Court Opinion

ID: 7936631
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:10:17.252429+00
Date Added: 2024-06-11T16:33:33.948644
License: Public Domain

McGrath, J.
Plaintiff and his two sons were carrying on a private bank at Hanover. The case was tried upon the theory that the father and sons were partners. Plaintiff furnished all the capital, and the notes and securities held by the bank ran to him. One Potter was indebted to the bank, and assigned to plaintiff a note and chattel mortgage against the grocery stock of one Bates, receiving in consideration therefor a receipt in full for his indebtedness to the bank, and a bank credit for the balance. The mortgage was afterwards reduced by payment to $250, but Bates owed the bank $215 in addition, which was unse*408cured. Bates had given other mortgages upon his stock, —one of 8550 to defendant Colgrove, and another of §310 to defendant Bates, who was the grocer’s mother. Bates owed other unsecured debts, and his creditors were pressing him for payment. Daniel D. Eowley, in company with an attorney, saw Bates with reference to securing the payment of the indebtedness to the bank. The attorney advised Daniel D. that the best method of securing payment was to buy out Bates, and negotiations were entered into with reference to such purchase. Defendants’ version of the affair is that Bates gave a bill of sale of the stock and book accounts, in consideration of which the mortgage held by Horatio N. Eowley, Sr., was to be considered as paid and treated as discharged, the mortgages held by defendants were to be paid, and out of the book accounts the bank’s unsecured claim was to be paid, after which the accounts receivable remaining after the payment of the bank’s unsecured claim were to be turned /back to Bates. A bill of sale was immediately prepared by the attorney, which, by direction of Daniel D. Eowley, was made out in favor of Horatio N. Eowley, Jr., who afterwards took possession thereunder. Defendants’ mortgages were to be paid, one at once, and the other within five days. Defendants waited' some 20 days, and, the mortgages not having been paid, took possession under their mortgages, after which Horatio N. Eowley, Sr., replevied under the first mortgage. Defendants had judgment, and plaintiff appeals.
The jury have in fact determined that the mortgage ’held by Horatio N. Eowley, Sr., was held for and owned iby the partnership; that the purpose of the purchase of the stock of goods was to secure the unsecured indebtedness due the bank; and that defendants’ version • of the transaction is the correct one. There was in this case no attempted application of partnership assets to the payment of an individual debt, nor was this in any sense a purchase *409•of a stock of groceries for or in the interest of one member of the partnership. The avowed purpose of the negotiations with Bates, as testified to by Daniel D. Bowley, was to secure the payment of the debt due the. bank. Prior to the actual transfer, Horatio N. Bowley, Jr., knew only of this purpose. He gave no instructions of an ihdividual' character. He did hot know of the contemplated purchase, or that he was to be the assignee, until the bill of sale had been actually executed and delivered. The first mortgage was in fact the property of the bank. It is as though payment of that mortgage had been made to the bank. Such payment would operate as a discharge. Horatio N. Bowley, Jr., was simply designated as the assignee. He took, not for himself, but for the bank.
Suppose it be conceded that the agreement to pay the incumbrances was ultra vires, the defendants were proceeding, not against the bank upon that agreement, but against the property under the mortgages. The bank took the stock of goods subject to these incumbrances, and, the prior mortgage having been satisfied, defendants had a right to proceed against the stock.
The judgment is therefore affirmed.
Hooker, C. J., Grant and Montgomery, JJ., concurred. Long, J., did not sit.