Robbins v. Parker

Wilde, J. This case, by the consent of the parties, has been submitted to the determination of the court, upon the facts and evidence reported ; the court being authorized to draw such inferences from the evidence, as the jury would be justified and bound to draw, if the case had been submitted to them. The plaintiff’s title to the goods replevied is derived from a mortgage deed to him from Eli Robbins, and the principal question is, whether this is a valid mortgage, or is fraudulent as against creditors ; the goods having been attached by the defendant, as the property of said Eli, the mortgagor. The property mortgaged was “ all the hay, grain and produce standing ” on the mortgagor’s farm at the time the mortgage was made. And the defendant’s counsel contends, that this property was in its nature subject to be consumed in its use, and was intended to be so consumed by the mortgagor ; and that the mortgage of it, therefore, is prima facie colorable and fraudulent against his creditors. And this inference is fully sustained by the decision in Sommerville v. Horton, 4 Yerg. 541, the principle of which decision seems to be admitted is correct, by Morton, J. in deliver ng the opinion of the court in Shurtleff v. Willard, 19 Pick. 212. The principle, however, on which such a fraudulent intent is to be inferred, must be understood with some limitations. We have no doubt that articles, in their nature subject to be consumed in their use, may be mortgaged without any imputation of fraud, provided they are not to be used, and may be kept [120] without damage until the mortgage debt shall become payable. But if the articles mortgaged are perishable, and cannot be so kept, or if they are mortgaged under an agreement or understanding that they may be used and consumed by the mortgagor, (as the understanding of the parties seems to have been in the present case,) then we think the transaction must be considered as collusive and fraudulent against creditors. No other reasonable inference from the conduct of the parties to the mortgage can be made. The mortgagor used and consumed the property in the same manner as he would have done if no mortgage had been made ; and this, with the knowledge of the mortgagee, and without objection on his part. It is true that Eli Robbins, the mortgagor, testified that he had settled with his father, the mortgagee, for the produce used, and had paid him the money for it; but he did not testify that the money had been paid before the defendant’s attachment. If it had been so paid, it would have had a tendency, without doubt, to rebut the inference of fraud and collusion. Another badge of collusion and a secret trust between the parties is, that the money paid was not indorsed on the note of the mortgagor. Nor is it stated how the settlement was made, nor how much money was paid. For aught that appears, the sum paid might have been very inconsiderable, and much less than the value of the produce consumed. Indeed, the whole testimony of the mortgagor, instead of rebutting the presumption of fraud, has a strong tendency to confirm it. The conduct of the parties is inconsistent with the object of a mortgage, which is to secure tno weditor. There was another objection to the plaintiff’s title, as to which, however, it is unnecessary to give an opinion. According to the agreement of the parties, the verdict, which was for the plauatiff, is to be amended and reversed, and to stand as a general verdict for the defendant; and damages are to be assessed as is stated in the report of the case.