Court Opinion

ID: 8653889
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:13:54.298098+00
Date Added: 2024-06-11T16:56:37.032015
License: Public Domain

Bartoh, J.:
The question to be determined on this appeal was raised in the creditor’s bill in the case of Ogden State Bank v. Barker (decided at this term, ante p. 13), 40 Pac. 765. It *28appears from the record that the appellant was a judgment creditor of William Barker, that Barker conveyed his land to his sons, and that then all the Barkers joined in a mortgage to the respondent Brough. The appellant sought to have both the deed and mortgage set aside on the ground that they were fraudulent and void, claiming that they were made without consideration, and to hinder and delay the creditors of William Barker. The court canceled the deed, and declared it.void, but refused to cancel and set aside the mortgage, and dismissed the action as to Brough.
Counsel for the appellant insist that the mortgage was given to Brough without consideration, in a secret trust, and therefore should be canceled and set aside. This position does not appear to be sustained by the record. It is shown by the evidence, substantially, that Brough was the acting cashier of the Citizens’ Bank; that certain notes came into his possession for collection by reason of his position in the bank; that • he placed them in the hands of attorneys, and demanded that suit be brought to enforce payment, unless security -be given; that the mortgage was given to s.ecure the payment of the notes; that Brough was made trustee in the mortgage without his knowledge; and that neither he nor the owner of the notes knew anything of its execution until after it was made. Each nóte, on its face, represents a valuable consideration, and there- is evidence tending to show such consideration in fact. There is nothing in the record to warrant an assumption that there was no valuable consideration given for these notes. Nor is such the contention of counsel for the appellant, for their contention is that the mortgage, not the notes, was given without a valuable consideration. Nor is there anything to show that the notes were not executed in good faith. If, then, the notes were made for a valuable consideration, upon what theory of law can it be contended that the mortgage *29given to secure them was void for want of á valuable consideration?
The notes, having been given for value, and evidencing the indebtedness of the mortgagor to the real owner of them, constituted a valuable consideration for the mortgage. The mere fact that the mortgagee was not the real owner of the notes, but was simply 'a trustee or agent for the owner, does not affect the validity of the mortgage. Nor does the fact that the mortgage was executed by all the Barkers, and at a time when the debt which was merged in the judgment of the appellant was in existence, affect j.ts validity. Neither is the validity of the mortgage affected because, among the notes which it secures, there is one which was made by Franklin J. Barker, and for which William Barker was not liable. It is apparent from the record that the notes for which William Barker was liable constituted Iona fide existing claims against him. These he had a right to secure, even though the debt which he owed the appellant was in existence at the time of the execution of the mortgage, because he had a right to prefer as a creditor the owner of the notes. Even if such preference were made with a fraudulent design, or with the intent to hinder and delay the appellant in' the collection of his judgment, still, if neither the trustee nor the owner of the notes participated in the fraud, or had any knowledge of it, the validity of the mortgage would not be affected. Pettit v. Parsons, 9 Utah, 223, 33 Pac. 1038. There is no contention that there was any such participation or knowledge on the part of the trustee or mortgagee or owner. Nor does it appear from the evidence that it was a secret trust. It is shown that the trustee was not present at the time the mortgage was made, and knew nothing of it until after its execution. We' áre of the opinion that the cancellation of the' mortgage was *30properly denied, and the action properly dismissed as to the respondent Brough. The judgment is affirmed.
Merritt, C. J., and Smith and King, JJ., concur.