Court Opinion

ID: 7103936
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:18:41.945489+00
Date Added: 2024-06-11T16:13:30.434190
License: Public Domain

Beck, J.
(dissenting). — The facts controlling the conclusions which I reach in the case are few and simple. Linderman’s mortgage was executed by one partner upon his interest in the firm property, to secure a personal debt of his own. The mortgage now held by the barb-wire company was executed upon Woodworth’s individual property to secure his individual debt. It will be observed that when his mortgage was executed the firm had been dissolved, and he owned all the property. Now, it cannot be doubted that the mortgage to Linderman would bind the’ property, except as against creditors, or others holding equities by reason of the partnership and partnership transactions ; that is, as between Linderman and W oodworth, and persons claiming under them, with no rights and equities other than they possessed, Linderman’s mortgage is valid and effective. The claim and debt for which the mortgage was given was not a partnership transaction. It was an individual debt, incurred for the purchase of Mather’s interest in the property. Woodworth’s mortgage to Mather was not a partnership transaction. It was a mortgage upon individual property to secure an individual debt. There are no partnership interests or equities in - the transaction. Mather and the barb-wire company — the first being the grantee of Woodworth, and the second the assignee of the grantee — stand in Woodworth’s shoes. They have no other or higher rights than he had. Woodworth had conveyed the property by an instrument which, as we have seen, passed the interest he held at the time to Linderman. *148He could not convey it so as to defeat Linderman’s rights, unless to one who had some equity arising from partnership rights and relations, or to one having no notice of the mortgage to Linderman. As I have pointed out, the barb-wire company has no right or equity based upon the partnership. The evidence shows that Mather had notice of the mortgage to Linderman, and that he transferred the note and mortgage as security for a prior indebtedness to the barb-wire company. Upon these facts the company must be held to have .no rights different or other than those held by Woodworth and Mather, respectively.
The evidence shows that the amount due Linderman upon his chattel mortgage is six hundred and twenty-five dollars. The value of the property of the firm upon which his mortgage was executed does not clearly appear; but it is agreed by the parties that when the judgment was rendered in this case the amount of money in the receiver’s hands was about six hundred dollars. The original debt to Linderman secured by the mortgage was about fifteen hundred dollars. Woodworth had paid one thousand dollars upon it. An agreement between the partners requires the stock to be kept up to three thousand dollars. We think it may be presumed, upon this evidence, that the stock of the firm was worth three thousand dollars, and Woodworth’s interest in it was fifteen hundred dollars ; and it will be presumed that the stock was reduced so that only six hundred dollars was left in the hands of the receiver by the appropriation of the money or property to partnership purposes ; that is, all the money and property had been applied to firm debts, or used in the firm’s business, except the six hundred dollars. Now, Linderman had a mortgage upon the half interest in the property, of which Mather had notice. The law will not permit the parties to dispose of the property so as to defeat Linderman’s mortgage. They cannot claim that he can recover only one-half of the property remaining on hand. It will be presumed that the parties reserved his interest, and that the six hundred dollars is subject to *149his mortgage. Unless this be held, the partners had it in their power to defeat Linderman’s mortgage ; and, as I have shown, the barb-wire company stands in Mather’s shoes, and has no rights other than such as he had. Surely he could not claim any part of the six hundred dollars, and the barb-wire company cannot. Linderman, therefore, is entitled to be first paid out of it. In my opinion the judgment of the district court ought to be affirmed.