Stein v. Munch

• Decision Date: 08 March 1878
• Citation: 24 Minn. 390
• Parties: JOHN GEORGE STEIN and another <I>vs.</I> GUSTAV MUNCH, impleaded, etc.
• Court: Minnesota Supreme Court

24 Minn. 390

JOHN GEORGE STEIN and anothervs.

GUSTAV MUNCH, impleaded, etc.

Supreme Court of Minnesota.

March 8, 1878.

This action was brought upon certain promissory notes, originally secured by a chattel mortgage upon a stock of drugs, and indorsed by the defendant Munch. At the time of the delivery of the notes and mortgage, and with the knowledge of the said Munch, it was stipulated between the mortgagor and mortgagee that the former should keep and retain possession of the mortgaged property, and should continue and carry on the retail drug business with the said stock of drugs, and should sell and dispose of the same in the usual course of business as his own. The said mortgagor under this stipulation accordingly retained possession of the mortgaged property, and continued and carried on the said retail drug business in his own name, and sold and disposed of said stock of goods, in the usual course of business, as his own, and with the knowledge and consent of the plaintiffs, until February 5, 1875. On said date the plaintiffs took possession, under the mortgage, of all that portion of the mortgaged property which had not then been sold and disposed of by the mortgagor, and on the day following the sheriff of Ramsey county levied upon, and took into his possession, all of the aforesaid property remaining unsold, under several writs of attachment.

On April 1, 1875, said property was sold under sundry executions duly levied by the said sheriff; and on July 23, 1875, the plaintiffs released all their right, title and interest in the said mortgaged property to the assignee of the purchaser of said property at the aforesaid execution sale.

The action was tried in the district court for Ramsey county, by Simons, J., without a jury, who, after finding the facts to be substantially as above stated, further found that the effect of said mortgage was to hinder, delay and defraud the creditors of said mortgagor, and that the same was wholly and entirely null and void as to the creditors of the mortgagor by whom the mortgaged property was attached, and in satisfaction of whose claims the same was sold by the sheriff; that the mortgage being null and void as to said creditors, the release thereof by plaintiffs in no manner affected the liability of the defendant Munch upon the notes in suit; and that plaintiffs were therefore entitled to judgment against the said Munch and the said mortgagor. Judgment was therefore entered for the plaintiffs in...