Fidelity Banking & Trust Co. v. Kangara Valley Tea Co.
Fidelity Banking & Trust Co. v. Kangara Valley Tea Co.
Opinion of the Court
Thei’e was no error in this action of the court. These plaintiffs were the movants in the litigation from its very beginning, and this fact, of itself, would ordinarily entitle them to open and conclude. But it further appears that at the trial they assumed the burden of proof, and, as the result show's, carried it successfully. So on the whole there can hardly be a doubt that they were entitled to open and conclude. The case of Boykin, Seddon & Co. et al. v. Epstein et al., 94 Ga. 750, may be cited as pertinent in this connection.
“A debtor may prefer one creditor to another, and to that end, he may bona fide give a lien by mortgage, or other legal means, or he may transfer negotiable papers as collateral security, the surplus in such cases not being reserved for his own benefit. If a surplus is reserved*174 for-his own benefit, it destroys the validity of the mortgage so given.
“If you believe from the evidence that the mortgage in question was executed by A. M. Bergstrom, one of the members of the firm of Dawson, Bergstrom & Co., to the Fidelity Banking & Trust Company, and was intended to delay or defraud creditors, and such intention was known to said banking and trust company, then such mortgage would be void, and it would be your duty to find that it be set aside. If you believe from the evidence that the mortgage in question was executed by A- M. Bergstrom, a member of the firm of Dawson, Bergstrom & Co., and was partly intended to delay or defraud creditors, and partly with the intent to secui’e a debt, and the Fidelity Banking and Trust Company had knowledge of the intention to defraud creditors, or had grounds for a reasonable suspicion that such intent existed, said mortgage would be void, and you should find against it accordingly.
“Every conveyance of real or personal property, or estate, by writing or otherwise, and every bond, suit, judgment, execution or contract of any description, had or made with the intention to delay or defraud creditors, and such intention known to the party taking, is considered in law as fraudulent against creditors, and as to them null and void.
“But if you believe from the evidence that the giving of the mortgage and the conveyance of. the real estate were parts of the same agreement, and that there was an intention known to both parties, Bergstrom and the bank officials, to delay or defraud creditors . by saving property for Bergstrom from his creditors, the whole transaction would be avoided thereby as against creditors, and this mortgage which is now involved would accordingly be avoided as a part of the transaction. If this mortgage was executed by A. M. Bergstrom, a mem*175 ber of the firm of Dawson, Bergstrom & Co., to the Fidelity Banking & Trust Company, for the purpose of securing the banking company as a creditor, and as a part of the same agreement an agreement was made by which certain other property was to be conveyed by Bergstrom to the bank, which the bank agreed to hold for said Bergstrom, and save from his creditors, and eventually return to him in whole or in part, and that there was an intention on the part of Bergstrom to delay or defraud his creditors, of which intention the bank had notice or grounds for reasonable suspicion, in such event the mortgage would be void as against other creditors, and you would find against it accordingly.”
Error was assigned upon these charges, on various grounds. One was, that there was no contention on the part of the plaintiffs that any surplus was reserved in the mortgage itself, and there was no issue in the case based on the ground that any such reservation was made in the mortgage. Another was, that certain portions of the charges complained of were not authorized by the evidence; and as to the last above quoted charge, it was insisted that it was erroneous because it excluded from the minds.of the jury any view of an alleged original agreement.on the part of the firm to secure their indebtedness to the banking company whenever security should be demanded, and’because “if transactions which are partly valid and partly fraudulent are clearly severable (if any were fraudulent), a court of equity will separate the two. arid 'give force to that which is valid.”
There may be some expressions in the charges complained of, not strictly applicable; but when considered with reference to all the facts of thé case, they were, in the main, pertinent and substantially correct. The mortgage itself did not, of course, contain any reservation, for the benefit of the mortgagors, and it is' true that the plaintiffs did not so contend. They did contend, how
The banking company, among other things, contended that before any credit was extended by it to the firm of Dawson, Bergstrom & Co., an oral agreement was made by the firm, in which all the members participated, that security by mortgage would be given whenever demanded, and that accordingly, although at the time the mortgage was actually given it may have been done against the protest and over the objection of one of the members, the mortgage would nevertheless be binding upon the firm, because of the above mentioned original agreement made by the firm as an inducement to the banking company to extend credit in the first instance. The court was requested to charge to this effect, and also to. charge generally, without qualification, that one partner may, notwithstanding the protest of another, mortgage the firm’s assets, consisting of personal property, to secure a valid existing debt of the firm. This latter request was, we think, properly refused. It will be readily perceived it cannot be good law, because it
There was evidence introduced in behalf of the banking company, strongly tending to show that there was a previous agreement to give security whenever demanded, made with the consent of all the members of the firm; and in this connection the court instructed the jury, in effect, that if this were so, a mortgage subsequently
Other assignments of error in the motion for a new trial alleged that the verdict was contrary to certain specified portions of the judge’s charge. This is only another way of alleging that the verdict was contrary to law, and does not, therefore, require special comment.
After a careful review of the whole case, we find that the issues involved were fairly submitted to the jury, and that the verdict was fully warranted by the evidence. No reason for interfering with the discretion of the trial judge in refusing to grant a new trial appears.
Judgment affirmed. Cross-bill of exceptions dismissed.
Reference
- Full Case Name
- The Fidelity Banking and Trust Company v. The Kangara Valley Tea Company, and vice versa
- Status
- Published