Rownd v. State

• Decision Date: 18 November 1898
• Docket Number: 18,643
• Citation: 51 N.E. 914,152 Ind. 39
• Parties: Rownd et al. v. The State et al
• Court: Indiana Supreme Court

51 N.E. 914

152 Ind. 39

Rownd et al. v. The State et al

No. 18,643

Supreme Court of Indiana

November 18, 1898

Rehearing Denied Dec. 30, 1898, Reported at: 152 Ind. 39 at 45.

From the Clark Circuit Court.

Affirmed.

Rankin & Rector, T. E. Powell, C. L. Jewett and H. E. Jewett for appellants.

W. A Ketcham, Attorney-General, for State.

OPINION

Monks, J.

This action was brought by the appellee, the State of Indiana, against appellants. Appellants Rownd and Gray alone assign errors. Those not waived are as follows: (1) That the complaint does not state facts sufficient to constitute a cause of action. (2) The court erred in overruling the demurrer of the appellants Robert M. Rownd and David S. Gray to the second paragraph of the answer of the appellee, the State of Indiana, to the cross-complaint of said appellants Rownd and Gray. (3) The court erred in overruling the demurrer of the appellants Robert M. Rownd and David S. Gray to the third paragraph of the answer of the appellee, the State of Indiana, to the cross-complaint of the appellants Rownd and Gray. (4) The court erred in overruling the joint and several motions of Rownd and Gray for a new trial.

It is first insisted that the complaint stated no cause of action against Rownd and Gray. The State of Indiana recovered a judgment in the court below against one Patton who owned manufacturing plants in Clark and Delaware counties in this State, and caused executions to be issued on said judgment to said counties and levied upon said plants. Said property appeared to be encumbered by liens held by different persons, and the State commenced this action for the appointment of a receiver, to set aside certain chattel mortgages upon a part of said property levied upon, (one of which was held by the appellants, Rownd and Gray), on the grounds that they were executed to hinder, delay, and defraud the creditors of said Patton, and to sell said encumbered property and marshal the assets of said Patton and distribute the same to the persons holding liens thereon according to their priority.

The only objection urged against the complaint by Rownd and Gray is, that the allegations of fraud are not sufficient to avoid the mortgage executed to them by said Patton, and that therefore the complaint did not state facts sufficient to constitute a cause of action against them. The complaint was sufficient as to said appellants, even if all the allegations of fraudulent intent and purpose, in the execution and acceptance of said mortgage, had been omitted therefrom. It is well established that courts of equity have jurisdiction to marshal the assets and securities of a debtor. The general principle is that if one party has a lien on or an interest in two or more funds as security for a debt, and another party has a lien on or interest in one only of those funds for another debt, and others have liens, some on all of said funds, and some only on a part thereof, as in this case, that a bill to marshal the assets will lie. I Story Eq. Jur., Chapter 13; Pom. Eq. Jur., section 112, section 410, section 186, and section 1414; Ostrander v. Weber, 114 N.Y. 95, 21 N.E. 112; Reilly v. Mayer, 12 N.J. Eq. 55; Van Mater v. Ely and Holmes, 12 N.J. Eq. 271.

It is next insisted that the court erred in overruling the demurrer of Rownd and Gray to the second and third paragraphs of the answer of the State of Indiana to the cross-complaint of said Rownd and Gray. Rownd and Gray each filed a separate cross-complaint, upon notes executed by said Patton to them, and the chattel mortgage executed to secure said notes, on certain property upon which the execution, issued on the judgment in favor of the State, had been levied. It was alleged that said chattel mortgage was a first lien on the property described therein and asked for an order that the proceeds of such property be first applied by the receiver to the payment of the claims of said appellants. The State of Indiana filed an answer in four paragraphs to said cross-complaints of Rownd and Gray. Appellants Rownd and Gray filed a demurrer to the second and third paragraphs of said answer in the following form: "The defendants, Robert M. Rownd and David S. Gray, demur to the second and third paragraphs of the answer to the cross-complaint of said defendants Rownd and Gray, and for cause of demurrer say neither of said paragraphs of answer state facts sufficient to constitute a good defense to either of said cross-complaints." This demurrer was joint and not several. Cooper v. Hayes, 96 Ind. 386, and cases cited; Stone, Adm., v. State, ex rel., 75 Ind. 235, 236; Silvers v. Junction R. Co., 43 Ind. 435; Stanford v. Davis, 54 Ind. 45.

It follows that if either said second or third paragraph of said answer was good, the demurrer was properly overruled. The second paragraph of answer was a plea of payment, and said appellants do not claim that said paragraph was not good, but assail the third paragraph of answer only. As said second paragraph of answer was sufficient, the court did not err in overruling the demurrer, even if the third paragraph was not good. City of Plymouth v. Milner, 117 Ind. 324, 325, 20 N.E. 235; Durham v. Hiatt, 127 Ind. 514 at 514-519, 26 N.E. 401.

It is contended by appellants Rownd and Gray that...