Antram v. Burch

BIGGS, J. Prior to Sept. 23, 1898, one William Antram conducted a mercantile business in the town of Hurdland in Knox county. On that day he executed and delivered to the plaintiff in this suit a mortgage on his entire stock of goods to secure an alleged indebtedness of about $1,800, which was evidenced by a note of even date and due one day after date. The plaintiff took immediate possession of the goods and locked the storeroom. The next day after the mortgage was given several creditors of William instituted attachment suits against him in the circuit court, and the defendant, who is the sheriff of the county, levied the writs on the stock of goods as the property of William. Afterwards the goods were sold by defendant under the order of the court for $1,286.35. In'this action the plaintiff seeks redress for the alleged unlawful levy. It is difficult to determine the character of the action attempted to be stated in the petition. The pleader first alleges the giving of the mortgage; his possession of the goods; their unlawful seizure by the defendant, and that the goods were subsequently sold under the order of court. The petition then closes with a prayer for judgment against the defendant for the amount of the proceeds of the sale. The defendant in his answer admitted the levies and the sale by him, but averred that the chattel mortgage “was [259] without consideration and fraudulent and given Jby said William Antram and accepted by the plaintiff for the purpose and with the intention of hindering and delaying the creditors of the said William Antram,” etc. The new matter in the answer was put in issue by the replication. The issues were submitted to a jury and were found in favor of the defendant. Plaintiff has appealed. Counsel insist that it is not permissible for the defendant to defend against the action for the alleged fraud in tire mortgage, the contention being that the attaching creditors only can assail it as fraudulent. It is undoubtedly true that the plaintiffs in the attachment suits could have instituted a suit to set aside the mortgage. R. S. 1899, sec. 416. But they also had the right to test the validity of the mortgage under the attachments, and having so elected the sheriff stands for them in the litigation. By virtue of the levies he has a special interest in the property as the trustee, so to speak, of the plaintiffs in the writs. The present action is brought against him upon the theory that the goods belonged to plaintiff, and that therefore the defendant in making the levy committed a trespass. The right of plaintiff to recover hinges solely on the question of title to the goods, and that is the issue that is tendered by the pleadings. If the mortgage was in fact without consideration, or if it was contrived to hinder or delay the creditors of William, then in contemplation of law the title to the goods did not pass by the mortgage, but remained in William, and the defendant had a right to show this in justification of his action in making the levies. In the trial of the cause the court permitted the defendant to prove the declarations of William which indicated an intention on his part to make a fraudulent disposition of his property. At the time the evidence was received the court cautioned the jury that as the alleged statements were not [260] made in the presence of the plaintiff, they could only be received as tending to prove a fraudulent purpose on the part of William in making the mortgage. In its instructions the court also directed the jury that they should not consider this evidence in determining the good or bad faith of plaintiff' in accepting the mortgage. The action of the court in this matter was right. Again, it is urged that even though the mortgage was tainted with fraud in the first instance, it was cured by plaintiff’s subsequent possession of the goods under it. That principle is applicable only where a chattel mortgage is constructively fraudulent, that is where the mortgagor is left in possession of the goods with the understanding that he might sell them for his own benefit. It can not be applied" where the plaintiff holds the possession of the goods under a mortgage which was found to be actually fraudulent, that is where it was executed as charged here, for the express purpose of cheating or defrauding the creditors of the mortgagor. Therefore the objection of appellant- that the court in the instructions failed to tell the jury that if plaintiff took possession of the goods prior to their seizure, the verdict should be for him, must be overruled. Lastly it is claimed by appellant that the only defense sufficiently pleaded in the answer is that the mortgage was executed without consideration, and consequently that evidence of an actual fraudulent design in the execution of the mortgage was improperly received. Conceding this construction of the answer to be correct, it was competent in support of the averment to receive any evidence tending to prove an actual design in the execution of the mortgage to cheat or delay the creditors of William. To this extent only did the inquiry go, and the appellant has no reason to complain of it. With the concurrence of the other judges the judgment of the circuit court will be affirmed. It is so ordered.