Wafer v. Harvey County Bank
Citation | 46 Kan. 597,26 P. 1032 |
Parties | WAFER et al. v. HARVEY COUNTY BANK et al. |
Decision Date | 06 June 1891 |
Court | United States State Supreme Court of Kansas |
1. An antecedent creditor, who knows that his debtor procured goods and merchandise by fraudulent means, cannot by a chattel mortgage secure a lien on such fraudulently procured goods adverse to the innocent vendors of such goods.
2. An antecedent creditor, who knows that his debtor has procured goods and merchandise by fraudulent means, when the sale of such goods is partially induced by the representations of such antecedent creditor as to the credit of his debtor cannot by a chattel mortgage secure a lien on such fraudulently procured goods, adverse to the innocent vendors of such goods.
3. The failure of a chattel mortgagee to have his mortgage recorded for 43 days, or to disclose its existence to other creditors when the financial condition of the debtor is being discussed, and who promised the debtor that he would not disclose its existence to other creditors who were demanding payment or security for their claims, is strong evidence tending to show a fraudulent intent to hinder and delay creditors.
Commissioners’ decision. Error from district court, Harvey county; L. HOUK, Judge.
J. D. Snoddy and Green & Shaver, for plaintiffs in error.
Bowman & Bucher, J. W. Ady, and Jetmore & Jetmore, for defendants in error.
This is an action begun by the Harvey County Bank and R. M. Spivey as plaintiffs, against John F. Wafer, who was then sheriff of Harvey county. Wafer, as sheriff, had seized under various orders of attachment a stock of goods belonging to the attachment debtor, R. M. Hamill The bank and Spivey claimed to have the right to the possession of the attached property by virtue of a chattel mortgage thereon executed by R. M Hamill on the 20th day of March, 1884. The attaching creditors were made parties, and filed answers alleging that the chattel mortgage was fraudulent and void as against them. The case was tried to a jury at the March term, 1883, of the district court of Harvey county. The jury returned a verdict for the bank, and fixed the value of the goods at $21,896.17, and the value of the plaintiffs’ right of possession at $12,095.03. A motion for a new trial was overruled, and a judgment rendered on the verdict. The material facts disclosed at the trial are these: For many years prior to the commencement of this action the firm of Hamill Bros. had been engaged in merchandising in the city of Newton, and were a firm of good credit, and of high repute. As a matter of fact, on or before the 20th day of March, 1884, the firm, and especially D. Hamill, the principal partner, was largely indebted, both as a member of the firm and individually. D. Hamill was the active and controlling member of the firm, and his brother, R. M. Hamill, appears up to a certain date to have been subordinate. There is evidence tending very strongly to show that in October, 1883, the firm was dissolved, a notice of dissolution was published, and in the next issue of the paper after the publication of the notice of dissolution the card of the business firm was changed from Hamill Bros. to D. Hamill. The terms of this dissolution were such that D. Hamill assumed all the debts and liabilities of the firm, and alone had the right to collect all the claims and out standing accounts of the old firm. In January, 1884, a contract was entered into between D. Hamill and R. M. Hamill that reads as follows: At this time this contract was entered into the firm of Hamill Bros. were indebted to various creditors in the sum of $4,800, and they owed the Harvey County Bank a note of $5,000. R. M. Spivey was then, and for a long time before had been, the vice-president and active manager of the Harvey County Bank, and was in the full charge of its business. Some time after the contract of January, 1884, was made, R. M. Hamill went to Chicago to buy goods with which to replenish the stock. He carried with him a letter from Spivey, as follows: While R. M. Hamill was in Chicago, Spivey wrote the following letter to a wholesale firm there, from whom R. M. Hamill bought goods: On the 1st day of March, 1884, D. Hamill wrote to Norton & Cahill, salesmen for two large wholesale houses, from whom R. M. Hamill bought goods, the following letter: ...
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