Security State Bank of Enid v. Reger
| Decision Date | 28 September 1915 |
| Docket Number | 5134. |
| Citation | 151 P. 1170,51 Okla. 397,1915 OK 688 |
| Parties | SECURITY STATE BANK OF ENID ET AL. v. REGER. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
A general creditor cannot maintain an action against a third party who fraudulently conspires with a debtor to accept a mortgage on the debtor's personal property and foreclose the same in order to hinder and delay such creditor in the collection of his debt; such damage being too remote indefinite, and contingent to be the basis of an action.
Commissioners' Opinion, Division No. 3, Error from District Court, Garfield County; James B. Cullison, Judge.
Action by Pat McInteer against the Security State Bank of Enid, a corporation, and others. Judgment for plaintiff, and defendants bring error. Reversed and remanded.
Hills & Manatt, of Enid, for plaintiffs in error.
This action was instituted by Pat McInteer. Subsequent to the filing of the appeal in this court he died, and the cause was revived in the name of J. M. Reger, as administrator of his estate. In the year 1910 plaintiff was the owner of certain lands in Garfield county, which he rented to E. C. Meyers. During the year he made certain advancements for the purpose of purchasing secd to plant the land in broom corn and for other purposes, amounting to approximately $700. After the broom corn was baled and ready for market, the Security State Bank of Enid took a mortgage on the same to secure two notes one for $90, and the other for $200. It is alleged that the officers and agents of the bank entered into a fraudulent and corrupt conspiracy and agreement to defraud Pat McInteer and the other general creditors of E. C. Meyers, whereby it was understood and agreed the notes should be executed and the same secured by a chattel mortgage on the broom corn; that at the time of said fraudulent agreement the said E. C. Myers was only indebted to the bank in the sum of $90; that the mortgage was foreclosed and the broom corn sold, the bank retaining the sum of $90 and paying the balance to E. C Meyers; that at said time the officers and agents of the bank knew that Meyers was heavily indebted to the plaintiff and that he was expecting to receive the proceeds from the broom corn to pay for the advancement so made; that the officers and agents of said bank, pursuant to said fraudulent agreement entered into between E. C. Meyers and themselves, took said mortgage for the purpose of covering up the entire value of said broom corn, and for the purpose of hindering and delaying the creditors of said E. C. Meyers in the collection of their debts, and by reason thereof plaintiff was prevented from bringing suit and causing an attachment to be levied on said broom corn, and, had it not been for said chattel mortgage, plaintiff would have brought said attachment. The petition was challenged on the ground that it did not state facts sufficient to constitute a cause of action, which was overruled, and the question brought here for review.
It is a well-established principle of law that an action will not lie for fraudulently aiding and assisting a debtor to dispose of his property to prevent a general creditor from attaching it. This is true, for the obvious reason that such fraudulent act only prevents the general creditor from executing his intention to attach and deprives him of no property rights, he not having a lien upon the property. This proposition is supported by the great weight of authority, the leading case being that of Lamb v. Stone, 11 Pick. (Mass.) 527, wherein it was held:
"An action on the case for the fraud of the defendant in purchasing personal property of the plaintiff's debtor and aiding the debtor to abscond, in order to prevent the plaintiff from enforcing payment of his debt by attaching the property or arresting the body of the debtor, cannot be sustained."
Another of the leading cases which has been relied upon...
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