Van Raalte v. Harrington

Citation101 Mo. 602,14 S.W. 710
PartiesVAN RAALTE v. HARRINGTON.
Decision Date17 November 1890
CourtUnited States State Supreme Court of Missouri

2. V. was a pawnbroker and dealer in jewelry, and, to a limited extent, in other merchandise. L. was a merchant in the same city. L. offered to sell his entire stock to V., saying he was old, and wanted to quit business. V. examined the stock, and an invoice was taken, and a sale made, for $7,213, 65 per cent. of the cost, which was paid in cash. L. paid from the proceeds of the sale $7,300 to his sons. He applied $200 on other debts. L. and his sons testified that he owed them those amounts. A few days before the sale, to secure a debt of $2,000 to his son-in-law, L. turned over to him goods to the amount of $3,000. These transactions left L. without property, and owing some $10,000 for goods bought on time. V. made inquiry of L. as to his title, and of his wife whether she had any interest, but no inquiry was made as to L.'s indebtedness. Held, evidence from which a jury would be justified in finding that L. intended to defraud his creditors.

3. The evidence was sufficient to go to the jury on the question of V.'s knowledge of the fraud.

Appeal from St. Louis circuit court; SHEPARD BARCLAY, Judge.

Jas. A. Robertson, Alex. Martin, and Jos. Laurie, for appellant. Lee & Ellis, David Goldsmith, and Albert Arnstein, for respondent.

BLACK, J.

This is a controversy over a stock of merchandise consisting of dry goods, notions, clothing, hats and caps, and boots and shoes. Adolph Lederer, being the owner and in possession of the goods, sold the same to Samuel Van Raalte, who took immediate possession. Thereupon the defendant, as sheriff of St. Louis, levied upon the property by virtue of several writs of attachment sued out by the mercantile creditors of Lederer. Van Raalte then commenced this action of replevin, gave bond, and reacquired possession. The sheriff defends on the ground that the sale was one made in fraud of creditors, and that plaintiff purchased with full knowledge of the intended fraud. Plaintiff was a pawnbroker and dealer in jewelry, and, to a limited extent, in other merchandise, at Fourth street, in the city of St. Louis. He had associated with him his step-father, Julius Van Raalte, as a partner in the profits of the business. Lederer carried on a mercantile business at Chouteau avenue in the same place. The evidence of plaintiff and of Julius Van Raalte is that Lederer came to their store, and proposed to sell his entire stock of goods, saying he was old, feeble, and not capable of transacting business; that he wanted to sell out, straighten up his affairs, and quit business. Julius Van Raalte examined the goods, and made a report to the plaintiff, and the parties then commenced taking an invoice. All this occurred on the 2d October, 1886. The invoice, which amounted to something over $11,000, at cost prices, was completed on the 6th of the same month. Lederer then offered to take 75 cents on the dollar, and Julius Van Raalte offered 65, and the trade was closed at the last-named price. The parties then went to the Fourth-Street store, where plaintiff paid $7,213, for the goods in cash over the counter, and Lederer gave to plaintiff full and complete possession of the property. Subsequently, Lederer paid, from the proceeds arising from the sale, a note due at bank for $500, on which his son-in-law was surety. He paid to his son Emil, a young man 28 years of age, $4,800, and to his other son Samuel, 22 years old, $1,500. He applied about $200 in payment of other debts. The evidence of the Lederers is that the father owed the sons the above-named amounts for services, and for moneys advanced. A few days before the sale to plaintiff, Lederer turned over to a son-in-law goods costing $3,000 to secure a debt of $2,000. These goods were placed in an auctionhouse, and were subsequently sold to pay that debt. The above transactions left Lederer without property, and owing the attaching creditors some $10,000 for goods purchased on time for the fall trade, the bills not being due at the date of the sale to plaintiff. Plaintiff says he had contemplated extending his business, so that the purchase was in line with a previously formed design. A few days after he opened the Chouteau-Avenue store, he removed goods invoiced at $1,463 to the Fourth-Street store, and sold the remainder of the new purchases at auction. The goods thus sold realized something in excess of the price paid therefor. The change in the plaintiff's design to extend his business is accounted for on the ground of his ill health. When the trade was consummated, plaintiff called in his attorney, who prepared, and Lederer signed and acknowledged, a bill of sale. Inquiries were then made of Lederer as to his title to the goods, and of his wife, whether she had any interest therein; but no inquiries were made as to the extent of the vendor's indebtedness. Plaintiff says he did not know that his vendor was indebted to the attaching creditors or to any other person. The Chouteau-Avenue store was kept open while the parties were taking the invoice, and goods which arrived during that time were not included therein. There is some evidence to the effect that goods were shipped from the store during that time, and there is much evidence to a contrary effect. Lederer held a lease upon his store premises, and he and his son appear to have been designated as lessees. This lease was transferred to the plaintiff, who leased the second story of the building to Lederer, where the latter, his wife and two sons, continued to reside before the sale to plaintiff. Some time previous to this sale, one of the sons of Lederer had worked for the plaintiff at his Fourth-Street store. There are some other circumstances in evidence which we deem it unnecessary to recite.

1. The point urged with so much confidence by the plaintiff, who is the appellant, that there is no evidence tending to show that Lederer intended to defraud his creditors, cannot be sustained. Lederer, it is true, had a right to prefer some creditors to others, and the fact that his sons were made the preferred creditors does not, of itself, furnish evidence of fraud; but the relationship is a fact to be considered with the other circumstances. Sons and sons-in-law figure at every turn of the evidence. The great effort on the part of the vendor seems to have been to get enough out of his property to pay off these favored persons, and there is some ground for making the deduction that the late purchases made by Lederer on time were made with a fixed purpose of never paying for the goods so purchased. In our opinion there is evidence of an intended fraud on the part of Lederer.

2. Nor do we agree to the proposition that there is no evidence tending to show notice to plaintiff of the intended fraud. It may be inferred from the...

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