Court Opinion

ID: 6990878
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:24:44.830209+00
Date Added: 2024-06-11T16:09:36.599283
License: Public Domain

Pleasants, J. In May, 1883, James E. Walsh, then and ever since a resident of Peoria, purchased at sheriff’s sale a stock of dry goods in Springfield, and there continued the business under the management of Thomas McGrath, his father-in-law, until February 18, 1886, when he failed and made a general assignment for the benefit of his creditors. Having become embarrassed in the operation, on the 16th of January, 1886, he executed eight judgment notes to divers parties, respectively, for money borrowed of them and used in the business, aggregating about 813,000. Early in February he executed three others of like character, amounting together to something over 83,000. one of which, for 81,901.50, was payable to the Marine Bank and is here in controversy. It was delivered to Dennis Biordan, for his use, and was given for money borrowed of him to meet pressing claims and was so applied. Biordan retained it until the day before the assignment, when he transferred it with his indorsement to the bank and obtained credit for the amount. Why it was made payable to the bank is perhaps not clearly explained. It seems that Eiordan had made frequent loans to-Walsh (or to McGrath for him) when he was pressed, without taking notes, which were repaid in a few days. He expected this would be so paid, and did not take the note until some time after the loan had been made, and when he had become somewhat anxious about it. Perhaps he was indebted to the bank or expected to bo, and hoped to use it there without indorsement. Whatever the reason, it is abundantly shown to have been delivered to him for his own use and for money actually loaned by him. On the 16th of February, upon McGrath’s report of the condition of the business and at his urgent request, Walsh came to Springfield, and after conferring with Eiordan and with Mr. Bradley, who held some of these notes as attorney, it was deemed advisable for the protection of the payees that judgments should be taken upon them. This was done in the afternoon of the 17th. Eiordan requested the bank to take the judgment that was then entered on its note, as he was liable on it. Later in the evening Walsh sent for Mr. Patton and on his advice as counsel determined to make a general assignment for the benefit of his creditors. Both he and Mc-Grath positively testified that the subject of an assignment was not contemplated by them, or by either of them so far as the other knew, until after the judgments were entered up, and then only on Mr. Patton’s advice. The deed of assignment was executed and filed early on the morning of the 18th and Eiordan was appointed assignee, who in due time and under the direction of the County Court made sale of the property, and holds the proceeds. Sixteen judgment claims, including that of the bank, were filed and asked to be treated as prior liens. The unsecured creditors filed objections thereto, on which issue was made and trial had, resulting in a verdict for the judgment claimants. So also in the Circuit Court; and hence the further appeal here prosecuted. Appellants contend that these judgments were part of, and one with, the assignment, and therefore void under the statute, as preferences. For proof they rely on the condition of the business as necessarily known to Walsh and these payees when the notes were executed, and the circumstances and course of proceeding by them from that time until the deed of assignment was made. It would be useless testate these facts or to review the argument in detail. That it was ingenious and forcible, and of a character especially apt to persuade the average jury—which is found as a rule to be sufficiently alive to what are or are claimed to be signs of fraud—may well be conceded. But it was met by the interval of time between the making of the notes and of the assignment, by the positive testimony referred to of the only parties who certainly knew the intention, and by other circumstances, notably the large amount of indebtedness paid by Wa'sh, through Mc-Grath, in December, January and February preceding the assignment, in excess of the amount realized on sales during that period, as showing a hope and purpose, continuing after these notes were made, to carry on the business. Upon this conflict of evidence two juries have passed, reaching the same conclusion. The instructions given were all that appellants asked, with the exception of one to the effect that the relation of debtor and creditor between Walsh and the bank did not arise until the delivery of the note in controversy to the bank, and t! at said note is not to be considered in existence until such delivery. Without passing upon the technical soundness of the proposition last stated, we are of opinion that, as applied to this cise, it was clearly misleading, the proof being that it was delivered to and received by Biordan. As evidence of Walsh’s indebtedness to him, and the means of securing it, upon the question whether it was or was not a part of the assignment, its bearing is precisely the same as if it had been made payable to him, or been by him immediately transferred to the, bank. For that reason we think it was properly refused; and besides, if it had a legal existence at any time before the assignment was contemplated, it would bo immaterial whether that time was an hour or a month. Judgment affirmed.