4 S.W. 260 (Mo. 1887), Foster v. Mullanphy Planing-Mill Co.

Citation:4 S.W. 260, 92 Mo. 79
Opinion Judge:Sherwood, J.
Party Name:Foster, Appellant, v. Mullanphy Planing Mill Company
Attorney:Charles B. Stark for appellant. Leonard Wilcox and H. J. Grover for respondent.
Case Date:May 16, 1887
Court:Supreme Court of Missouri
 
FREE EXCERPT

Page 260

4 S.W. 260 (Mo. 1887)

92 Mo. 79

Foster, Appellant,

v.

Mullanphy Planing Mill Company

Supreme Court of Missouri

May 16, 1887

Appeal from St. Louis Court of Appeals.

Affirmed.

Charles B. Stark for appellant.

(1) The only question before the court on an issue in a plea in abatement to an attachment, alleging that the defendant has fraudulently conveyed or assigned his property, is whether he has so conveyed or assigned his property, and it is, therefore, entirely immaterial whether the trustee, Schureman, has any title to the property conveyed here. Enders v. Richards, 33 Mo. 598. (2) The directors of a solvent corporation are trustees for the shareholders, and are subject to all the duties and disabilities of trustees. McAllen v. Woodcock, 60 Mo. 174; Lingle v. Hon, 45 Mo. 109; Bent v. Priest, 10 Mo.App. 543-7; S. C., 86 Mo. 475; Skrainka v. Allen, 7 Mo.App. 434; Brewster v. Stratman, 4 Mo.App. 41; Cumberland Coal Co. v. Sherman, 30 Barb. 553; Koehler v. Black River Falls Iron Co., 67 U.S. [2 Black] 715; Sawyer v. Hoag, 84 U.S. [17 Wall.] 610; Jackson v. Ludeling, 88 U.S. [21 Wall.] 616; Wardell v. Railroad, 103 U.S. [13 Otto] 651; Railroad v. Howard, 74 U.S. [7 Wall.] 392, 409; Hoyle v. Railroad, 54 N.Y. 315-28-29-30; Coleman v. Railroad, 38 N.Y. 201; Bliss v. Matteson, 45 N.Y. 22. (3) The directors of an insolvent corporation are trustees for the benefit of its creditors. Railroad v. Howard, 74 U.S. [7 Wall.] 392, 409; Lingle v. Hogan, 45 Mo. 109-10; Skrainka v. Allen, 7 Mo.App. 434-8-40; Eyerman v. Krieckhaus, 7 Mo.App. 455; Chouteau v. Allen, 70 Mo. 290, 338; Jones v. Mech. Co., 38 Ark. 17; United Soc. v. Underwood, 9 Bush [Ky.] 609; Gaslight Imp. Co. v. Terrell, 39 Law J. Chan. 725; S. C., 10 Eq. Cases [Law Rep.] 168-76; Sykes Cases, 13 Eq. Cases [Law Rep.] 255-59-60; Morawetz Priv. Corp., secs. 246, 579-82; Thompson Liab. Off. and Agts., p. 397, sec. 23. (4) A trustee will not be permitted to create such a relation between himself and the trust property as will make his own interest antagonistic to that of his beneficiary. Lingle v. Hogan, 45 Mo. 109; McAllen v. Woodcock, 60 Mo. 174; Bent v. Priest, 10 Mo.App. 543-57; S. C., 1 West. Rep. 749; 86 Mo. 475; Skrainka v. Allen, 7 Mo.App. 434; Brewster v. Stratman, 4 Mo.App. 41; Koehler v. Iron Co., 67 U.S. [2 Black] 715; Jackson v. Ludeling, 88 U.S. [21 Wall.] 616; Sawyer v. Hoag, 84 U.S. [17 Wall.] 610; Wardell v. Railroad, 103 U.S. [13 Otto] 651; Haywood v. Lumber Co., 26 N.W. 184 (Wis.) . (5) The execution of the deed of trust in question, by the board of directors of the respondent, to secure to four of their number a preference in the payment of preexisting debts over the general creditors of the corporation was a breach of the duty which they owed to the general creditors, their cestuis que trust, and was, therefore, fraudulent as against them. See authorities cited under points 2, 3, and 4. (6) The term fraud, as understood in the statute concerning fraudulent conveyances, has the same meaning in the attachment law; and it is not necessary to show that the act originated in any premeditated design to commit a positive fraud, or to injure other persons. Reed v. Pelletier, 28 Mo. 173; Beach v. Baldwin, 14 Mo. 597. (7) When one makes a conveyance of his property to hinder, delay or defraud his creditors, a trust results thereby in their favor, and the deed, as against them, is "utterly void," and such property may be seized on attachment or execution at law against him, and sold. R. S., 1879, sec. 2497; Ryland v. Callison, 54 Mo. 513; Allen v. Berry, 50 Mo. 90; Potter v. McDowell, 31 Mo. 62. (8) The deed of trust in question is void as against the plaintiff, because the resolution authorizing its execution was adopted by the votes of directors interested in its execution. Patrick v. Gas Co., 17 Mo.App. 462; Bennett v. Roofing Co., 19 Mo.App. 349; Butts v. Wood, 37 N.Y. 317; Coleman v. Railroad, 38 N.Y. 201; Chamberlain v. Wool Co., 54 Cal. 103; Haywood v. Lumber Co., 26 N.W. 184 (Wis.) ; Lippincott v. Shaw Carriage Co., 25 F. 577.

Leonard Wilcox and H. J. Grover for respondent.

(1) A corporation which is insolvent merely -- as well as a partnership or individual -- can prefer one creditor to another. 2 Morawetz on Corp. [2 Ed.] sec. 786; Catlin v. Bank, 6 Conn. 233, 241; Pondville & Co. v. Clark, 25 Conn. 97; Maryland v. Bank, 6 Gill and J. 219, 220; Poole's Case, 9 Ch. L. Div. R. 322, 328; St. Louis v. Alexander, 23 Mo. 483, 524; Shelley v. Boothe, 73 Mo. 77; Dougherty v. Cooper, 77 Mo. 528. (2) It is a settled doctrine (in Missouri at least) that a director in a corporation has a right to deal with such corporation in any way that any other person can. St. Louis v. Alexander, 23 Mo. 527, 531; Kitchen v. Railroad, 69 Mo...

To continue reading

FREE SIGN UP