Court Opinion

ID: 4736522
Source: CourtListenerOpinion
Date Created: 2021-08-12 05:51:08.413669+00
Date Added: 2024-06-11T08:08:17.872464
License: Public Domain

Mr. Justice Allyn
dissented, as follows:
The appellee Sarah McMahon brought suit for foreclosure-in the District Court at Tacoma, on a mortgage made by A. Simon and wife to appellee, February 28, 1885, to secure a. note for $700, made at that date to her. The appellants-M. D. Wells & Co. were made parties defendant, as having, some lien or claim to the mortgaged premises.
The prayer is for the usual relief in such cases. The defendant Simon denies having executed the note or mortgage, and denies receiving the sum claimed of $700.
There are some other denials of Simon, which are included in the separate answer of M. D. Wells, appellant herein, and will be referred to in connection with the defense- and claim of said Wells & Co.
M. D. Wells & Co., denying the claim of appellee, assert that they have a paramount claim to this mortgaged property, superior to the mortgagee.
They allege that James M. Ashton was the attorney in fact of the mortgagee, and was at the time the attorney of Simon, and wifo, and that he conspired with said Simon to hinder and delay the creditors of Simon by the making of said mortgage, and particularly to hinder and delay ’this indebtedness due M. D. Wells & Co., as creditors, which claim, was then in the hands of James M. Ashton, as the attorney of said Wells &Co.; all of which the mortgagee well knew.
The above are the material questions upon which the case was tried below and presented here. They further say they have a judgment, and by reason of the above facts said *537mortgage is fraudulent, and such judgment is superior, etc. The reply denies all the material facts.
The court below found for appellee and gave a decree foreclosing the mortgage as prayed.
That the attorney of Mrs. McMahon, the mortgagee, was James M. Ashton, and that he had at various times acted as attorney for Simon; that through him the latter negotiated the mortgage in controversy and got the amount claimed;, and also that he received the claim of Wells & Co., about the time of closing negotiations with Simon, and very soon turned the claim over to another attorney, and completed the negotiations for Simon and Mrs. McMahon, are not seriously disputed.
The evidence of Simon is that Ashton had him sign the mortgage without reading, on the statement that there would thus be less for his other creditors; and Mrs. Simon says that Ashton told her the $900 mortgage of Simon insured him, Simon.
The evidence of Simon is much weakened by his evident animus and purpose to injure Ashton, apparently because of the latter having compelled him to pay $200 to Cohn, Mickelsburg & Co.
Simon’s testimony is also weakened by the apparent effort to prove he did not execute the mortgage or understand it, which the other evidence clearly refutes; and further, by the attempt on his part to take advantage of a mistake made by the bank in connection with the $200.
These and other facts lead us to place very little reliance on the testimony of defendant Simon, and this is evidently the view of the court below, from the findings. It is in evidence that during a period of several days negotiations were pending between Ashton, attorney, and Simon, for the loan; and that Simon, calling at the other’s office, closed the negotiations at or about the very time the attorney is informed that Wells & Co. had sent him an account against Simon for collection.
There Í3 no evidence that Wells & Co. had been clients of Ashton; on the contrary, their letters show that they sent him this claim through a directory reference.
*538The evidence is clear that Ashton had the claim of Cohn, Mickelsburg & Co. against Simon for some time, and at this time; and also that he had entered into negotiations with Simon to make the loan for Mrs. McMahon, and also to secure the claim of Cahn, Mckelsburg & Co., and that this was some time before he had or knew of the Wells & Co. claim. If this is so, his first duty was to those parties for whom he was acting at the time of the receipt of the Wells & Co. claim; and to the latter he owed a duty secondary to these.
To have secured the claim of Wells & Co. by attachment or otherwise would have been a breach of his duty to McMahon and Cahn, Mckelsburg & Co. To have put them in with the other in the mortgage (which he might not have have been able to do) would have largely reduced the amount realized by his older clients. The position was full of embarrassment; he might have returned the claim to Wells & Co. with perfect propriety, but he turned it over to another local attorney, and thus saved appellants at least two weeks of time, which (whether of any value or not in this ease) is at least to be considered when the good faith of the attorney is being considered. Ashton admits that he thought the man “slippery,” “not very solvent,” and that he knewfrom Simon that other creditors were pressing him, and if he did not get in early he might lose Cohn, Mickelsburg & Co.’s debt.
This is not sufficient to sustain a charge of fraud upon the other creditors. In cases of this kind, even if the debtor was in failing circumstances, “ the race is to the swift,” and the attorney of Cohn, Mickelsburg & Co. had the right to secure them or his personal claim (which latter is, however, too small to have much weight); and he had the further right to care for the interests of Mrs. McMahon, and conclude alone in her interest on negotiations previously begun, provided those things were done in good faith and not in fraud, or not mainly for the purpose of enabling him to cheat his creditors.
It is an elementary rule that fraud is never presumed; in *539fact, the contrary is the truth. The circumstances of this case must be such as to produce a moral certainty of guilt, or the findings below must stand; that is to say, that the attorney’s main object was to aid Simon in a fraud upon his creditors; and must exclude entirely the idea of his having acted properly and in the interests of his older clients. The court below did not consider that Wells & Co. had made such a case as these rules require; nor do I. I cannot agree with the majority of my brothers.
The judgment below should be affirmed.