Chase, Merritt & Blanchard v. Walters

Cole, Ch. J. ^MecEfto evidence. I. The first error assigned is, upon the overruling of an objection by the plaintiffs to certain testimony offered by the garnishee. The objection was general, specifying no ground upon which it was rested. In such case, the party objecting cannot take advantage thereof in the Supreme Court. This point has been frequently ruled. See Clark v. Connor, ante, 310, and cases there cited. s. eeatjduakce: knowi■when a creditor, II. The next error assigned is, upon the refusal of the court to admit certain evidence offered by the plaintiffs, To understand this, it is necessary to state the leading facts of the case. That the defendant J. M. Walters was justly indebted to the plaintiffs, and also to the State National Bank of Keokuk, the garnishee, is conceded by both parties. The creditors had, respectively, been pressing the debtor for payment. Each had knowledge of the claims of the other. The plaintiffs’ agent arrived in Keokuk, where the debtor resided and the garnishee did business, on a Saturday, and went there for the purpose of obtaining payment, or security by law, or otherwise. On the Sunday following, the debtor called upon the officers of the garnishee, who knew of the arrival of plaintiffs’ agent, and proposed to execute to the bank a mortgage upon his stock of goods to secure his debt to the bank. The attorney of the bank was also seen that evening, and arrangements were made for an early meeting, at the bank on Monday morning, to prepare and execute the mortgage; and it was done accordingly. The mortgage [468] was recorded at nine o’clock on Monday morning. Some time after that, but during that day, the plaintiffs obtained their attachment, and procured the bank to be garnished thereunder. The bank took possession of the stock of goods under the mortgage, and sold sufficient thereof to satisfy the claims against Walters secured by it, and turned the balance over to the sheriff having the attachment. The issue made by the pleadings is, as to whether this mortgage was fraudulent. The plaintiffs offered to prove, by a witness on the stand, that he had a conversation with Walters on the Sunday evening before the mortgage was made, and that Walters then stated it was his purpose to defraud the plaintiffs by executing a mortgage to the bank; and also offered to prove by another witness that Walters, immediately after the mortgage was made, declared he did it for the same purpose. To this evidence the record shows that the defendant objected, generally, and the court sustained the objection ; and the bill of exceptions states that the court so ruled, because the plaintiffs did not propose to carry knowledge thereof home to defendant; and further ruled that plaintiffs might give evidence of any act or declaration of Walters showing such intent, which they proposed to bring home to defendant. Ordinarily, where a creditor assails a conveyance as fraudulent, he must prove the fraudulent intent on the part of the grantor, and that the grantee participated in, or, at least, had knowledge of, that intent. We should hesitate before holding (as the language of the bill of exceptions seems to show the District Court held), that it was necessary to bring home to the grantee, or offer to do so, knowledge of the particular act or declaration of the grantor, showing the fraudulent intent. It might be sufficient to show the grantee’s knowledge of that intent, [469] without bringing home to him the precise act or declaration whereby he had manifested it to others. But we rest our affirmance of this ruling of the District Court upon the broad ground, that, where two or more bona fide creditors are engaged in a race for priority, the one securing it cannot have his right defeated, and be postponed to a more tardy or less fortunate one, by showing the fraudulent motive, and knowledge of it by the creditor, which prompted the debtor to give such priority. Fraud, in its legal sense, cannot, without more, be predicated upon such a transaction. The evidence, then, which was excluded was immaterial; and for this reason, if for none other, the court ruled correctly in excluding it. III. The only other error assigned which it is necessary to notice, arises upon the modification and giving of instructions. The District Court held, and modified and gave instructions accordingly, that to accept a mortgage from a debtor, who gave it with the intent, known to the mortgagee, to delay or defraud another creditor, was not void or fraudulent, if the creditor accepted it for the purpose of securing a bona fide debt due such creditor from the mortgagor. This ruling is in accordance with the views hereinbefore expressed, and is Affirmed.