Sabin v. Columbia River Lumber & Fuel Co.
| Decision Date | 13 November 1893 |
| Citation | 34 P. 692,25 Or. 15 |
| Parties | SABIN v. COLUMBIA RIVER LUMBER & FUEL CO. et al. |
| Court | Oregon Supreme Court |
Appeal from circuit court, Multnomah county; L.B. Stearns, Judge.
Suit by R.L. Sabin against the Columbia River Lumber & Fuel Company and others. Decree for defendants. Plaintiff appeals. Affirmed.
L.B. Cox, for appellant.
Geo. H. Durham, for respondent national bank.
E.B Watson, for other respondents.
This suit was brought by the plaintiff in behalf of himself and other unsecured creditors who might join with him against the Columbia River Lumber & Fuel Company, a corporation, the Commercial National Bank, James F. Watson trustee, Borthwick & Fraine, partners, H.B. Borthwick, C.W Knowles, and D.J. Moore, to set aside certain real and chattel mortgages given by the Columbia River Lumber & Fuel Company to Watson, as trustee, to secure the sum of $50,000 due the Commercial National Bank, and also to set aside an assignment by the company direct to the bank of all its accounts and bills receivable as further security therefor on the ground that the mortgages and assignment are void as to the creditors of the fuel company. On the 28th and 29th of November, 1892, the Columbia River Lumber & Fuel Company, defendant, being indebted to its codefendant the Commercial National Bank in the sum of $50,000 upon certain overdue promissory notes, drafts, and overdrafts, upon three of which notes, amounting in the aggregate to about $35,000, the defendants Borthwick, Knowles, and Moore, directors of the company, were indorsers, executed to the defendant Watson, as trustee for the bank, real and chattel mortgages upon all its property, and also assigned to the bank direct all its accounts and bills receivable to secure the payment of said indebtedness. The mortgages were immediately recorded and filed in the proper county, and the trustee took possession of the property described in the chattel mortgages, and continued to hold the same until the appointment of a receiver in this suit. At the time of the execution of the mortgages and assignment the lumber company was indebted in the sum of about $30,000 to divers and sundry persons, including the assignors of the plaintiff, in addition to the amount due the bank, and had property, consisting of a sawmill plant, real estate, lumber, wood, ledger accounts, and bills receivable, of the estimated value, in the aggregate, of about $100,000. The plaintiff, who is a judgment creditor of the lumber company, claims that the mortgages are void as to creditors, for the reasons (1) that they are fraudulent, both in law and fact, as being made to hinder, delay, and defraud creditors; (2) that the company was insolvent at the time the mortgages were executed, and therefore could not create a preference in favor of one creditor; and (3) that, even if an insolvent corporation can create a preference, the mortgages are void so far as they are security for notes upon which the directors of the company are indorsers. The real-estate mortgage, after describing the promissory notes, drafts, and overdrafts intended to be secured thereby, contains this stipulation: The chattel mortgages contain the same provisions as to future advances and overdrafts as the real-estate mortgage, and provide that, ...
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Sabin v. Columbia River Lumber & Fuel Co.
...15 SABIN v. COLUMBIA RIVER LUMBER & FUEL CO. et al. Supreme Court of OregonFebruary 14, 1894 On rehearing. Denied. For prior report, see 34 P. 692. BEAN, The opinion in this case is challenged by a petition for rehearing because it is held therein that, if the mortgages were taken by the mo......