Nicholson v. Golden

CourtCourt of Appeals of Kansas
Citation27 Mo.App. 132
PartiesPETER NICHOLSON ET AL., Plaintiffs and Appellants, v. WILLIAM GOLDEN ET AL., Defendants, and E. A. PHILLIPS ET AL., Interpleaders, Respondents.
Decision Date06 June 1887

APPEAL from Cole Circuit Court, HON. E. L. EDWARDS, Judge.

Affirmed.

Statement of case by the court.

This is an action by attachment, instituted on the fifteenth day of March, 1882, in the Miller circuit court. The ground of the attachment, as alleged in the affidavit, was that defendants had fraudulently conveyed and assigned their property and effects so as to hinder and delay their creditors. At the return term, September following, E. A. Phillips & Company, a partnership composing E. A. Phillips and George W. Sedgewick interpleaded in said cause, claiming the property attached consisting of certain goods usually kept in a dry goods store. The cause, on application of interpleaders, was transferred by change of venue to the Cole county circuit court. The defendants, Golden & Company, made no defence. Prior to the filing of the interplea the attaching creditors with other creditors of said Golden & Company, who had also attached the same property, brought their action, under the provisions of section 448 of the Revised Statutes, to set aside for fraud the chattel mortgage given by said Golden & Company to said E. A. Phillips & Company on said goods prior to the levying of the attachment, and under which E. A Phillips & Company claimed possession and title to said goods. This action was also returnable to the September term of the Miller circuit court. This action was likewise transferred, at said term, by change of venue, to the Cole circuit court, and was received by the clerk of the latter court prior to the transcript in the attachment suit. But the clerk placed the attachment suit first on his docket. At the following May term of the Cole circuit court, when the cause of the interplea came on for trial, the plaintiffs moved the court to try the action arising on the petition to vacate the mortgage first. This motion the court overruled, and proceeded with the trial of the issues on the interplea.

The appellants, plaintiffs below, have not furnished this court with an abstract of the record, setting out the evidence, or excerpts therefrom, as required by the rule of court, but have merely made a statement of what they conceive the evidence tended to show, mingled, all through, with comments and suggestions thereon, more in the nature of a running argument based on their construction of the evidence than the actual statement of the witnesses and the written evidence. The respondents have set out the evidence on their behalf conformably with the rule, and we shall consider this case, as it is here presented; and if appellants have not the benefit of certain facts claimed by them to exist, they have no one to complain of but themselves.

The evidence, in brief, shows about the following state of facts: The firm of Golden & Company, for some time prior to the third day of March, 1882, were doing business principally at the town of Tuscumbia, on the Osage river, in Miller county, as general merchants, and had other small stores at points on said river in that vicinity. In 1881 they made a contract with interpleaders, residing at Kansas City, for the delivery to them of one hundred thousand railroad ties. The contract was that the ties were to be delivered by Golden & Company at the mouth of the Osage river, where it empties into the Missouri river. When the ties were brought by Golden & Company to the river bank on the Osage, Phillips & Company were to pay them, on such ties as were inspected and approved, the sum of twenty-two cents each, and ten cents more on the completion of the delivery at the mouth of the river.

All the ties were to be so delivered by the month of July, 1882. During the winter of 1881-1882, Golden & Company had received from Phillips & Company, as advancements on said contract, about the sum of twenty thousand dollars, and had delivered along the banks of the river about seventy thousand ties up to the third day of March, 1882, but only a very small portion had reached the mouth of the river. In February, 1882, a freshet of unusual violence and volume swept away most of the ties so lying along the banks of the river. Golden & Company were largely in debt, on this account, to interpleaders, and to other creditors, and concluded that they could not proceed further in business without material assistance.

