Menzesheimer v. Kennedy

LyoN, J. The giving of the chattel mortgages by Cahn to the plaintiffs on the goods in controversy is not a voluntary assignment for the benefit of creditors, in the sense in which that term is used in the statutes. The transaction has none of the essential characteristics of such an assignment, but is nothing more nor less than the giving of security by mortgage by an insolvent debtor to two of his creditors, leaving his other creditors unsecured. If there is no fraud in the transaction, he may lawfully do this. This court has repeatedly so held. Many of the adjudications are cited in the briefs of counsel. In these cases the subject is fully considered, and it is entirely unnecessary to repeat -the discussion here. The court found that the mortgages were given to secure Cahn’s indebtedness to the plaintiffs, and for no other purpose. As a matter of course, [415] this finding negatives the proposition that they were given for. the further purpose of defrauding other creditors of Cahn. Inasmuch as the evidence has not been preserved in the record, the accuracy of such finding cannot be questioned. 'Neither is there anything in the findings which raises any inference of fraud. True, the mortgages operate to give the plaintiffs a preference over other creditors of Cahn, but, in the absence of fraud, such preference, nob being made in a.voluntary assignment for the benefit of creditors, is lawful. It is also true that the value of the property mortgaged exceeded the debts the mortgages were given to secure. But that circumstance is not necessarily a badge of fraud. At most, it is a fact to be considered by the court or jury in determining the question of fraud, and presumably was so considered by the court in this case. The judgment of the circuit court must be affirmed. By the Oourt.— Judgment affirmed.