Van Patten v. Thompson

• Decision Date: 24 October 1887
• Citation: 34 N.W. 763,73 Iowa 103
• Parties: VAN PATTEN & MARKS v. THOMPSON ET AL
• Court: Iowa Supreme Court

34 N.W. 763

73 Iowa 103

VAN PATTEN & MARKS v. THOMPSON ET AL

Supreme Court of Iowa, Des Moines

October 24, 1887

Appeal from Scott Circuit Court.

THIS action was brought to set aside certain chattel mortgages. The court dismissed the plaintiffs' petition, and they appeal.

AFFIRMED.

Stewart & White, for appellants.

Cook & Dodge and Geo. E. Hubbell, for appellees.

OPINION

ADAMS CH. J.

The plaintiffs are creditors of the defendant William Thompson and as such they hold a mortgage executed to them by Thompson on a stock of goods. The defendants Nancy A. Rambo, Miria McConnell and Mary A. Thompson hold prior mortgages upon the same stock. This action was brought to set them aside, on the ground that they were fraudulent, and on the ground that they virtually constitute an assignment, and that, having been given with a view of preferring creditors, they are, under the statute, void.

I. There is no question but that Thompson was indebted to the mortgagees, to whom he elected to give a preference, by securing them by prior mortgages upon his stock. The indebtedness to them arose by reason of a loan to him of money, with which he commenced business. It is insisted, however, by the plaintiffs, that the mortgages were fraudulent, by reason of the fact that they were given for too large a sum. The facts pertaining to this matter we do not think it necessary to set out in detail. It is not denied that two of the mortgages are too large. But they are not very much too large; and we are well satisfied that there was no fraudulent intent on the part of the mortgagees. They are women, and apparently not much accustomed to business transactions of this character. The mortgagor, Thompson, was a relative, and business man. They had evidently placed great confidence in him. They had trusted him without security longer than he was worthy of credit, and when he became embarrassed and proposed to secure them, we think that they took it for granted that he would secure them in a proper way, and gave the matter but little personal attention or thought; and we do not think it occurred to them that the amount for which the mortgages were given was too large. We hardly think that Thompson himself made any intentional error in this respect.

II. We come, then, to the remaining ground upon which the alleged invalidity of the mortgages is placed, and that is, that they virtually constituted an assignment with preferences. It is not denied that they covered substantially all of Thompson's property, and that the aggregate amount was all that the property was worth. It appears, too, that the mortgagees were to take immediate possession by an agent, and proceed to dispose of the mortgaged goods, and apply...