Court Opinion

ID: 4929295
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:05:08.510738+00
Date Added: 2024-06-11T08:14:24.465246
License: Public Domain

Shepley, C. J.
— To secure the payment of certain sums due to Jotham S. Malbon and Elijah Wood, Estes made three notes of $200 each, in the name of Estes and Saunders, and at the same time executed a mortgage in their names of the goods then in a store occupied by Estes, as collateral security for the notes. This was done on December 4, 1848.
Malbon was authorized to sell the goods mortgaged, and sold to the amount of about $180. About $100 of this amount was sold to Estes, for which Malbon did not receive payment. He states that he received about $70 for the goods thus sold. On January 6, 1849, he sold and conveyed his interest in the notes and mortgage to Estes and Brown and received therefor the amount, as he states, due to him from Estes, being about $467. He allowed in part' payment the $70 received for goods sold; received $100 in a note of Estes and Brown payable to Estes’ wife, to pay her for that sum before loaned by her to him; and received their note, with Nathaniel Hilton as surety, for the balance due to him of about $304. Service of the trustee process was made upon him on January 29, 1849. At that time he had no goods of Estes and Saunders, unless he should be held accountable for the goods, which were sold by him, while he continued to be a mortgagee. For those sold to Estes he cannot be held accountable. He received no pay for them. They were retransferred to the same member of the firm of Estes and Saunders, from whom they were received. It amounted to no more than a relinquishment of any claim to them by virtue of the mortgage. Nothing was thereby taken from the partnership fund.
When Malbon states in his disclosure, that Estes owed him about $467, it is manifest upon an examination of the whole disclosure, that he did not mean to be understood to say, that the amount was due from Estes alone as a sole debtor. For he subsequently states that $336,17, part of that sum, arose out of a liability assumed for Estes and Allen to Fisk and Dale. The disclosure does not exhibit the manner in which Estes became indebted to him for the difference between that *149sum and the $467. It may have been due to him from Estes and Saunders, as the other amount was from Estes and Allen. It not appearing to have been the private debt of a partner, for that amount Malborn might retain the partnership property or its proceeds without being liable to any imputation of fraud upon the creditors of the firm. That amount being greater than the amount received for goods of the partnership sold by him, he is entitled to be discharged.
Elijah Wood, the other mortgagee, states, that he transferred all his interest in the notes and mortgage to Estes and Brown before the service of process upon him, and received in payment of the amount due from Estes to him a note made by Sullivan Lothrop, and that none of the goods mortgaged came into his possession. It does not appear, that the note of Lothrop was given for a debt due to Estes and Saunders. It does not therefore appear, that any goods or funds belonging to the firm of Estes and Saunders came to the possession of Wood, and he is entitled to be discharged.
Nathaniel Hilton appears to have been made an assignee of the mortgage to secure him for becoming surety for Estes and Brown on their note to Malbon. He does not appear to have had possession of or to have exercised any control over the goods, and he must be discharged.
Brown did not hold whatever interest he acquired in the goods as a trustee of Estes and Saunders. He held it as a purchaser for a valuable consideration, and, as he states, without any knowledge, that the mortgage had been made to secure any debt due from Estes alone to Wood or Malbon. Being, so far as appears, a bona fide purchaser through others from one of the partners, he cannot be held as trustee of the firm. Exceptions overruled.
Wells, Howard and Hathaway, J. J., concurred.