Court Opinion

ID: 6516601
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:27:14.634963+00
Date Added: 2024-06-11T15:54:55.159599
License: Public Domain

COLEMAN, J.
The purpose of the bill, was-to have a mortgage, executed by H. C. Harvey & Co., a partnership, to one J. J. Snyder, declared a general assignment. The bill averred the debt of the complainant as existing *538before the execution, of the mortgage, that the consideration of the mortgage was to secure a past indebtedness, that the property conveyed, constituted substantially all the property of H. C. Harvey & Co., and the insolvency of the debtor. The insolvency of the debtor, and that the mortgage constituted all the property of the grantors, is nowhere denied in the answer. Although proof on these questions, was unnecessary the averments are fairly established. The evidence is overwhelming that McSparrin was a member of the partnership of H. C. Harvey & Co. so far as the rights of the complainant in this litigation are concerned.
However fraudulent may have been the mortgage to Snyder, it is binding on the parties, and may be enforced as a general assignment by any creditor, as much so as if he had been especially named as a beneficiary in the mortgage. The law of the case is fully stated in the case of Anniston Carriage Works v. Ward, 101 Ala. 670, and authorities there cited. The purchase of the stock of goods by the Fairfield Packing Company after the execution of the mortgage, was effected through McSparrin, a member of the firm of H. C. Harvey & Co., and it cannot set up the claim of being an innocent purchaser. We do not doubt the whole transaction was a mere sham, concocted in the interest of McSparrin. The consideration paid was only twenty-five dollars, for a stock of goods, confessedly worth at that time, between seven and eight hundred dollars, with an incumbrance not exceeding one hundred and fifty dollars. The mortgage to Snyder was to indemnify him as a surety for H. C. Harvey on a note for only fifty dollars, and the goods conveyed to secure his indemnity, according to the answer of the partners’ debtors and their evidence, were of the value of between seven and eight hundred dollars. The note on which Snyder was surety bears date anterior to that of the mortgage, and on its face, the mortgage shows that it was given to secure a past liability.
The respondents contend, however, that the mortgage was executed in pursuance of an agreement made at the time of the execution of the note, and must be given effect as of that date, and that the mortgage was in fact given to secure a debt contracted contemporaneously with the mortgage. Suffice it to sayón these issues, *539that the evidence does not sustain either contention. The debt for which Snyder was bound as surety, was payable to Young. Walker became the payee of this, debt, and a new note was given payable to him, with Snyder as surety as before. In addition, the evidence shows thatH. 0. Harvey & Go. promised to turn over to Snyder “a certain case of jewelry in their stock” “or to secure him out of their stock”, as his security ; the preponderance of the evidence being in favor of the promise to turn over a case of jewelry. The execution of a mortgage on seven or eight hundred dollars worth of property, to indemnify him as surety on a fifty dollar debt, was not in fulfillment of either. The evidence shows, however, that Snyder did not call for the fulfillment of the promise until after the arrest and commitment to jail of II. 0. Harvey, who was detected in an attempt to set on fire the store. So much fraud and trickery is rarely brought to light in one transaction.
It is proper to add that Snyder has set up no claim nor shown any interest in the litigation, farther than to insist that the debt to Walker upon which he is surety be provided for in the enforcement of the mortgage. The decree of the chancellor is in all things affirmed.
Affirmed.