Tufts v. Thompson
| Decision Date | 14 June 1886 |
| Citation | 22 Mo.App. 564 |
| Parties | JAMES W. TUFTS, Respondent, v. GEORGE R. THOMPSON ET AL., Appellants. |
| Court | Kansas Court of Appeals |
APPEAL from Jackson Circuit Court, HON. TURNER A. GILL, Judge.
Affirmed,
The case and facts are stated in the opinion.
BOTSFORD & WILLIAMS, B. F. DEATHERAGE, and JAMES C. RIEGER, for the appellants.
I. On the undisputed facts, Campbell, Bond, and the Bank of Commerce, were mortgagees of the property in dispute without notice of the unrecorded conditional sale from plaintiff to the mortgagors, and said defendants (Campbell, and others) as such mortgagees, being innocent purchasers, in good faith of the property, the unrecorded conditional sale, relied upon by plaintiff, is void, and the judgment should have been for defendants and against plaintiff. Laws of Mo., 1877, 320; sects. 2505, 2507, 2508, Rev. Stat.; 1 Jones on Mortgages sect. 459; Cary v. White, 52 N.Y. 138; Hodges v. Black, 76 Mo. 537; Cass County v. Oldham, 75 Mo. 50; Kingsland v. Dunn, 80 Mo. 649; Chrysler v. Renois, 43 N.Y. 209; Podgett v. Lawrence, 10 Paige (N. Y.) 170.
II. On the undisputed facts, defendants were and are creditors of Smith & Faris, the vendees of the property in dispute from the plaintiff, and the condition upon which the sale thereof to said vendees was made, not having been acknowledged or recorded, is void as to said defendants, as such creditors, irrespective of their mortgages, or the validity thereof, or whether the mortgages, if valid, constituted said defendants purchasers of the property from said vendees.
III. The third declaration of law, given by the court below, for the plaintiff, declaring the grounds upon which that court found and gave judgment for the plaintiff, is erroneous.
IV. Even a fraudulent deed is good against all the world except creditors who are defrauded. Johnson v. Jeffries, 30 Mo. 423; Bump on Fraudulent Conveyances, 458.
V. The statute, by its terms, embraces " creditors," without qualification, and under it creditors prior and subsequent are protected. Wright v. McCormick, 67 Mo. 426; Bump on Fraud. Conv. 502.
LATHROP & SMITH, for the respondents.
I. As between plaintiff and the assignors, the contract between them was valid. Parmlee v. Catherwood, 36 Mo. 479; Little v. Page, 46 Mo. 212; Wangler v. Franklin, 70 Mo. 659; Summer v. Coffey, 71 Mo. 121; Benjamin on Sales (4 Ed.) 320. So it is good as against their assignee. Haeussler v. Teichman, 10 Mo.App. 594; Hawks v. Pretzloff, 51 Wis. 160; Roberts v. Austin, 26 Iowa 315.
II. By legislative enactment, the matter of voluntary assignments has been so regulated and curtailed in this state as to prevent and forbid preferences, in an assignment for the benefit of creditors. Rev. Stat., 1855, sects. 1 and 39; Gen. Stats., 1865, ch. 112, sect. 1; Wag. Stat., ch. 9, sect. 1; Rev. Stat., 1879, ch. 5, sect. 1; Shapleigh v. Baird, 26 Mo. 326; Crow v. Beardsley, 68 Mo. 435. Whenever a debtor attempts, under a general assignment, to give a preference to certain creditors, as if by one act the debtor parts with dominion over his property, and as part of one transaction executes mortgages upon all his property to creditors, the mortgages are void, and the property would pass to the assignee, under the general assignment, instead of to the mortgagees. Sect. 354, Rev. Stat.; Crow v. Beardsley, 68 Mo. 435; Van Patten v. Marks, 52 Iowa 518; Ring v. Ring, 12 Mo.App. 96; Miner's Nat. Bk. Appeal, 57 Pa.St. 193; State v. Benoist, 37 Mo. 510; Burrill on Assignments (3 Ed.) 495.
III. Section 2505, Revised Statutes, has no application here. It applies to actual sales, and not to conditional sales, with stipulated terms. Sect. 2505, Rev. Stat.; Benjamin on Sales (4 Ed.) sects. 1 and 320; Clafflin v. Rosenberg, 42 Mo. 450; Forrester v. Moore, 77 Mo. 663; 67 Mo. 429.
