Strong v. Imig

• Decision Date: 26 September 1895
• Citation: 64 N.W. 295,91 Wis. 29
• Parties: STRONG ET AL. v. IMIG ET AL.
• Court: Wisconsin Supreme Court

91 Wis. 29

64 N.W. 295

STRONG ET AL.

v.IMIG ET AL.

Supreme Court of Wisconsin.

Sept. 26, 1895.

Appeal from circuit court, Sheboygan county; N. S. Gilson, Judge.

Action by George Strong and another against George Imig, defendant, and Henry Kalk and others, garnishees. From a judgment in favor of the garnishees, plaintiffs appeal. Reversed.

On the 6th day of October, 1892, the defendant, Jacob Imig, was indebted in severalty to the following 14 persons: Leopold Gutsch, Charles Imig, Julia Imig, Adam Imig, Louis Gutsch, Charles S. Weisse, Otto J. Gutsch, Hans Gutsch, Henry Imig, Louis Oxberger, John Balzer, Jr., Augusta Brechtel, Henry W. Kalk, and John Stockdyke, all being his relatives or personal friends. The sums due to such persons, respectively, amounted in the aggregate to $9,936. He had other creditors, including plaintiffs, and the amount of all his indebtedness largely exceeded the value of his entire property. He was in fact absolutely insolvent, and with the full knowledge of such insolvency on the part of the said 14 creditors, or of the person or persons who acted for them in the transaction, a chattel mortgage was made by him to such creditors to secure their several claims, covering all his property, consisting of a stock of boots and shoes and some book accounts. The mortgage contained all the usual provisions common to chattel mortgages, and provided as follows: “In case the mortgagees, or any of them, at any time deem the said property or the said debts, or either of them, insecure, they, or either of them, are hereby authorized to take possession of the mortgaged property, or any part thereof, and to sell the same, and to apply the proceeds as provided.” At the time of the giving of the mortgage it was agreed between the mortgagor and the mortgagees present, and those absent, through the person authorized or who assumed to act for them, that one of such mortgagees should take immediate possession of the property, for the benefit of all of them, and apply the same under the terms of the mortgage; the purpose being to pay the secured claims in full, if the proceeds should be sufficient for that purpose, otherwise pro rata, and, if there was more than enough, then that the other creditors should have the balance. Several of the mortgagees were neither present, nor had any knowledge of the transaction. Henry W. Kalk, one of the mortgagees, immediately after the execution of the mortgage, took possession of the property, pursuant to the provisions thereof and the contemporaneous verbal agreement referred to, and thereby became trustee for the creditors named therein. Soon after the making of the first mortgage, and on the same day, defendant Imig gave to Charles L. Zschetzsche, who was a creditor in the sum of $4,617, a second mortgage on the property, to secure the payment of such indebtedness. Zschetzsche took the security with full knowledge of his debtor's insolvency and of the facts in regard to the first mortgage, and constituted Kalk his agent to handle the property in trust for him, subject to such first mortgage. Soon after the making of the second mortgage, and on the next day, defendant Imig gave a third mortgage to Niles T. Stickney, who was also a creditor. Stickney received his security with full knowledge of his debtor's insolvency and of the facts in regard to the prior mortgages, and immediately constituted Kalk his agent to hold and administer the property in trust for him, subject to the rights of such prior mortgages. Appellants were creditors to the amount of $1,323.25. They sued to recover the same, and garnished all the mortgagees. Judgment was rendered in their favor against the principal defendant for $1,452.76, and in favor of the garnishees for costs. From the judgment in the garnishment proceedings this appeal was taken.G. G. Sedgwick and J. S. Anderson, for appellants.

D. T. Phalen, A. C. Prescott, Felix Benfey, and Simon Gillen, for respondents.

MARSHALL, J. (after stating the facts).

A careful study of this case fails to disclose any reversible error, unless the court erred in failing to find that the mortgages given by the defendant, Imig, together with the verbal agreement made between the parties at the time, in connection with circumstances then existing, constitute an assignment for the benefit of creditors, within the authority of Winner v. Hoyt, 66 Wis. 227, 28 N. W. 380;Maxwell v. Simonton, 81 Wis. 635, 51 N. W. 869;Fuller & Fuller Co. v. McHenry, 83 Wis. 573, 53 N. W. 896; and Northern Nat. Bank v. Weed, 86 Wis. 212, 56 N. W. 634. The statement of facts preceding this opinion presents a case where an insolvent debtor, wishing to prefer 14 of his creditors, who were relatives and friends, gave them a chattel mortgage covering all his property, coupled with an agreement, made at the time, that...