Seger v. Thomas

• Decision Date: 22 December 1891
• Parties: SEGER et al. v. THOMAS et al.
• Court: Missouri Supreme Court

18 S.W. 33

107 Mo. 635

SEGER et al. v. THOMAS et al.

Supreme Court of Missouri, Division No. 2.

December 22, 1891.

FRAUDULENT CONVEYANCES — KNOWLEDGE OF GRANTEE — PREFERENCES — CONSIDERATION.

1. A transfer by an insolvent firm of its entire stock in trade to a creditor having knowledge of the insolvency, who gives a negotiable time note to cover the excess of the property over his debt, is void as to other creditors, under Rev. St. 1889, § 5170, invalidating sales "made or contrived with the intent to hinder, delay, or defraud creditors of their lawful actions." The parties will be held to have intended the natural effect of their act, which is to delay creditors.

2. A bill of sale by an insolvent firm of their stock in trade to a creditor, who gave in return a time note for the excess over his claim, provided that any sums which the purchaser might pay out of his own moneys on the obligations of the sellers should be credited on his note. Held, that such provision rendered the transfer void, as giving the purchaser the right to prefer other creditors to the extent of the surplus.

3. A part of the consideration for a transfer by an insolvent firm of its entire stock in trade to the father of the members thereof was a debt by one of the members for which the father was liable as surety, against which he did not attempt to secure himself, although the debtor had ample property, which he, six days afterwards, mortgaged to secure such claim. Held that, as such part of the consideration was fictitious, the sale was void as to creditors.

Appeal from circuit court, Macon county; ANDREW ELLISON, Judge.

Action by attachment by Seger's Sons against Thomas Bros. to recover a balance of an account. Plaintiffs appeal from a judgment in favor of the interpleader, John M. Thomas. Reversed.

C. P. Hess and B. R. Dysart, for appellants. R. S. Matthews and John F. Williams, for respondents.

THOMAS, J.

This is an action by attachment for balance on account of $1,127.29 against Thomas Bros., a firm composed of Morgan Thomas, Lott Thomas, and T. L. Thomas, three brothers, and sons of John M. Thomas. The latter interpleaded for the goods attached, and, the court below having rendered judgment for him, the plaintiffs appealed to this court. The evidence on the part of the interpleader was, in substance, as follows: Morgan Thomas, Lott Thomas, and T. L. Thomas, desiring to go into the mercantile business, applied to their father, John M. Thomas, for pecuniary aid, and obtained from him a loan of $1,400, for which they all gave their note dated December 9, 1886, payable 12 months after date, with interest at the rate of 10 per cent. per annum from date. Soon after this transaction, Morgan Thomas borrowed $750 from his father-in-law, W. W. Williams, to put into the business, for which he executed his note, his father, John M. Thomas, either signing it as surety, or executing another note to Williams as collateral. On the 19th day of January, 1887, the copartnership of Thomas Bros. was formed and started business at New Cambria, Macon county, Mo., with a capital stock of $2,150, this amount being made up of the $1,400 borrowed of their father, and the $750 borrowed of W. W. Williams, neither member of the firm having any money of his own. T. L. Thomas and Lott Thomas had no property whatever, but Morgan Thomas owned about 100 acres of land, worth about $1,800, and a lot of stock and farming implements. On the 18th day of March, 1887, Thomas Bros. executed their note to John M. Thomas for $290, due one day after date, with interest from date at the rate of 10 per cent. This was the only money loaned by John M. Thomas to the firm of Thomas Bros. By the 1st day of January, 1888, the firm of Thomas Bros. had become indebted to the wholesale trade to the amount of $6,000 over and above the amount claimed to be due interpleader. On the 17th day of January, 1888, the said firm sold their entire stock in trade to their father, and executed and delivered to him the following bill of sale: "We, John M. Thomas, party of the first part, and Morgan Thomas, Lott Thomas, and T. L. Thomas, parties of the second part, witnesseth, by this agreement, that for and in consideration of the sum of forty-five hundred dollars, the receipt of which is hereby acknowledged, the parties of the second part have sold, assigned, and transferred to the said party of the first part their entire stock of merchandise in the town of New Cambria, consisting of dry goods, groceries, and general merchandise, amounting to forty-five hundred dollars, as per inventory this day completed. For said merchandise the said parties of the second part have received a discharge of their indebtedness to the party of the first part for the sum of twenty-six hundred and eighty dollars, money borrowed by them from the party of the first part, and the said party of the first part has this day made, executed, and delivered his note to the parties of the second part, payable in one year, in the sum of eighteen hundred and twenty dollars, with eight per cent. interest. It is further agreed that the said John M. Thomas will collect the outstanding book-accounts due the firm of Morgan Thomas, Lott Thomas, and T. L. Thomas, or so much thereof as can be collected, without percentage or fees for collecting the same, and shall apply said amounts collected in discharge of the obligations due by said second parties. It is further agreed that any sums that the said John M. Thomas may from time to time pay out of his own money, on the obligations of said parties of the second part, he shall have a credit for like amount on his note this day given to the parties of the second part as above described. In witness whereof we have hereunto set our hands this 17th day of January, A. D. 1888. JOHN M. THOMAS. MORGAN THOMAS. LOTT THOMAS. T. L. THOMAS."

The interpleader testified that, learning that the firm was in debt about $6,000, besides what was due him and Williams, and being informed it was insolvent, he went to the members thereof, and asked them to secure him, which they consented to do, and the above bill of sale was accordingly executed. He testified, further, that the sum of $2,680, mentioned in the bill of sale, was made up of the notes of $1,400 and $290 due him, and of the note of $750 due Williams, with the interest then accrued; and that the stock of goods was valued at $4,500, including $500 in cash then in the drawer, all of which he got. Interpleader had "John M. Thomas" painted instead of "Thomas Bros." as the sign for the store. He employed T. L. and Lott Thomas as his clerks to run the business. On January 23, 1888, Morgan Thomas gave W. W. Williams, trustee, a deed of trust on the 100 acres of land owned by him, to secure the payment of the note of $750, dated in January, 1887. Interpleader never paid this note to Williams, and it was still outstanding at the time of the trial of this case, in September, 1888. After the execution of the bill of sale there was an understanding between John M. Thomas and his two sons, T. L. and Lott Thomas, that a private, individual indebtedness of the latter to the...