Rothell v. Grimes
| Decision Date | 30 November 1887 |
| Citation | 22 Neb. 526,35 N.W. 392 |
| Parties | ROTHELL AND OTHERS v. GRIMES. |
| Court | Nebraska Supreme Court |
The insolvency of a mortgagor, although a circumstance which may be taken, together with other material facts, to show a fraudulent design in disposing of property, is not of itself sufficient to establish it.
A creditor may obtain from a failing debtor payment of his claim, provided he acts in good faith, and receives no more than sufficient to satisfy the debt. 1
Where a firm is insolvent, the partnership property will be applied to the partnership debts, and a creditor of a member of the firm cannot be paid out of the partnership property, to the exclusion of creditors of the firm.
A mortgage of partnership goods, given to secure the sureties on a bond of a member of the firm for the faithful performance of his duties as guardian, is not available as against creditors of an insolvent firm.
Error from district court, Johnson county; BROADY, Judge.S. P. Davidson, for plaintiffs.
D. F. Osgood and J. Reavis, for defendant.
In March, 1887, the plaintiffs commenced an action in replevin in the district court of Johnson county, to recover possession of certain goods and chattels of the value of $400. It is alleged in their petition that, under and by virtue of a chattel mortgage made and delivered to plaintiffs on the eleventh day of March, 1887, by E. M. McGee and William S. Kearney and McGee & Kearney, a partnership, to secure a note of $2,000, plaintiffs hold a special ownership in, and are entitled to the possession of, the goods in controversy, (particularly describing them;) that on and before March 16, 1887, they were in the lawful possession of said property under said chattel mortgage, and were proceeding to sell said property and apply the proceeds thereof in satisfaction of said debt secured thereby, in as expeditious, safe, and judicious manner as possible, in pursuance of said mortgage; that while plaintiffs were thus in possession thereof, on said sixteenth day of March, 1887, said goods and chattels were forcibly and wrongfully taken from the possession of the plaintiffs by defendant in the night-time; that by reason of the said wrongful taking of said property, and by reason of the negligent and careless handling of the same by defendant, the same have been damaged to the amount of $200; that when so taken by defendant said goods and chattelswere worth $400, and they filled out and completed the assortment of the stock then being sold under said chattel mortgage by plaintiffs, and, by reason of these goods in controversy being so taken, said assortment was broken up and destroyed, and plaintiffs were damaged thereby in the further sum of $200; that at the time said McGee & Kearney made and delivered said chattel mortgage they were the owners of all said goods and chattels and said stock of goods, and had a right to sell or dispose of them by mortgage, and at the same time they delivered possession of said goods and chattels to plaintiffs; that all of said property so mortgaged and delivered to plaintiffs, including the goods in controversy, is not sufficient to pay the said debt secured by said mortgage; that defendant now still wrongfully detains said goods and chattels so taken, and has so wrongfully detained same for more than six hours, to the further damage of plaintiffs of $100, making the plaintiff's damages by reason of the premises aggregate the sum of $500.
The defendant in his answer denies, first, all the allegations of plaintiff's petition. He alleges that he is sheriff of said county, and as such, on March 16, 1887, he levied on the goods in controversy, under an order of attachment duly issued against E. M. McGee and W. S. Kearney as their property, and that he had no notice of any interest or lien by virtue of a chattel mortgage or otherwise, of plaintiffs upon said property; that at the time plaintiffs took possession of the goods in controversy, by virtue of a pretended chattel mortgage, E. M. McGee and W. S. Kearney, who gave said pretended chattel mortgage, were indebted in large amounts for goods purchased, and on which said mortgage was given, of which fact plaintiffs were knowing, and said mortgage was given and taken with the intent to defraud, hinder, and delay said creditors; that there is no description in said plaintiff's mortgage of the property sought to be recovered, and therefore plaintiffs are not entitled to recover in this action; that said pretended mortgage was given...
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