Standard Paper Co. v. Guenther

Taylor, <T. We think all the findings of fact are supported by the evidence, and the only question upon this appeal is whether such findings support.the conclusion of law “ that the chattel mortgage so executed, delivered, and fiied is void as to the plaintiff’s claim against the Freie Presse Company, contracted in the interim between the making and filing of the garnishee’s mortgage.” We think this conclusion of law is supported by the third and seventh findings of fact. The third finding of fact, “that the defendant Guenther did not file his mortgage, at the solicitation of the Freie Presse Company, so as not to hurt and interfere with the advancement and business of said company,” is, in fact, a finding that said mortgage was kept off the record for the purpose of giving the company credit with those who thereafter dealt with them in the belief that their property was unincumbered. It follows, as a logical conclusion, that Mr. Guemth&r is estopped, as against those persons who have given the Freie Presse Company credit in the belief that the property of said company was unincumbered and upon the strength that its property was so unincumbered, from now claiming that he had a mortgage on such goods. This proposition is not seriously controverted by the learned counsel for the appellant, but it is claimed that the finding that the plaintiff gave the Freie Presse Company credit on the faith that its property was not incumbered is not supported by the evidence. It is true the president of the company, in his testimony, does not in express words say that the credit was extended to the company because its property appeared to be unincumbered; but he does say that, as agent of' the company, he investigated as to the property the company was in possession of at the time'the credit was given, and that he knew of no incumbrance on the same, and that they would have known of such incum-brance, had it been on file, through the mercantile agencies with which they were in communication. We think upon [107] tbis evidence the court very properly found that “ the credit was given in good faith, upon the strength that its property was not incumbered.” See Dyer v. Thorstad (Minn.), 29 N. W. Rep. 345, and note. — REP. We do not think the concession made by the attorneys for the plaintiff on the trial, “ that the garnishee, Guenther, had no actual intent to defraud any creditor of the Freie Presse Company by withholding his mortgage from record,” relieves him from the natural and legal consequences of such act. Under the facts found by the court, the withholding the same from record would operate as a fraud upon the plaintiffs, who have given a'credit upon the supposition that the property of said Ereie Presse Company was not incumbered, if he were now permitted, as against them, to insist upon his mortgage as an incumbrance upon such property. We wish it to be clearly understood that we sustain the judgment of the circuit court in this case upon the facts found in the third and seventh findings of fact, and that we do not determine that a chattel mortgage withheld from record without any agreement to so withhold it made with the mortgagor at the time the same is executed, is necessarily void as to the claims of all creditors who become such after the date of the mortgage and before the date of its filing, whether such credits were or were not given in the belief that the property of the mortgagor was - unincum-bered, and relying on, that fact. That question is not in this case, and we prefer not to pass upon it in the determination of this appeal. By the Oourt.- — The judgment of the circuit court is affirmed.