Ross v. Duggan

• Decision Date: 01 December 1879
• Citation: 5 Colo. 85
• Parties: ROSS v. DUGGAN ET AL.
• Court: Colorado Supreme Court

5 Colo. 85

ROSS v. DUGGAN ET AL.

Supreme Court of Colorado

December, 1879

Appeal from District Court of Arapahoe County.

THE appellant, Ellen Ross, filed her bill of complaint in the District Court of Araphahoe County, substantially as follows That about the 19th of March, 1866, James Duggan was indebted to J. Bright Smith, in the sum of $1,000; whether the indebtedness was evidenced by note was unknown. That on said day Duggan conveyed to Smith certain real estate described to secure said indebtedness, and future advances; that the deed was in fee, but intended and received as a mortgage. Complainant was not informed when the indebtedness to Smith was due, but averred on belief that it was not to exceed three years from said day. Said deed was duly recorded; that it contains a clerical error in the use of the word 'corner' for the word 'quarter' in describing said real estate; that about 20th April, 1870 Duggen and Smith had a settlement of their accounts, at which it was found Duggan was indebted to Smith in the sum of $2,791.98; said indebtedness so due from Duggan to Smith was for a valuable consideration conveyed to the complainant, and that the property thus conveyed to secure the same, was also conveyed; that Duggan executed his promissory note to the complainant in said sum on said day; that on said day Smith with the knowledge and consent of Duggan, conveyed said property to the complainant, complainant receiving the same as security for Duggan's note; that on 31st October, 1870, said note and interest being unpaid, Duggan then being indebted to complainant $3,116.25, executed and delivered to complainant his promissory note that day for said sum, payable to complainant one year thereafter; that complainant retained said real estate as security for said note; that on 31st May, 1873, complainant recovered judgment on said note in said district court against said Duggan for $5,278.60; that on 20th May, 1874, execution was issued thereon; 20th August, 1874, execution returned nulla bona. Said judgment nor interest has been paid to the complainant by Duggan. Duggan has no other real estate than that described and conveyed to the complainant; has no adequate remedy at law, and is remediless except in equity. That the fee of said property is in complainant, redeemable nevertheless in equity by Duggan on payment of judgment and interest; that Duggan refused to pay said note and interest prior to obtaining said judgment; that certain other parties, naming them, have or claim some interest in the property, the nature of which is unknown to complainant, but whatsoever it is, it occurred subsequent to complainant's lien. Names parties defendant and prays they be summoned. Prays that an account may be taken of what is due complainant upon said judgment; that defendants be ordered to pay the amount found to be due upon such account within a short time, and that in default thereof the said mortgaged premises be sold under decree of the court, and proceeds applied in satisfaction of said debt, costs and charges, and defendants, or persons claiming by, through or under defendants subsequent to the commencement of this suit, be forever barred and foreclosed, etc. In case money arising from sale of said premises be insufficient to pay the amount due, the balance due complainant shall be made by levying on any other property or estate of the said Duggan.

A decree pro confesso, was entered against James Duggan Edward Seiber, P. P. Wilcox, Elias Brown, Peter Magnes, and other defendants.