IV. The debts of these mortgagees were all preexisting and antecedent to the possession of this property by the vendees. Such antecedent debts do not make such antecedent creditors " purchasers in good faith." Manhattan Co. v. Evanstone, 6 Paige (N. Y.) 457; Agricultural Bank v. Dorsey, 1 Freeman Ch. (Miss.) 343; Thompson v. Van Vechten, 27 N.Y. 581; Wood v. Robinson, 22 N.Y. 567.
V. The case of Gummersell v. Handbloom (19 Mo.App. 274), is distinguishable from this.
This is an action in replevin The facts, essential to a proper understanding of the questions to be decided, are about as follows:
On the eighth day of April, 1884, the plaintiff sold to Smith & Faris, partners, doing business as druggists, in Kansas City, a soda fountain, for which Smith & Faris executed to plaintiff their written promises, maturing at different times. The contract contained an express stipulation that until the several sums were paid, the title of the property should remain in the vendor, and that upon the failure of the vendees to make payment of any one of the sums, according to the tenor and effect of the promise, the plaintiff might retake the possession of the fountain; but this contract was not acknowledged nor recorded. No part of these sums have been paid, though some of them were past due at the date of the institution of this suit.
On the thirty-first day of May, 1884, while Smith & Faris were in possession of said fountain in their drug store, they gave to the defendants, other than Thomas, severally, their promissory notes, for different sums; and, to secure their payment, executed several mortgages on the stock of drugs and fixtures, including the soda fountain in question. On the same day of the execution of these notes and mortgages, Smith & Faris made an assignment for the benefit of their creditors, to the defendant Thomas, as assignee. Thomas, having possession of the fountain as such assignee, and refusing to surrender the same to plaintiff on demand, this action was instituted. By stipulation of parties, the mortgagees were admitted to come in as defendants to litigate the validity of their respective mortgages, as against the plaintiff and the assignee.
On trial had before the court sitting as a jury, the court found the issues for the plaintiff. Defendants prosecute this appeal.
I. As between Tufts, the vendor, and Smith & Faris, the vendees, the soda fountain remained the property of plaintiff. This was the well settled law of this state prior to 1877. Parmlee v. Catherwood, 36 Mo. 480; Little v. Page, 44 Mo. 412; Mathews v. McElroy, 79 Mo. 202; Kingsland-Ferguson Manufacturing Co. v. Culp, 85 Mo. 548. The act of 1877, now incorporated in sections 2505, 2507, 2508, Revised Statutes, in no wise affected the rule as between vendor and vendee. This statute only invalidates such contracts when not acknowledged and recorded, in favor of subsequent purchasers and creditors in good faith, etc.
As a corrolary of this proposition, Thomas, the assignee of Smith & Faris, occupies no better situation than his assignors. He took the property burdened with the same incidents and infirmities as to the title, and subject to the same equities, which attached to it in the hands of the assignors. Brown v. Heathcote, 1 Atk. 162; Wakeman v. Barrow, 2 N.W. 50; Fletcher v. Marcy, 2 Story Rep. 565; Donald's Assignee v. Farewell, 93 U. S.; Horschon v. Conway, 98 Mass. 150; Mitchell v. Winslow, 2 Storey Rep. 637; Hawk v. Pritzloff, 51 Wis. 160; Roberts v. Austin, 26 Iowa 315.
II. It must follow that if the mortgagees can take this property from the plaintiff, which is the legal effect of their status in this action, it must be by virtue of the statute above referred to.
It is held by the St. Louis court of appeals, in Defiance Machine Works v. Trisler (21 Mo.App. 69), that this statute only postpones the claim of such a vendor, who has failed to have his contract duly acknowledged and recorded, in favor of subsequent purchasers and creditors in good faith, without notice. It does not apply to debts created prior to the sale of the property. This construction is in accord with my preconceived view, and the argument of Thompson, J., who delivered the opinion, has confirmed and strengthened it.
If, therefore, the mortgagees are neither subsequent creditors nor purchasers within the terms of the statute, the plaintiff should prevail. The evidence at the trial was, without contradiction, that all the notes given by Smith & Faris, on May 31, 1884, were given in consideration of notes held by the parties long prior to April 8, 1884, and the original notes were not notes or debts of the firm of Smith & Faris, but were the debts of individual members of the firm.
Counsel for appellant seek to escape the force of this fact by the assumption that...
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