Opinion
09-29-1886
TAYLOR v. WOOD and others.
W. D. Holt, for complainant. Howell & Bro., for defendant, Mrs. Wood.
On bill to set aside chattel mortgage.
W. D. Holt, for complainant.
Howell & Bro., for defendant, Mrs. Wood.
BIRD, V. C. This is a suit by a creditor. His insistment is that a chattel mortgage, prior in date and of record, is fraudulent. He says the fraud consists in Mrs. Wood taking her mortgage for more than was really due her, and also for the purpose of hindering and delaying the other creditors of Franklin J. Wood, the debtor.
First, as to the consideration. The debtor, Franklin J. Wood, is a son of Sarah A Wood, one of the defendants, and the holder of the mortgage complained of. The son and mother met in the office of a highly respectable counsel, and asked to have the mortgage drawn. When asked for what amount, it appeared to be quite uncertain what the real amount due was. After being told that Mrs. Wood would be obliged to swear to the amount, and after consultation between Mrs. Wood and her son, they agreed that the amount due was $900. The mortgage was drawn accordingly. There were no accounts or notes or other memoranda kept by the mother to show the extent of the son's obligations. But C. N. Taylorwas sworn. He had held some money for Mrs. Wood, and says that he paid her over $1,000 in the presence of Franklin, and understood that it was for Franklin, although it was not paid to Franklin by him, nor in his presence. He paid the money to the mother by check; but he says, when he paid her the last $300, he charged her against loaning Franklin any more, and said to her, in Franklin's presence, that he owed her $800 already, and that he never would be able to pay that. It does not appear that Franklin then denied owing his mother that sum. Franklin, however, does not deny owing his mother this sum, or anything like it. Thus, upon two very important occasions, the son was confronted with the charge of owing his mother,—once by C. N. Taylor of owing her over $800, and once by his mother, when she swore to the truth of the consideration expressed in the chattel mortgage, and when he was present, encouraging the act by signing such chattel mortgage, and conveying his goods. Clearly, as between him and his mother, he is effectually estopped and bound. But there is a charge that the mother has told another story besides the one she gave under oath, and that she, too, is effectually estopped and bound as to creditors. The day the mortgage was made she said to a witness that she wanted him to draw a receipt for her to sign for $350 against the mortgage, so that, in case of her death, his sisters could not make him pay the whole amount, because that was more than he owed her. The next day the receipt was drawn, and signed by Mrs. Wood for Franklin; and in her answer she only claims $550 as due on the mortgages. And this evidence is very clearly supported by the wife of Franklin, to whom Mrs. Wood stated that the mortgage was taken for more than was due. This statement she made to Franklin's wife the same day the mortgage was made, and very soon after. This testimony forbids any doubt but that the mortgage was made for $350 more than the mother considered really due from her son. He may have had the money, but the mother lived with the son a good deal of the time, and, no doubt, upon a strict accounting, the charges would not all have been on one side.
Second, as to the actual intention upon the part of the mother and son to hinder and delay the creditors of Franklin. She told her friend, who drew the receipt, that she did not want any one to come in and take Frank's goods away from him. She said it was "to keep his creditors from selling him out." Franklin's wife says that, right after Mrs. Wood had the mortgage made, "she said that she got the chattel mortgage drawn up for $900. She said she knew it was more than Frank owed her, but she thought it would keep his creditors off. She said $900 would cover his stock and farming utensils, and, if his creditors came to sell him out, her chattel mortgage claim would come in ahead." There is nothing in the case to impeach or qualify the character of these witnesses for truth. Therefore I must conclude that the mortgage was not taken bona fide, and is fraudulent as to creditors. Sayre v. Fredericks, 16 N. J. Eq. 205; Demarest v. Terhune, 18 N. J. Eq. 532; De Wilt v. Van Sickle, 29 N. J. Eq. 209; Schmidt v. Opie, 33 N. J. Eq. 138; Holt v. Creamer, 34 N. J. Eq. 181; Bump, Fraud. Con v. 230.
It is said that the complainant is not honestly prosecuting his claim, but is pursuing Mrs. W. only to aid Franklin. There is nothing in the testimony to justify this insistment. It is true, the son became very willing (or at least it appears so) to aid the complainant, but that does not justify the charge of a conspiracy or understanding that the litigation should be carried on for the benefit of the son.
I will advise a decree giving the mortgage of the complainant priority over that of Mrs. Wood. The complainant is entitled, also, to his costs.