O'Neil v. Chandler

42 Ind. 471

• Court: Indiana Supreme Court
• Decided: May 15, 1873
• Status: Published

Opinions

Osborn, C. J.

This was an action on a note executed by the appellee to Elizabeth Chandler, and by her endorsed to the appellant, for one thousand four hundred and seventeen dollars and ninety cents.

The only error assigned is in overruling a demurrer to one paragraph of the answer.

The paragraph demurred to states, that prior to the execution of the note, William Chandler became insolvent and incurred large liabilities to different parties, on which judgments had been rendered to the amount of about eighteen thousand dollars; that, wishing to conceal some of his assets from his creditors and keep the same from being levied upon, he placed them in the hands of the appellee and informed his creditors that they belonged to him and were not subject to execution on the judgments ; that the defendant took the property and started business in his own name, William managing the business, but claiming to the public that he was acting as clerk for defendant; that three thousand dollars profits accrued from the business, which was used to increase the business; that the note sued on was given to William “ for the stock or capital thus invested in said business but at the request and direction of William, it was taken in the name of Elizabeth Chandler, wife of William; that she never exercised any control over it, arid traded it to the plaintiff for goods, after notice of the facts alleged; that she had nothing whatever to do with the transaction; that no part of the consideration of the note came from her, nor was she consulted about the transaction. It is also averred that the whole of the business arrangements between the defendant and William, was in pursuance of a fraudulent combination on the part of William for the purpose of defrauding his creditors, and that the property has always remained in his possession.

The ruling of the court was undoubtedly based upon Welby v. Armstrong, 21 Ind. 489. That case was overruled by Springer v. Drosch, 32 Ind. 486, which we adhere to. It is decisive of this.

The judgment of the said Cass Common Pleas is reversed, with costs. Cause remanded, with instructions to the court below to sustain the demurrer to the said paragraph of the answer to the complaint, and for further proceedings.