Stokes v. Burns

• Decision Date: 28 January 1896
• Parties: Stokes, Appellant, v. Burns et al.; Piggott, Interpleader
• Court: Missouri Supreme Court

33 S.W. 460

132 Mo. 214

Stokes, Appellant, v. Burns et al.; Piggott, Interpleader

Supreme Court of Missouri, First Division

January 28, 1896

Appeal from Clinton Circuit Court. -- Hon. William S. Herndon Judge.

Affirmed.

Jas. P Thomas, W. K. Amick, and Dowe, Johnson & Rusk for appellant.

(1) Under the evidence introduced, the case should have been submitted to the jury. The rule is well settled that if there is any evidence tending to prove the issues, the case must go to the jury. Groll v. Tower, 85 Mo. 249; Moody v. Deutsch, 85 Mo. 237; Baum v. Fryrear, 85 Mo 151. (2) It is the duty of the trial court in passing upon a demurrer to the evidence, to make every inference of fact in favor of the party offering the evidence which the evidence warrants, and which the jury, with any degree of propriety, might make. Wilson v. Board, 63 Mo. 137; Noeninger v. Vogt, 88 Mo. 589; Rine v. Railroad, 100 Mo. 228. (3) All cases of this character necessarily consist of two elements, the fraud of the grantor and grantee's participation therein, and evidence tending to prove either is admissible, although it has no bearing on the other. Bump on Fraud. Con. [3 Ed.], p. 582; Holmes v. Braidwood, 82 Mo. 610; Clark v. Cox, 118 Mo. 652; Desberger v. Harrington, 28 Mo.App. 632; Singer v. Goldenberg, 17 Mo.App. 549; Kurtz v. Miller, 26 Kan. 314; Meyberg v. Jacobs, 40 Mo.App. 128; Foster v. Hall, 12 Pick. 357; Hopkins v. Langton, 30 Wis. 379. (4) As to the second of said elements, that is, the participation of the grantees in the fraud of Burns & Company, all acts tending to show participation should be admitted, and collusion may be inferred from even slight circumstances. Rupe v. Alkire, 77 Mo. 641; Kelsey v. Murphy, 26 Pa. St. 78; Hartman v. Diller, 62 Pa. St. 37; Bump on Fraud. Con., p. 582. (5) The least degree of concert or collusion between the parties makes the acts of one the acts of all. Souder v. Schechterly, 91 Pa. St. 83; McDowell v. Rissell, 37 Pa. St. 164.

Willard P. Hall, Vinton Pike, and Brown & Pratt for respondent.

(1) The alleged fraud practiced by the defendants in procuring the property, whether against the plaintiff or the other attaching creditors, was wholly immaterial to any issue in this proceeding. Goodall v. Stewart, 3 So. Rep. 257; Bach v. Trech, 26 N.E. 1019; 1 Benjamin on Sales, p. 580, n. 19; Com. Co. v. Railroad, 28 S.W. 870; Donald v. Constant, 82 Ind. 212; Kennedy v. Thorpe, 51 N.Y. 174; Adler v. Fenton, 24 How. (U.S.) 407. (2) The property being their absolute property with all that implies, the defendants had the perfect right to transfer it in payment or security of any honest debt owed by them. (3) The debts secured by the deed of trust were honest debts. The property conveyed was not excessive. There was no collusive agreement between the grantor and the other parties to the instrument for the use of the grantors. The deed was therefore an honest deed and there was nothing to submit to the jury. (4) The president of the beneficiaries purchased the oatmeal mill at the sale under the deed of trust for the benefit of his corporations; the sale was public; the mere fact that he afterward rented the mill to the son-in-law of the defendants was no evidence of fraud or collusion on the part of the said corporations. Clark v. Cox, 118 Mo. 658. (5) The president and vice-president of the National Bank of St. Joseph and of the Ayr Lawn Company had no power as such officers to make representations for such corporations as to the financial standing of Burns & Company, and those representations, whether made by those officers upon the streets or elsewhere, imposed no liability upon said corporations. No suit could be maintained against them for any damage caused thereby, nor can their security for their honest debts be taken from them on account thereof.

Robinson, J. Brace, C. J., Barclay and Macfarlane, JJ., concur in the result.

OPINION

Robinson, J.

