Court Opinion

ID: 5507450
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:19:54.495665+00
Date Added: 2024-06-11T08:34:05.095503
License: Public Domain

FOLLETT, J.
The defendants Matthews and Waddell have not answered in this action, evidently desiring that the plaintiffs should prevail. This is a race between creditors, at the outset of which the debtor favored his landlord and indorser, but before the close he attempted, in the interest of other creditors,—these plaintiffs,— to destroy the securities which he had voluntarily given, on the ground that they were fraudulent; but on the trial he testified in behalf of the plaintiffs, and when confronted with his notes and the indorsements which the mortgages were given to secure he admitted that all of them were just and honest, and no attempt was made to show that they were not. It is apparent that Matthews gave these mortgages with an honest intent to secure to his creditor his just demands, but that for some reason, within 30 days, he came to regret his act, and attempted, by "permitting other credit- , ors to charge him with fraud, which he failed to deny, to substitute them in the place of his landlord. The court found that the mortgages were given and received to secure honest debts, without any intent on the part of the mortgagor or mortgagees to hinder, delay, or defraud creditors. No other conclusion was possible under the evidence. These mortgages were not fraudulent in fact, nor were they fraudulent in law. Matthews had a legal right to secure Mr. Sturtevant by chattel mortgages on his property, which he did. The court finds that Sturtevant did'not know that the trust mortgage was to be executed until after «it had been executed and delivered. It is apparent that Matthews, being in poor health, and desiring to put some persons in charge of Ms property, which he was about to leave, devised, through his attorney, tMs scheme of giving to trustees a mortgage upon the property so as to give them a right to possession and power to manage. The court refused to find that Matthews was insolvent when the mortgages were given, or that he was insolvent at the date of the trial, and he testified that he had property not included in the mortgage. It does not appear that an execution had been returned unsatisfied against him, or that the sheriff had been unable to find property subject to execution, and we think the refusal of the court to find insolvency was justified by the evidence.
Had Sturtevant participated in this scheme, a more serious question might have arisen; but he did not. That no ground was established for setting aside the two mortgages given to Sturtevant *1089is apparent. The exact situation in respect to the trust agreement is not shown. Whether the defending trustee was in possession of the property and engaged in running the house at the time of the trial is not disclosed by the record. To set aside this mortgage without setting aside those given to Sturtevant would avail the plaintiffs nothing, for the trust mortgage in no way increases the burden upon the property, as the executor of the mortgagee has the right to close his mortgages at any time; and when the amount secured by them is paid, the third falls. Again, the trustee, having acted in good faith and without any intent to hinder, delay, or defraud the mortgagor’s creditors, is entitled to be protected. The judgment should be affirmed, with costs.
PARKER, J., concurs.