Redhead v. Pratt

• Decision Date: 21 June 1887
• Citation: 72 Iowa 99,33 N.W. 382
• Parties: REDHEAD AND OTHERS v. PRATT AND OTHERS.
• Court: Iowa Supreme Court

72 Iowa 99

33 N.W. 382

REDHEAD AND OTHERS

v.PRATT AND OTHERS.

Supreme Court of Iowa.

June 21, 1887.

Appeal from circuit court, Buena Vista county.

This is an action in equity, and involves the question as to the validity of the sale of stock of drugs made by the defendants Pratt & Barney, to the defendants Rae & Hunter. There was a decree finding that the sale was void for fraud as to the plaintiffs, who are creditors of Pratt & Barney.F. H. Helsel, for appellants.

Robinson & Milchrist and N. B. Raymond, for appellees.

ROTHROCK, J.

Pratt & Barney were for some time in the drug business at Sioux Rapids. On the ninth day of July, 1885, they executed a chattel mortgage upon their stock of merchandise to the Storm Lake Bank to secure the payment of $327. On the tenth day of July, 1885, they executed a chattel mortgage upon their stock to D. D. Brown & Son to secure the payment of $190, and another chattel mortgage upon the same property to Sarah Scott to secure the payment of $125; and on the same day they sold their entire stock to Rae & Hunter for the sum of $600, subject to the said mortgages. Within a few days thereafter, the plaintiffs, who are creditors of Pratt & Barney, commenced actions at law against the said firm upon their claims, and garnished the mortgagees and Rae & Hunter, the purchasers of the goods. The garnishees answered, denying that they had in their possession any property of Pratt & Barney, or that they were in any manner indebted to them. Thereupon the plaintiffs filed their petition, making all of said parties defendants, in which they alleged that the said mortgages and the sale were all one transaction, and together constituted a general assignment for the benefit of creditors with preferences, and were therefore void. They also averred that the sale of the stock of goods to Rae & Hunter was made with intent to hinder, delay, and defraud creditors. Issue was taken upon the petitions, and by agreement the causes were tried as in equity, and as one action, and the court decreed that the mortgages were valid, but that the sale was fraudulent and void as to the plaintiffs. It appears from the evidence that, at the time of the sale of the goods, Pratt & Barney were indebted to Rae & Hunter in the sum of $120, and that Rae & Hunter were sureties for them to the Sioux Rapids Bank in the sum of $125. By the purchase of the goods the debt was satisfied, and Rae & Hunter assumed the payment of the $125 for which they were surety, and they assumed the payment of these mortgages upon the stock, and paid to Pratt & Barney $600 in cash. The whole consideration paid for the stock was about $1,492.

It is claimed by counsel for appellant that the record does not show that the plaintiffs at any time recovered judgments against Pratt & Barney upon their claims. We think the showing made upon that question was sufficient. The plaintiffs aver in their petitions that they had recovered judgments; and this is not denied in the answers, and must be regarded as admitted; and the amounts due the plaintiffs at the time of the trial was by stipulation agreed upon at the trial. It is further claimed that the decree of the court below is inconsistent because it finds that the sale was valid, to the extent of the claims of Rae & Hunter against Pratt & Barney, and void for fraud as to the plaintiffs. This question is not involved in the case. The proof shows, without conflict, that the goods were sufficient in value to pay the mortgages, and to pay all the claims of the plaintiffs and the claim of...