On February 12, 1892, plaintiff in this case brought suit against defendants by attachment for the recovery of $ 4,170.50, due for flour sold by plaintiff to defendant in car load lots shipped from Waterton, Dakota. The first car load on December 15, 1891, and the last on February 6, 1892. Under the writ of attachment issued in the case, the sheriff levied upon and seized certain flour as the property of defendants, being at the time in possession of Harry S. Piggott.

Said Harry S. Piggott filed his interplea claiming the property so seized, under a deed of trust executed by defendants February 10, 1892, in which he was trustee and the National Bank of St. Joseph, Missouri, and the Ayr Lawn Company were beneficiaries.

Plaintiff then filed the following answer:

"Plaintiff in his answer to the interplea, alleges that the debt named in the deed of trust was fictitious, that the deed was made by defendants with the design of defrauding, hindering, and delaying defendants' creditors, and that the interpleader and beneficiaries participated in that design; that about the same time with the making of this deed, defendants with a like design, participated in by interpleader and those represented by him, made other conveyances disposing of the balance of their property, and further charges that for about ninety days before the making of said deeds, defendants, in pursuance of a conspiracy formed by them with the other parties to said deeds, bought large quantities of merchandise from plaintiffs and others, with the purpose not to pay for the same, but to convert the same, to the use of defendants and said other parties; that the merchandise in controversy, and that purchased from plaintiffs, and much more, was converted to their use by means of said deeds ostensibly made to secure debts owing by defendants; that large quantities of merchandise greatly in excess of that usually carried by defendants, and in excess of the legitimate demands of their business, were purchased during this time and pursuant to this design, and that in order to aid them in buying more heavily, the National Bank of St. Joseph, knowing them to be insolvent, represented that defendants were worthy of credit, that defendants were indebted to merchandise creditors at the time said deeds were made for about sixty-five thousand ($ 65,000) dollars on about $ 40,000 of which attachment suits were brought. That John E. Sibbald, who is a son-in-law of defendants and a grantee in one of said deeds, about thirty days before the making of said deeds opened up a pretended business in the line of business conducted by defendants, and by means thereof aided in disposing of the merchandise procured by said fraudulent scheme."

Said answer further charges that defendants, in furtherance of their fraudulent scheme and to prevent detection of it, spirited away and concealed their books of account.

Interpleader Piggott then filed his reply to plaintiff's answer, denying the allegations thereof, except the execution of the deed of trust, to him, and that he took possession of the property named therein; and further replying says that the deed of trust was executed for the purpose of securing the debts therein named and that the same were honest and bona fide.

Under the pleading there was nothing for the interpleader to prove, the burden resting upon plaintiff to prove something alleged in his answer that would invalidate the deed of trust, and his right to the property under it in favor of the interpleader. The plaintiff so understood the situation and assumed the burden.

Although the allegations in plaintiff's answer to the interplea, that the debts secured by the deeds of trust were fictitious, they offered no testimony whatever tending to impeach them. Plaintiff's case was tried upon the theory of the existence of a conspiracy between Burns & Company and the beneficiaries in the deed of trust, whereby defendants were to buy large amounts of goods from him and others and not to pay for same and that in some way the beneficiaries of the deed of trust were to assist him in the fraud. The interpleader tried the case on the theory that the sole inquiry was the attempted fraud in the conveyance of Burns & Company to him. That the fraud on part of Burns & Company, by means of which they procured the property named in the deed of trust, was wholly immaterial as well as the question of the beneficiaries' participation therein. All the reasons assigned for the offering of testimony and all objections made thereto were upon the line above indicated, and it was upon those questions as then presented that the trial court was asked to pass, and to those questions we will confine ourselves.

Considering all the testimony introduced, together with all legitimate inferences to be drawn therefrom, under any and all theories by which his case might have been tried, we think there were not sufficient facts shown to authorize its submission to the jury.

In order to show the theory upon which plaintiff presents his case we have given a brief statement of the facts as developed by him at the trial:

Stephen J. Burns, and his wife, Martha, for several years prior to February 10, 1892, were engaged in the wholesale flour and feed business, and were running an oatmeal mill all under the firm name of "Burns & Co." and down to the time of the bringing of this suit made their deposits at the National Bank of St. Joseph and borrowed money from it and the Ayr Lawn Company. During this time Calvin F. Burnes was the president of the National Bank of St. Joseph, and vice-president of the Ayr Lawn Company, and a director in both institutions. C. C. Burnes was president of the Ayr Lawn Company, and a director in both institutions.

During the fall of 1891, Burns & Company owed the Ayr Lawn Company and the bank about $ 26,000, as...