The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921. Page: 36
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272 FEDERAL REPORTER
Was there any evidence tending to show that the transfer of the
title of the property described in the three mortgages in suit was with
the intent to delay or defraud the creditors of the mortgagor? The
mortgages covered all the property of Crites, the mortgagor, and
there was evidence tending to show that he was insolvent at that time
and that the officers of the bank, the mortgagee, knew that fact.
J. R. Crites, the mortgagor, testified that he was in the automobile
business at Havre, Mont., in 1917; that-
"along in September that year the business was showing up pretty poor, not
very good; outside of the bank I had creditors who wanted their money
coming in every day, almost every day, some salesman or some collector ;
I stalled them off, couldn't pay them; I didn't have any money; the bank had
quit financing the business; they wouldn't give me any money; they said they
didn't have any money; wouldn't give me any money; I had all the money
I was going to get on that deal; they wouldn't furnish me any money; not
during the audit, they wouldn't furnish me any money. After the audit was
over, I told them at the bank that my creditors were bothering me, that I
would have to do something about it, and they said, 'Stall them along the
best I could.' That was before I signed any mortgages. And I stalled them
as much as I could stall them.
"As to how I came to sign this note and mortgage for $22,825 on or about
the 11th day of October, 1917, they said they would have to have the mortgage
fixed up and we would sign it. I went there. * * * I signed the mortgage
in the bank. * * * I was there and Blair [the president of the bank] was
there, and Mr. McBrayne [the cashier of the bank], was there. I told them
that other creditors would jump in and raise a fuss about that; they wanted
their money. 'Well,' he says, 'they can't get everything; we have this mort-
gage; I would like to see them get anything, when we have the mortgage here.'
I didn't like to sign the mortgage, because it was too strong, and that is why
I got a second agreement, that I wouldn't be kicked out of there in the next
day or so; that's all. * * * At the time I executed that mortgage my
purpose was to get along until the first of the year, and then pay these bills
up, and not have anybody jump on me and put me out of business before the
first of the year; and, as I understand it, that was the idea of having me
give a mortgage, and after the first of the year the understanding was they
would pay it upj; they would have more money to pay these claims, or satisfy
them in some way, satisfy these creditors. My purpose at that time in giving
this mortgage was certainly to hinder the balance of my creditors from jump-
ing in. I didn't want to pay anything then. Upon that occasion Mr. Blair
said, if anybody came in and wanted to attach the property, they would have
to pay that mortgage off first, and then, he said, we would go across the
street and start another garage."
J. J. Blair, the president of the defendant bank, testified:
"I did have a conversation with Mr. Cites relative to what other creditors
he owed, at the time we were considering renewal of the mortgage in October,
and he stated that all he wanted was a chance; that he had some other small
creditors, but he had made arrangements with them to pay them so much a
month, and if we could carry him over he would have no trouble with them;
and I made the arrangement with Mr. Crites for the giving of the $22,825
note and the three chattel mortgages given to secure that note. During those
negotiations Mr. Crites did not at any time give me a list of his creditors, nor
did he ever tell me that they were threatening to sue him, any of them. I did
not know at that time, or prior to that time, that any of his creditors were
threatening to bring legal proceedings; as a matter of fact, he said they were
not. I absolutely did not tell him that if he would give me these mortgages
I would advance him some money about the first of the year to take up his
other debts. I did not tell him that if I got these chattel mortgages I would
like to see any other creditor get anything, or words to that effect."
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The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921., legislative document, 1921; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38843/m1/58/: accessed February 17, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.