Studebaker Bros. Manufacturing v. Zollars

81 N.W. 292, 12 S.D. 296, 1899 S.D. LEXIS 116
CourtSouth Dakota Supreme Court
DecidedDecember 20, 1899
StatusPublished
Cited by5 cases

This text of 81 N.W. 292 (Studebaker Bros. Manufacturing v. Zollars) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Studebaker Bros. Manufacturing v. Zollars, 81 N.W. 292, 12 S.D. 296, 1899 S.D. LEXIS 116 (S.D. 1899).

Opinion

Corson, P. J.

This action was brought by the plaintiff, who was a judgment creditor of Alemeth E. Overpeck and Areli L. Overpeck, co-partners doing business as Overpeck Bros., against Lafayette Zollars, as sheriff of Pennington county, and his sureties, to recover damages for the failure of said Zollars, as sheriff, to levy certain executions in favor of the said plaintiff and against the said Overpeck Brothers upon their personal [300]*300property. The sheriff justified his refusal in levying the said executions by alleging, in substance, that the personal property upon which he was directed to levy had been previously mortgaged for a valuable consideration by the said Overpeck Brothers to one Hollis J. Tyler, of the county of Ontario, in the state of New York. A trial was had before the circuit judge and a jury. A verdict and a judgment were rendered in favor of the plaintiff for $6,682,39, together with costs and disbursements, from wkich judgment and order denying a motion for a new trial the defendants appeal to this court.

On the trial the defendants introduced evidence tending to show that Hollis J. Tyler had at various times during several years prior to 1887 advanced to Overpeck Bros., as loans, sums amounting to about $8,000, and that in November, 1893, there was due to Tyler from Overpeck Bros., on account of said loans about the last-mentioned sum, and that to secure said amount the Overpeck Brothers executed and delivered, on the last-mentioned date, to said Tyler, a chattel mortgage upon all the personal property upon which said Zollars was directed by the plaintiff to levy its execution; that said chattel mortgage was duly filed for record, and was a valid, subsisting, and unsatisfied mortgage at the time he, said Zollars, was directed to levy upon the said property. The learned court, in its charge to the jury, gave the following instruction: “The only remaining question is this: Was the mortgage executed by Overpeck Bros, to their father-in-law, Tyler, a valid mortgage at the time of the levy of the execution in the case of the Studebaker Bros. Manufacturing Company against Overpeck Bros. ? And likewise you shall find whether or not it was a valid and subsisting mortgage at the date of refusal of the sheriff to levy upon [301]*301the second execution, there being two judgments in favor of the Sfcudebaker Bros. Manufacturing Company and against Overpeck Bros. The plaintiff relies upon circumstances tending to show the fact, or possible fact, that .the mortgage given by the Overpeck Brothers to their father-in-law, Tyler, was not given for a valid and subsisting obligation. I instruct you that upon this you are the sole judges of all the facts before you as to whether or not, as a valid and subsisting debt, it existed at the time of the execution of the Overpeck Brothers’ mortgage to Tyler. If said debt existed, they had the right to prefer their father-in-law, or any other creditor, to all other creditors they may have had, if they so desired. If they owed their father-in-law $8,000 at the date of the execution of the mortgage, it is good as against the world and as against this plaintiff. This is the question: Was the mortgage given for a bona fide, good-faith indebtedness, or in fraud of other creditors? If you find it was given in fraud, it 'is invalid, and must be so determined in this action. If you find that it was given in good faith, it was a first lien upon this property; and the sheriff had not only the right, but it was bis duty, to decline to proceed under the levy, and your verdict will be for the defendants.” It is contended by the appellants that this instruction is misleading and erroneous, in that it, in effect, permits and directs the jury to find the mortgage invalid if given by the mortgagors with fraudulent intent, although such intent was not participated in or known to the mortgagee. We cannot agree with appellants in their contention. The learned circuit court very properly stated to the jury the question to be determined by them as follows: “If said debt existed, they had the right to prefer their father-in-law, -or any other creditor, to [302]*302all other creditors they may have had, if they so desired. If they owed their father-in-law §8,000 at the date of the execution of the mortgage, it is good as against the world and as against this plaintiff. This is the question: Was the mortgage given for a bona fide, good-faith indebtedness, or in fraud of other creditors?” We think the jury must have understood from this instruction that the only question for 1hem to determino whs whether or not the mortgage was given for a bona fide indebtedness, and that, if it was so given, the mortgage was valid as against all the world. If it was not so given, then it was fraudulent, and in this view of the instruction the court correctly stated the law as applicable to this case. It is quite clear from the whole charge of the court that in using the language, “If you find that this was given in fraud, it is invalid, and must be so determined in this action,” it used the word “fraud” in the sense of a want of consideration for the mortgage, and we think the jury must have so understood it. This being so, the court was not required to add the qualification, suggested by counsel, that the mortgagee must participate in the fraud. If it is true, as claimed by respondent, that the mortgage was given without consideration, it was necessarily fraudulent as against the creditors of the Overpecks.

The court gave the following instruction, to which appellants excepted: “In this action, by reason of the peculiar situation of the facts in the case, the burden rests with the defendants to satisfy you of the validity and bona fides and good faith of the alleged mortgage of the Overpeck Brothers to their father-in-law, Tyler, Ordinarily, the burden of proof, as you gentlemen presumably understand, rests with the plaintiff, but, upon the contested issue in the case the burden rests with the [303]*303defendants.” We are of the opinion that the foregoing instruc tion, as applied to this case, was strictly correct. The burden of proof was upon the defendants to show that at the time the Overpeck Brothers executed the chattel mortgage to' Tyler it was executed for a good and valuable consideration, and, if the defendants succeeded in satisfying the jury that the chattel mortgage was so executed, then the verdict should have been for the defendants. If, on the other hand, the jury wore satisfied that the chattel mortgage was given by the Overpecks without consideration, then it was fraudulent and void as to the creditors, and the jury should have so found. If the appellants desired the court to limit or qualify this instruction, or to go further, and charge the jury that, in case defendants established these facts, the burden of proof would then shift to the plaintiff, they should have specially requested an explicit instruction to that effect; and by the failure to do so they waived the objection. Railroad Co. v. Spencer (Ill. Sup.) 36 N. E. 91; Koehler v. Wilson, 40 Iowa 183; McQuillan v. City of Seattle (Wash.) 43 Pac. 893.

The appellants also strenuously contend that the verdict is unsupported by the evidence.

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Bluebook (online)
81 N.W. 292, 12 S.D. 296, 1899 S.D. LEXIS 116, Counsel Stack Legal Research, https://law.counselstack.com/opinion/studebaker-bros-manufacturing-v-zollars-sd-1899.