Purple v. Farrington

• Decision Date: 27 May 1889
• Docket Number: 13,008
• Citation: 21 N.E. 543,119 Ind. 164
• Parties: Purple et al. v. Farrington et al
• Court: Indiana Supreme Court

21 N.E. 543

119 Ind. 164

Purple et al. v. Farrington et al

No. 13,008

Supreme Court of Indiana

May 27, 1889

From the DeKalb Circuit Court.

Judgment reversed, with costs.

W. L Penfield, for appellants.

C. A O. McClellan and D. A. Garwood, for appellees.

OPINION

Berkshire, J.

The appellees, as partners, sued the appellants, Johnson and Cannan, as partners, to recover a sum of money claimed to be due them, and averred in their complaint that the said appellants had executed to their co-appellant, Purple, a chattel mortgage upon all the partnership goods owned by them to secure an alleged indebtedness due to the mortgagee from Cannan, one of the partners, contracted long before the existence of the partnership between Cannan and Johnson; that Johnson and Cannan were insolvent when the mortgage was executed, and that the said Purple accepted the mortgage with a full knowledge of all the facts; that the said mortgage was executed by Johnson and Cannan and accepted by said Purple for the purpose of defrauding creditors. With the complaint an affidavit in attachment was filed against Johnson and Cannan, charging them with having sold and conveyed their property, subject to execution, by way of chattel mortgage for the purpose of defrauding creditors. A writ of attachment was issued to the sheriff of DeKalb county, which he executed upon the property described in the chattel mortgage and took possession thereof, the same at the time of the execution of the writ being in the possession of the appellant Purple as mortgagee. Johnson and Cannan moved to quash the writ of attachment, which motion the court overruled. Afterwards the appellees filed an amended complaint, to which the appellants filed demurrers, which were overruled by the court and exceptions saved. After the court had ruled on the demurrers, the appellant Purple answered the complaint by general denial, and at the same time filed a cross-complaint against the appellees and his co-appellants.

In his cross-complaint, the said Purple averred that, on the 14th day of September, 1885, the appellants Johnson and Cannan executed to him their promissory note for $ 351.84, a copy of which was filed with the cross-complaint and as a part of it; that the said note was due and unpaid; that to secure the said note a chattel mortgage was executed by the appellants Johnson and Cannan, a copy of which is likewise filed with the complaint as a part of it; that the appellees afterwards sued out a writ of attachment in this action and caused the sheriff to forcibly dispossess the cross-complainant of said property by virtue of said writ, claiming that it constituted a superior lien on said goods, and they are made parties to answer and show why the said mortgage should not be foreclosed and said property sold to satisfy the said indebtedness due to the cross-complainant. It is also alleged that the said chattel mortgage was duly recorded within ten days after its execution.

The appellees demurred to the cross-complaint and the cross-complainant confessed the demurrer and obtained leave to file an amended cross-complaint, which he did, and which is designated by the clerk as being found beginning with page 10 of the record.

There is some contention by the appellees' counsel as to whether the pleading found at the place referred to in the record is the original or amended cross-complaint. As we have said, the clerk designates it as the amended cross-complaint, but whether it is the one or the other is wholly immaterial; it is evident from all that appears in the record that it is the cross-complaint upon which issue was joined and the case tried.

The appellees answered the cross-complaint in one paragraph, in substance as follows: Johnson and Cannan became indebted to the appellees during the months of May, June, July, August and September, 1885, on account of merchandise sold and delivered, in the sum of $ 554, and that the said indebtedness is still due and owing from said firm; that at the time the said indebtedness was contracted, Cannan, one of the members of said firm, was indebted in his individual capacity to his co-appellant, Purple, in the sum mentioned in said mortgage, the said indebtedness having been contracted long before the formation of said partnership, and that the appellant Johnson was in no way liable for the payment of said debt; and that on the 9th day of September, 1885, the appellants Johnson and Cannan, without any other consideration except said debt of Cannan, executed and delivered the said note and chattel mortgage to their co-appellant, the said mortgage being given to secure the payment of said note, the goods mortgaged being the firm property of Johnson and Cannan, and the said firm at the time being insolvent; all of which was known to the said appellant Purple.

It is alleged that the mortgaged property was all of the property owned by the said firm, and that it was not of a value greater than the indebtedness it was given to secure; that the said members of said firm had no individual property subject to execution; all of which it is alleged was known to the said Purple.

The answer then recites the proceedings in attachment, and asserts that the execution of the writ of attachment gave to the appellees a superior lien on said property to the said mortgage lien.

The appellant Purple filed a demurrer to the said answer, which was overruled by the court and he reserved an exception; he then filed a reply, which is of some length, but in legal effect is but a mere denial.

The cause was afterwards submitted to a jury, and a special verdict returned at the request of the parties. The jury found that the appellants Johnson and Cannan were partners and had been for some time past, and, as such firm, were largely indebted to the appellees and others; and, being so indebted, they, on the 14th day of September, 1885, executed the note and mortgage sued on by the cross-complainant, and that the sole consideration for the note was the private indebtedness of the appellant Cannan; that the mortgage was duly recorded within ten days after its execution, and that there is now due on the note and mortgage $ 384.12; that the mortgaged property was the property of the said firm of Johnson and Cannan, except some book accounts, amounting to about $ 100, all of which was known to the appellant Purple when he took the said mortgage; that the said firm was insolvent at the time; that the mortgaged property was all of the property belonging to said firm, and that these facts were all well known to the said Purple when the mortgage was executed. It is found that the individual partners were, at the time of the transaction, insolvent; that on the 14th day of October, 1885, the appellees filed their complaint in this cause, and at the same time filed...