Mary A. Duggan and John Dee, defendants, answered substantially as follows: Defendants not advised that on 19th of March, 1866, Duggan was indebted to Smith in any sum. Admit that at the time specified Duggan was seized in fee simple of said lands as alleged; that at said time, 19th March, 1866, Duggan was largely indebted to one Martin and other creditors, the same being due, and said creditors were pressing said Duggan for payment. Admit that on said day Duggan executed and delivered to said Smith an absolute deed for said premises, but whether or not the same was intended as mortgage to secure the existing debt, and further advances that might be made thereon, defendants not advised and cannot admit or deny, but allege that said deed was made to delay, hinder and defraud the said Martin and other creditors of the said Duggan in the collection of their just debts. Cannot state when Duggan's indebtedness to the same accrued if any such indebtedness existed. Admit that said deed from Duggan to Smith was recorded as alleged. Cannot admit or deny that Smith and Duggan had a settlement on 20th April, 1870. Allege that on 8th of October, 1868, Duggan made his promissory note to Smith for $2,000, which said note defendants charge was in full of all indebtedness from Duggan to Smith. At the same time to secure said note, Duggan made and delivered to Smith a chattel mortgage upon a large amount of personal property, describing the same. Allege the value of said property $3,000; that note and mortgage were accepted by Smith as a full payment of said supposed indebtedness from Duggan to Smith. Said mortgage duly recorded, etc. That on 17th September, 1868, Martin for himself and for his firm, brought suits against Duggan in said district court, and at the October term, same year, Martin recovered judgment against Duggan for $231 and costs, and Martin & Co. at the same time recovered judgment against Duggan for $1,365 and costs. Martin afterwards caused execution to be issued thereon to the sheriff in the usual form. The sheriff by virtue thereof sold said described lands to Samuel E. Browne. Afterwards, on the 4th day of November, 1869, sheriff's deed given to said Browne for all of the said lands. Allege that by virtue thereof Browne became the owner in fee of said property; of all of which said Smith had notice; that at said time Smith had and held said chattel mortgage upon said personal property of said Duggan, and that said property then remained and was in the possession of the said Duggan, and was more than sufficient to have paid said debt from Duggan to Smith; that Smith neglected to take any proceedings to collect said debt, and that by such neglect the same, i. e., the personal property, became and was wholly lost; that said personal property was left in the hands and possession of said Duggan by said Smith, until after the lien of said chattel mortgage expired, and that now the same has passed out of the hands and possession of Duggan, and Duggan is insolvent and unable to pay the debt; that the complainant is the assignee of Smith, and that she took the same with full notice of all the premises, and is not therefore entitled to have said pretended mortgage enforced in equity against the defendants, who are the assignees of said Browne for a valuable consideration. Cannot admit or deny that on 20th April, 1870, said Smith and said Duggan had a settlement of the accounts between them, and that Duggan fell indebted to Smith $2,791.98.

Defendants allege that at that time neither Duggan nor Smith could do anything to affect the rights of said Browne in and to said premises, nor the defendants' vendors; that at the time Browne became the owner of said land, said Smith held said chattel mortgage against said personal estate of Duggan; that said mortgage covered and was a valid lien upon said personal property of Duggan, and that the same was sufficient in value to pay Duggan's debt to Smith. Allege that Smith, by neglecting to collect his debt from Duggan out of said personal property, thereby lost all lien which he then had upon said lands, and that defendants now are, by virtue of said purchase, the owners of said lands and premises, and ought not in equity to be compelled to pay said debt from Duggan to Smith. Denies that the debt of Duggan to Smith was transferred to complainant with consent of Duggan. Admit that on 20th April, 1870, Smith conveyed to complainant by absolute deed said lands; deny that Smith had any right or authority of law to make such conveyance, and that the same was not made with the consent of Duggan. Cannot admit or deny that at that time Duggan made to complainant his promissory note. Deny that at the time stated Smith had any right or interest in said lands which he could convey to complainant. Allege at the time of deed from Smith to complainant, Duggan had no power or authority to make any bargain or agreement to bind said land; that at said time, viz: 19th April, 1870, the whole of Duggan's interest in said lands had been sold as aforesaid, and was then vested in said Browne, and that said Duggan or Smith had no right to make the conveyance to complainant. Allege that on 7th February, 1872, Mary A Duggan, one of the defendants, bought all the rights, title and interest in said realty in Browne of him for $2,000, and on the same day said Mary A. made and delivered to James O'Neal a mortgage to secure the payment of a note of that date for $2,100 and interest; that after default had been made by said Mary A. in the payment of said note, a bill in chancery was filed to foreclose said mortgage; that afterwards, by virtue of a decree of the court, said realty was sold by a master in pursuance of said decree of foreclosure to John Dee, for the sum of $3,000; that the sale was confirmed by the court, and after the time allowed for redemption the Master made a deed thereof to said Dee, conveying all the right, title and interest of the said Mary A. in and to said realty. Allege that on 31st October, 1870, James Duggan made his note to the complainant for $3,117.27; that at said time said Duggan made chattel mortgage to the said Ross on certain personal property, describing it, of the value of $3,500; mortgage being made to...