Case Name: August Schoverling et al., appellants, v. John Kovar et. al., appellees
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1883-07
Citations: 15 Neb. 306
Docket Number: 
Parties: August Schoverling et al., appellants, v. John Kovar et. al., appellees.
Judges: All of the judges concur.
Reporter: Nebraska Reports
Volume: 15
Pages: 306–308

Head Matter:
August Schoverling et al., appellants, v. John Kovar et. al., appellees.
Debtor and Creditor: sale. A sale by one member of an insolvent firm of bis individual property at a fairprice, in payment of bis antecedent personal indebtedness, without any secret trust or benefit reserved to himself, and by which a preference is given to such creditor over those of the firm, is opposed to no principle of law, and will he upheld.
Appeal from Colfax county. Heard below before! George W. Post, J.
Phelps & Thomas, for appellants.
J. M. McFarland and Geer & Reeder, for appellees.

Opinion:
Lake, Ch. J.
This is an appeal from Colfax county. The action was brought by the appellants, who are judgment creditors of' one John Shorney and the defendant John Kovar, as co-partners under the name of Shorney & Kovar, to have certain real estate subjected to the payment of their judgment. The land in controversy formerly belonged to Kovar, and was by him conveyed to the defendant Hahn but a few days before the recovery of the judgment. It is charged that this conveyance was fraudulent as to the creditors of said firm, and especially so as to the plaintiffs. But the court below found otherwise, and the question is brought here for review.
To this charge of fraud the defendants all oppose a general denial. In addition to this, the defendant Hahn answers that at the time of the conveyance Kovar, who is his son-in-law, was justly indebted to him in the sum of four-hundred and fifty dollars, together with about ten dollars of interest accumulated thereon, in satisfaction of which he took the land in good faith. To this point the evidence in the case is chiefly directed.
From a careful reading of the record we find that, although there are some little discrepancies and want of certainty in some of the testimony to the transaction, justly attributable, doubtless, to the fact that the witnesses had but a very imperfect understanding and use of the English language, in which they gave it, it is very clear as to Hahn at least, no fraud is shown, whatever may have been the design of Kovar in deeding the land.
It is shown by an abundance of testimony that early in the year 1881, on two occasions, Hahn loaned to Kovar, in all, four hundred and fifty dollars, for which, with interest at eight per cent, he was still indebted when the deed was made. It is also shown by the testimony of three or four witnesses, and is disputed by none, that when the money was obtained, and several times afterwards on his attention being called to it by Hahn, Kovar promised to give him security for the loan on this very land. Eor some reason, however, the matter was put off from time to time, and nothing done about it until after the firm of Shorney & Kovar had become embarrassed and unable to pay their debts, when, as ".the shortest way," as Kovar says, "to satisfy the claim," it was arranged that Hahn should take the land in payment, and a deed was made accordingly.
We have looked in vain for evidence of bad faith on the part of Hahn in this transaction. Indeed it is exceedingly doubtful whether even as against Kovar a finding of fraudulent intent could be upheld. If the value of the land had exceeded and been greatly disproportionate to the amount due to Hahn, there would be reason for saying that, as to the excess, the design was to protect it for Kovar's use against the claims of his other creditors. But no such disproportion is shown. The amount really due to Hahn when he took the conveyance was, as the testimony shows, $465, while the value of the land did not exceed $500 at most. Indeed, according to a decided preponderance of the evidence, the land was not worth more than $450.
Of the persons who testified to its value, the defendants Hahn and Kovar placed it at from $450 to $500; and the witnesses Arnold and Dostil, who were disinterested, at just $450. It is true that in his cross-examination Kovar seems to give assent to a much larger valuation, but the form of the question put to him, the present tense being used, seems to indicate that the value at the time of the trial, and not at the time of sale, which was a year before, was referred to. The valuation given by these witnesses seems to have been fair and satisfactory to the plaintiffs, for they produced no testimony against it.
We have here, then, as between these parties, clearly established, a sale by one member of an insolvent firm of his individual property, át a fair price, in payment of his antecedent personal indebtedness, without any secret trust or benefit reserved to himself, and by which a preference is given to such creditor over those of the firm. This the debtor had a right to do. Such a disposition of property is opposed to no principle of law, and will be upheld. Omioforcl v. Kirlcsey, 55 Ala., 282 (28 Am. Repts., 704), and cases there cited. A debtor who is unable to pay all his debts has an undoubted right to apply his means to the payment of such of them as he sees fit, except as restricted by our present assignment law [Compiled Statutes, 1883, p. 812], which is not here involved. There is nothing in the record which calls for correction, and the judgment will be affirmed.
JuDGMENT aeeibmed.
All of the judges concur.