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FIRST STATE BANK OF MONTGOMERY v. JOSEPH J. SCHATZ

Minnesota Supreme Court1908-06-26No. Nos. 15,594, 15,595—(147, 148.)
104 Minn. 425

Summary

Holding. The trial court correctly denied the debtor's motion to dissolve the attachment because evidence reasonably supported the finding of fraudulent intent, and the court properly struck the answer as failing to tender a bona fide issue of fact since the alleged consideration for the extension was legally insufficient. Both orders were affirmed.

A bank sued to collect on two promissory notes and obtained a writ of attachment after claiming the debtor intended to fraudulently dispose of his property. The debtor moved to dissolve the attachment. The trial court heard conflicting affidavits from both sides regarding the debtor's intent but denied the motion. Because the affidavits contained factual disputes and evidence supported the trial court's determination, the appellate court found no error in denying the dissolution motion.

The debtor's answer claimed the bank had agreed to extend the notes' payment deadline in exchange for continued interest payments plus other unspecified consideration. The bank moved to strike the answer as sham and frivolous. The debtor's supporting affidavit failed to identify any valid consideration beyond what he was already legally obligated to pay. The court determined the answer did not raise a genuine factual dispute suitable for trial and properly struck it.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether conflicting affidavits regarding debtor's fraudulent intent justified attachment
  • Whether promise to extend payment of past-due notes has valid consideration
  • Whether reiteration of an already-binding obligation constitutes sufficient consideration

Procedural posture

The debtor appealed the trial court's denial of his motion to dissolve the attachment and the striking of his answer.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

START, C. J.

This action was commenced in the district court of the county of Le Sueur to recover the amount due on two promissory notes made by the defendant to the plaintiff. A writ of attachment was issued, on the ground that the defendant was about to assign and dispose of his property with intent to defraud his creditors, and by virtue thereof his property was attached. He then moved the court to dissolve the attachment, and upon a hearing of the matter the court made its order denying the motion-, from which the-defendant appealed.

The affidavits in support of the motion tended to show that the defendant did not intend to dispose of his property to defraud his creditors, while the affidavits on behalfof the plaintiff, in opposition, tended to show facts and circumstances indicating an intention on the part of the defendant to place his property beyond the reach of his creditors. An examination of the affidavits shows that they are, in important particulars, conflicting, and we are of the opinion that this case falls within the rule that the determination of a question of fact by the trial court on the hearing of a motion, on affidavits or otherwise, will not be reversed if there be evidence reasonably tending to support it. First Nat. Bank of Winona v. Randall, 38 Minn. 382, 37 N. W. 799; Finance Co. of Pa. v. Hursey, 60 Minn. 17, 61 N. W. 672. The court did not err in denying the motion to dissolve the attachment.

The answer herein admitted the execution of the notes, and, in effect, alleged: That the plaintiff entered into an agreement in reference to said notes that in consideration of the payment of the rate of interest specified in said notes the plaintiff would extend the same and permit the same-to run until such time as defendant could pay the same out of his business. The plaintiff moved the court to strike out the answer as sham and frivolous.

In support of the motion,- affidavits were submitted showing that the .plaintiff never made any agreement for the extension of the notes. The motion was opposed by the affidavits of the defendant and his father. If it clearly appears, from,the answer arid the affidavits considered by the court on the hearing of the motion, that no bona fide issue of fact was tendered by the answer, the order of the court was ■correct; otherwise not, for, if such an issue was tendered, it could not be tried on affidavits. If the defendant had agreed to forego the payment of the principal of the notes for a definite future time, and keep the money for that time, and pay the interest thereon, it would have been a sufficient consideration for the plaintiffs promise to expend the payment of the notes to such time. Simpson v. Evans, 44 Minn. 419, 46 N. W. 908; Trudeau v. Germann, 101 Minn. 387, 112 N. W. 281.

No such agreement is alleged in the answer or claimed by the defendant in his affidavit, which, in their last analysis, show that the only agreement was for the extension of the payment of the notes, which were then past due, until such indefinite time as the defendant could pay them out of his business, and, further, that there was no consideration for such alleged extension. True, the answer says it was in consideration of the payment of the rate of interest specified in the notes and “other valuable and sufficient consideration”; but the defendant’s affidavit fails to disclose the other consideration. The defendant was already legally bound to pay the specified rate of interest until the notes were paid, and reiterating the promise was not a consideration, for the reason that a promise to do that which a party is legally bound to do is not, under ordinary circumstances, a consideration for a promise. King v. Duluth, M. & N. Ry. Co., 61 Minn. 482, 63 N. W. 1105.

Again, eliminating the allegations of conclusions of law in the answer, it does not show that the defendant at the time this action was commenced could not pay the notes out of his business. Upon the whole record, we are of the opinion that the answer did not tender any bona fide issue of fact, and that the order of the court striking it out was right.

Order on each appeal affirmed, with one bill of costs.