Opinion
June 2, 1898.
PRESENT: Matteson, C.J., Stiness and Tillinghast, JJ.
The giving of a mortgage for a much larger sum of money than is advanced by the mortgagee, the latter giving to the mortgagor a receipt for the balance, is an evident attempt to hinder, delay, and defraud the creditors of the mortgagor. Both of the parties to such a transaction must be held to have participated in the fraudulent intent. If such a mortgage be assigned to a corporation whose general manager has full knowledge of the transaction, the corporation takes the assignment with notice.
PETITION IN INSOLVENCY. Heard on applications for payment of a mortgage, and of the costs of an attachment, from the assets held by the assignee.
Dexter B. Potter, for mortgagor.
Thomas F.I. McDonnell, for assignee.
The testimony shows that the mortgage, the validity of which is contested, was given for $2,000; that only $50 was paid by the mortgagees, Jasper G. Hyde Co., to the mortgagor, and that they give to him a receipt for the remainder, $1,550; so that the mortgage, though nominally for $2,000, was really for $450. Such a transaction was evidently intended to hinder, delay and defraud the creditors of the mortgagor. It was a transaction fully known to both parties, and therefore both must be held to have participated in the fraudulent intent. The subsequent assignment to the People's Loan and Trust Company is of no consequence, because it appears that it was substantially the incorporation of Jasper G. Hyde Co., to which the property of the firm was transferred, and, so far as appears, without consideration. In any event, the transaction was fully known to the general manager of the corporation, and the corporation therefore took the assignment with notice. The petition for an order on the assignee to pay the money in his hands to the People's Loan and Trust Company, on account of the mortgage, is denied.
The costs on the attachment in the suit of Kellogg, McDougall have already been allowed and ordered to be paid.