State v. Union Nat. Bank of Muncie
Decision Date | 17 July 1896 |
Citation | 145 Ind. 537,44 N.E. 585 |
Parties | STATE v. UNION NAT. BANK OF MUNCIE et al. |
Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from circuit court, Delaware county; George H. Koons, Judge.
Suit by the Union National Bank of Muncie against Alexander G. Patton for the appointment of a receiver. The state of Indiana, on leave given, intervened in the proceedings, and filed its petition to set aside the order appointing the receiver, and to dismiss the proceedings. The motion and petition were denied, and intervener appeals. Reversed.
Wm. A. Ketcham, Atty. Gen., Smith & Korbly, and Ward H. Watson, for the State. Ryan & Thompson, for appellees.
In May, 1896, and for a long time previous thereto, the appellee Alexander G. Patton was a resident of Columbus, in the state of Ohio, and was engaged in the business of manufacturing under the name and style of the Alexander G. Patton Manufacturing Company. He had one factory at Columbus, Ohio; one at Muncie, Ind.; and one within the Indiana Prison South, at Jeffersonville. Prior to Saturday, May 16, 1896, the state of Indiana had a suit pending in the Floyd circuit court against said appellee, and on said day there was a finding by said court in favor of the state in the sum of $28,242.62. Judgment was entered on this finding on May 19, and execution thereon issued on May 20, which execution came into the hands of the sheriff of Delaware county on May 21, 1896. On Sunday, May 17, 1896, the appellee Patton, at Columbus, Ohio, learned of the finding against him in the Floyd circuit court, and also that judgment had not yet been rendered upon the finding. Early Monday morning, chattel mortgages on the property at Muncie and Jeffersonville were prepared and executed by Patton. Those upon the Muncie property were at once sent on to that city by Wilden E. Joseph and L. L. Rankin, bookkeeper and attorney, respectively, for Patton, while Patton himself went to Jeffersonville. The Union National Bank of Muncie, one of the appellees, held four promissory notes against Patton, and it was to secure this indebtedness that one of the chattel mortgages was intended. On the advice of counsel, renewal notes were made out for three of the old notes, and the time extended. The remaining note was already sufficiently secured, and the bank preferred not to include that in the new notes to be secured by the mortgage. The bank had not expected to receive any mortgage as security for its indebtedness, but, after learning the situation, accepted the mortgage, and then believed its debt secure. Afterwards the cashier of the bank was called up, and informed that it was thought better that a receiver should be appointed for the Patton property, and that the bank should make the application. Thereupon Ryan & Thompson, attorneys, who had acted in relation to the matter of the renewal notes and chattel mortgage, were directed by the bank to go ahead and procure the appointment of a receiver for Alexander G. Patton. The complaint for a receivership was then, on said 18th day of May, 1896, prepared and filed by said attorneys, the material parts of said complaint being as follows:
“State of Indiana, County of Delaware-ss.: Union National Bank of Muncie v. Alexander G. Patton. The plaintiff complains of the defendant, doing business under the name and style of Alexander G. Patton Manufacturing Company, and says said defendant on the 18th day of May, 1896, by the name of Alexander G. Patton, executed and delivered to said plaintiff his certain chattel mortgage on the following personal property, situate and located in Delaware county, Indiana, to wit [describing the property], to secure the payment of three notes of the date of May 18, 1896, executed by said defendant by the name of Alexander G. Patton, and payable to the order of the Union National Bank of Muncie, Indiana, plaintiff, one of which said notes is for the sum of $214, due June 17, 1896, with 8 per cent. interest from date; one for $1,410.48, due July 17, 1896, with interest at 8 per cent. from maturity; and one for $1,513, due October 18, 1896, with 8 per cent. interest after maturity; all providing for the payment of attorney's fees, and payable without any relief from valuation and appraisement laws,-a copy of which is filed herewith, marked ‘B,’ and made a part hereof. And which said notes are renewals and similar notes for similar and the same amounts. Plaintiff avers that said indebtedness is for loans of money from said plaintiff, borrowed for and used in the operation of the business of said company. The plaintiff avers that, in the taking of said mortgage security aforesaid, plaintiff learned that there already existed a mortgage in full, which by its terms covered some parts and portions of the above mortgaged property, and that the property herein described as covered by the mortgage is inadequate to, and wholly insufficient to, secure the payment of said plaintiff's debts; that on this day, for the first time, plaintiff has learned said defendant is in imminent danger of insolvency, and plaintiff believes, from information secured by it this day, said defendant is insolvent and unable to pay his indebtedness. The plaintiff is informed that the defendant is indebted in the sum of fifty or sixty thousand dollars, to a large number of creditors, in various amounts, and is on the verge of being sued in numerous cases for parts of said sum, and writs will be levied, and much of said property will be wasted and dissipated. And plaintiff avers that it has just learned that the state of Indiana has recovered a judgment of some $28,000 in the Floyd circuit court against said defendant, and an execution may be expected to come into the hands of the sheriff of Delaware county, whereby all the property of said defendant not already covered by liens will be taken, and other creditors will be deprived of any funds from which any parts of their debts can be collected; that plaintiff is informed that said defendant has other personal property than such as is included in said mortgage, which plaintiff could secure by the aid of the power of this court, by the appointment of a receiver herein. The plaintiff is informed that a receiver either has been or will be appointed in the state of Ohio, in suits pending against said defendant, to take possession of such property of defendant as may be found in said state. And the plaintiff avers that, if the property covered by said mortgage should be taken by said execution from the said Floyd circuit court, it will result in great damage and detriment to the security of plaintiff's claim, and is in danger of being removed and materially injured. Wherefore plaintiff prays the court for the appointment of a receiver or receivers to take charge of the property of defendant, and of the property covered by and included in said mortgage; to hold and protect the said mortgaged property for plaintiff, and to sell and otherwise dispose of all the property of the defendant for the benefit of his said defendant's creditors and this plaintiff; and to do and perform all the duties incident to such receivership. Ryan & Thompson, Attorneys for Plaintiff.
Wilden E. Joseph, being first duly sworn, upon his oath, says that he makes this affidavit for and in behalf of the plaintiff, and upon his said oath he further says that the matters and things in the above and foregoing complaint are true and correct. Wilden E. Joseph.
Subscribed and sworn to before me this 18th day of May, 1896. John E. Reed, Clerk.”
Ryan & Thompson prepared an answer to this complaint, which was signed by the said L. L. Rankin, and is as follows:
Mr. Ryan, of the firm of Ryan & Thompson, filed this answer with the complaint in the Delaware circuit court; and thereupon, on said 18th day of May, 1896, the court ...
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