He shall also be permitted at all times to keep in said store one representative, who may look after and protect the rights and interests of party of the first part. Said representative shall, when not employed, assist in the said store as a clerk during the first two months, and shall therefor be paid by party of the second part such wages monthly as his services are reasonably worth, for two months and no longer, and as such clerk shall be under the supervision and direction of said party of the second part as if employed by party of the second part." In carrying on the business in accordance with the foregoing stipulation McClain & Sons became indebted to various persons, including the plaintiffs in error, to whom, on the 18th day of August, 1890, they owed $ 641.94 for merchandise. On the day last named they executed in favor of plaintiffs in error a chattel mortgage for the amount of said bill upon the entire stock of goods, which mortgage was filed in due form on the next day. On the same day, to-wit, August 20, King took possession of the goods in order to realize the balance due under the contract with McClain & Sons, and on the same day defendants in error commenced a suit by attachment against McClain & Sons in the district court of Dundy county to recover the sum of $ for merchandise, and caused King to be summoned as garnishee, alleging that he had money and credits in his hands belonging to the defendants therein. King answered in due time as garnishee, admitting that he held a sum of money, the proceeds of said goods. At this point the plaintiffs in error were permitted to intervene in the attachment suit and assert their claim to the fund in...