One Clayton Phillips (not related to E. A. Phillips), who had prior to this time been a member of the firm of Golden & Company, claiming now to be acting as agent for Golden & Company, went to Kansas City to see interpleaders to induce them to make an advancement of about ten thousand dollars to Golden & Company, to relieve them of embarrassment. This interpleaders refused; but suggested to Clayton Phillips that he had better go to St. Louis, where the bulk of the other creditors resided, and see if some adjustment of Golden & Company's indebtedness could not be effected; with assurance that if that could be accomplished interpleaders would make some advancement to the end desired. The testimony of Clayton Phillips is, that he accordingly went to St. Louis, and saw the creditors, including the attaching plaintiffs, and arranged for a meeting of said creditors; that at said meeting one David Nicholson, a clerk or collecting agent of the plaintiff, Peter Nicholson, was present; that he (Clayton Phillips) made a statement of the financial condition of Golden & Company, and proposed a compromise; that it was agreed at said meeting, no one objecting, that a committee of three should be appointed to employ counsel to go to Tuscumbia to investigate and arrange the matter. This committee selected for this office one Charles Davis, an attorney of St. Louis, who proceeded at once to Tuscumbia. E. A. Phillips also went to Tuscumbia about the first day of March, where he met Davis and said David Nicholson. An examination was made by the parties into the state of Golden & Company's affairs. It seems that Nicholson was then threatening to sue or attach. Phillips stated that if a compromise could be effected with all the creditors at forty cents on the dollar his firm would advance that sum to them, taking a mortgage from Golden & Company on their property to secure to Phillips & Company their debt and the sum so advanced. The parties all returned to Tuscumbia. Davis was willing, on behalf of the parties he represented, to accept this proposition; and both he and Phillips testified that Nicholson consented thereto; and thereupon, in reliance on this fact, Phillips and Davis returned immediately to Tuscumbia, and closed the arrangement with Golden & Company. Davis drew up for the parties a chattel mortgage on certain real estate, the said goods, and all the ties which Golden & Company had on the river, as well as those washed away, and on all such as they might thereafter get out, to secure the amount already advanced on the former contract, and the sum to be advanced to said creditors. This mortgage was duly acknowledged by Golden & Company, and filed for record on the third day of March, 1882.

Interpleaders' evidence tended to show that the goods in question were then turned over by the mortgageors to interpleaders, and that one Lee Sedgewick took possession for and on behalf of interpleaders. There was also some evidence tending to show that the business continued in the name of the mortgageors, which is sufficiently noticed in the opinion hereafter. Interpleaders thereupon made out and sent to Davis a draft, for about the sum of forty-five hundred dollars to be by him paid over to the creditors of Golden & Company in satisfaction of the compromise of forty cents on the dollar. Davis stated that Phillips was unwilling to make this advancement unless all the creditors accepted the compromise, and that he told Phillips, that if they did not do so the mortgage could be cancelled and the money returned to him. All the creditors seem to have accepted this money except the plaintiffs and a firm in New York and a firm in Tuscumbia. Davis accordingly paid over the money to the accepting creditors, and returned the amount not accepted to interpleaders. This amount bears but a small proportion to the amount so paid over.

After the execution of the mortgage interpleaders bought large amounts of goods for replenishing the stock in the store at Tuscumbia, which goods were billed and shipped in their name, and were mingled with the goods in question, and there is nothing in the record to show but a part of the goods so purchased by interpleaders were attached. The goods seized under the attachment were sold under order of the court, and the proceeds are held by the sheriff to abide the result of this litigation.

About June, 1882, interpleaders and Golden & Company, had a settlement of all the matters between them, as it became manifest that Golden & Company would not be able to redeem. By this settlement the whole property was turned over to interpleaders absolutely, and the indebtedness of Golden & Company to them was forgiven. The evidence of interpleaders was that they sustained in this transaction with Golden & Company a loss of about ten thousand dollars. There was other evidence in the case, but its important features are sufficiently noticed in the opinion of the court.

On behalf of interpleaders the court gave the following declarations of law:

" 1. If the jury believe, from the evidence, that the indebtedness secured by these mortgages read in evidence was a valid and bona fide indebtedness and that said mortgages were accepted in good faith by E. A. Phillips & Company, to secure said indebtedness and that
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