Thompson v. Johnson
| Citation | 57 N.W. 223,55 Minn. 515 |
| Decision Date | 18 December 1893 |
| Docket Number | 8439 |
| Parties | Swen L. Thompson v. Andrew P. Johnson et al |
| Court | Supreme Court of Minnesota (US) |
Argued December 5, 1893.
Appeal by defendants, Andrew P. Johnson, Aaron Abrahamson, James P Onstad, Andrew Nash, Jonas Olander, and Lewis Lilly, from an order of the District Court of Fillmore County, John Whytock J., made June 7, 1893, denying their motion for a new trial.
Edward A. Hostvet and Carl C. Hourn were partners in business. They had a creamery at Houston, another at Rushford and a creamery and feed-mill at Lanesboro. They also had two ice-houses and a dray business at Rushford. The creameries, feed-mill and icehouses stood on leased ground and were personal property. Hostvet died intestate January 9, 1888. Hourn continued the business as surviving partner. The firm was owing considerable and was in fact insolvent, but Hourn believed the partnership property worth more than the indebtedness. On December 6, 1889, he sold the dray property to Peder E Pederson for $ 500 in payment of the firm debt to him of that amount. On December 7, 1889, he sold the creamery and feed-mill at Lanesboro to Nelson Bros. for $ 1,000 in payment of the firm debt to them of that amount. On the same day he sold the creamery at Houston to the defendants above named for $ 2,100 in payment of the firm debts to defendants Andrew P. Johnson, Andrew Nash and Aaron Abrahamson of that amount. Johnson and the other defendants above named formed a partnership to purchase and carry on that business and they each paid to Johnson, Nash and Abrahamson their proportion of the purchase price. In December, 1889, Hourn mortgaged the creamery at Rushford to other creditors to secure payment of firm debts to them severally.
On January 17, 1890, Hourn made an assignment of his nonexempt property and of the partnership property to the plaintiff, Swen L. Thompson, in trust for creditors, under Laws 1881, ch. 148, as amended. The property which Hourn assigned was valued at $ 2,621.09. Debts were proved and allowed to the amount of $ 7,531. The assignee commenced suit against Pederson to recover the dray property, but was defeated and judgment was entered for defendant therein. He also brought this action March 29, 1890, against Hourn and the purchasers of the creamery at Houston, to recover that property, or its value, and for the use of it meantime, claiming that the sale to them was made with a view of giving his creditors, Johnson, Nash and Abrahamson a preference over his other creditors, and that the defendants, Onstad, Olander and Lilly knew of and aided in procuring such preference.
The issues were tried November 16, 1891, before Hon. John Q. Farmer, J. Defendants offered in evidence the judgment roll in the case against Pederson, but it was excluded and they excepted. The Judge made and filed findings on December 28, 1892, and directed judgment for plaintiff that he recover the property and $ 20 per month for the use of it from December 7, 1889, until restored, and in case the property has sustained waste or damage, such additional sum as will make the same good. In case it is not, or cannot be, returned that he recover of defendants $ 2,500, its value when they took it with interest from that time with costs. Judge Farmer's term of office expired and a motion was made before his successor by defendants for a new trial. The motion was denied and they appeal. The discussion here was mainly on the evidence, whether it justified the finding that the purchasers had reasonable ground to believe that Hourn was insolvent and purchased with intent to give a preference to Johnson, Nash and Abrahamson.
Order affirmed.
W. H. Harries, S. B. McIntire, G. W. Rockwell, and Wells & Hopp, for appellants.
H. S. Bassett, for respondent.
There can be little doubt that at the time of the alleged preference the concern of Hostvet & Hourn, conducted by Hourn as surviving partner, was, and for some time had been, a losing and failing concern, and had reached that stage when it did not and could not pay its debts as they matured in the usual course of business. Where such is the case, it is a matter of no consequence that in the opinion of the debtor or of any one else he is not insolvent. A witness' testimony that a debtor is solvent is of very little weight without knowing what he regards as insolvency. And the evidence would justify a finding that all the property the concern had, and all Hourn had, taken at its full value, was insufficient to pay its and his debts. The finding that he and the concern were insolvent was therefore justified by the evidence.
The finding as to insolvency, and the judgment in the case of this plaintiff against Pederson, were not only not res adjudicata, but they were not even evidence on the point, not being between the same parties.
There can be no doubt either that Hourn knew the pecuniary condition of himself and the concern, so that when he paid in part, at any rate, one creditor, by a transfer of property of the concern, knowing he could not pay all the debts as they matured, he knew he was giving a...
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