Reagan v. Aiken - 138 U.S. 109 (1891)
U.S. Supreme Court
Reagan v. Aiken, 138 U.S. 109 (1891)
Reagan v. Aiken
Submitted January 12, 1891
Decided January 26, 1891
138 U.S. 109
A debtor in Texas mortgaged to a creditor real estate there to secure the payment of debts to various creditors, and on the same day by a separate instrument to the same mortgagee personal property for the same object. Other creditors commenced suit in the circuit court of the United States against the debtor and caused the property covered by the chattel mortgage to be seized under writs of attachment, and to be sold and the proceeds applied toward payment of their claims in suit. The grantees in the chattel mortgage sued the marshal and his official sureties at law in the state court to recover the value of the goods seized and sold. This action was removed into the circuit court, where the creditors then filed a bill in equity to restrain the further prosecution of the action at law. A temporary injunction was issued. The mortgaged real estate was then sold, and the proceeds applied to the payment of the debts secured thereby, leaving a balance still due. After dismissing the injunction suit, the action at law came on for trial. A motion by the defendant to transfer it to the equity docket was refused. The defendant contended that the chattel mortgage was, under the laws of Texas, an assignment for the benefit of creditors and not a chattel mortgage. The court instructed the jury that the validity of the instrument as a mortgage depended upon whether, when it was made, the maker was solvent or insolvent. One of the counsel for the plaintiffs, who was also a creditor, testified that he was present at the execution of the chattel mortgage, at which were also present the mortgagor and certain other creditors for whose security the mortgage was executed, and stated what took place then. His evidence was not objected to by the creditors whose counsel he was. There was a verdict against the marshal and his sureties.
(1) There was no error in refusing to transfer the action at law to the equity docket.
(2) That the instrument in question was not, under the local law of Texas, an assignment for the benefit of creditors, but a chattel mortgage.
(3) That the verdict of the jury determined the solvency of the grantor and the validity of the instrument.
(4) That it was no error to permit the counsel to testify, as his clients did not object.
It is too late on a motion for a new trial to tender exceptions to the charge and when the record does not contain the full charge, and no exceptions to such part as it does contain, the court must be assumed to have stated the law correctly.
On December 23, 1885, J. M. Anderson and T. W. Anderson, Jr., executed a mortgage on certain real estate in Texas to one W. J. McDonald to secure the payment of certain debts of the mortgagors. On the same day, J. M. Anderson mortgaged to said McDonald and W. B. Aiken and L. C. Stiles certain personal property as security for the payment of the same debts. On December 28, Carter Bros. & Co., of Louisville, Kentucky, H. T. Simon, Gregory & Co., and J. H. Wear, Boogher & Co., of St. Louis, commenced in the Circuit Court of the United States for the Eastern District of Texas certain actions against J. M. Anderson, and caused writs of attachment to be issued and levied upon the personal property covered by the chattel mortgage above mentioned. The goods thus attached were sold by the marshal, and the proceeds applied in satisfaction of the claims in suit. On the 29th of March, 1886, the grantees in the chattel mortgage commenced a suit in the state court against the United States marshal and the sureties on his official bond, alleging the seizure and sale under the writs and seeking to recover the value of the goods thus seized and sold. This action, commenced in the state court, was removed by appropriate proceedings to the United States Circuit Court for the Eastern District of Texas. On February 3, 1887, the attaching creditors filed their bill in the same circuit court for an injunction to restrain the further prosecution of the action at law, the one commenced in the state and removed to the federal court. This bill was based on the proposition that the creditors of Anderson were secured by both the real estate and chattel mortgage, while the attaching creditors had only recourse on the property covered by the chattel mortgage, and that therefore the creditors thus doubly secured by the real estate and chattel mortgage should exhaust the security given by the former before making any claim to the property secured by the latter. The temporary injunction was issued as prayed for. The property secured by
the real estate mortgage was sold, and the proceeds applied as directed therein, but such appropriation of proceeds did not pay the debts in full, and left a balance due the creditors therein named secured only by the chattel mortgage. Thereafter, on September 26, 1887, by stipulation of counsel, the injunction bill was dismissed and the action at law transferred from the state to the federal court was continued to the next term, with a proviso as to the use of the testimony already taken in the injunction suit, and also that the dismissal should be without prejudice to the right of the defendants in the law action to move for its transfer from the law to the equity docket. At the February term, 1888, the law action came on for trial; an application was made to transfer it to the equity docket, which was denied, and the case went to trial and resulted in a verdict and judgment against the marshal and his sureties for an amount equal to the sums due to the various creditors secured by the real estate and chattel mortgages and unsatisfied by the proceeds of the sale of the real estate. To reverse such judgment, a writ of error has been brought to this Court.