State v. O'Neill

• Decision Date: 26 June 1899
• Citation: 52 S.W. 240,151 Mo. 67
• Parties: STATE, to Use of MAYER, v. O'NEILL et al.
• Court: Missouri Supreme Court

52 S.W. 240

151 Mo. 67

STATE, to Use of MAYER, v. O'NEILL et al.

Supreme Court of Missouri, Division No. 2.

June 26, 1899.

APPEAL — THEORY OF TRIAL — CHATTEL MORTGAGE — BURDEN OF PROOF — ATTACHMENT — JUSTIFICATION OF SHERIFF — RECORD OF MORTGAGE — FRAUDULENT AGREEMENT.

1. Where, on a trial, parties to an action by their conduct and theory of trial concede that the opposite party is a creditor of a mortgagor through whom the former claim, they cannot on appeal claim that the latter have failed to show that they were creditors.

2. One claiming under a chattel mortgage, or basing an action thereon, has the burden of showing every fact on which its validity depends.

3. A writ of attachment, regular on its face, if issued out of a court of competent jurisdiction, is a sufficient justification to a sheriff for taking possession of property thereunder; and he need not concern himself in regard to the legality of the claim on which it is issued.

4. A chattel mortgage withheld from record, pursuant to an agreement between the mortgagor and mortgagee, for the purpose of fostering the mortgagor's credit, is fraudulent in fact, and void as to creditors who give the mortgagor credit on the faith of his apparent solvency, though there may not have been any actual intent to hinder, delay, or defraud his creditors.

5. Taking possession of mortgaged property by a mortgagee operates to make valid, between the mortgagor and mortgagee, a mortgage which by its terms or collateral agreement permits the mortgagor to retain possession and sell the mortgaged property as his own, and which would otherwise be void.

6. Where the attorney of a mortgagee having a valid lien on chattels enters into an agreement

with one whose mortgage is fraudulent to take possession of the mortgaged goods, and to make common cause against the creditors of the mortgagor, and to divide the proceeds among themselves equally, regardless of their respective claims, and that, in case only one of them should succeed in establishing a right to the goods under his mortgage, then he should have all of the same, operates to render the otherwise valid mortgage fraudulent as to the creditors, as tending to hinder, delay, and defraud them.

Appeal from circuit court, Jackson county; J. H. Slover, Judge.

Action by the state of Missouri, to the use of Augusta Mayer, against John P. O'Neill and others, on his bond as sheriff. From a judgment in favor of defendants, plaintiff appealed. Affirmed.

Botsford, Deatherage & Young, for appellant. Lathrop, Morrow, Fox & Moore, Henry Wollman, Alexander New, Haff & Van Valkenburgh, J. W. Garner, M. R. Downs, and L. A. Laughlin, for respondents.

SHERWOOD, J.

Action on sheriff's bond, against the sheriff and his sureties, for an alleged wrongful seizure by the sheriff, O'Neill, under seven writs of attachment levied on certain personal property which Augusta Mayer claimed as hers by virtue of a certain chattel mortgage executed to her by one Johns on the 9th day of January, 1894. The validity of this mortgage is questioned by this litigation. At the conclusion of the evidence the court gave a peremptory instruction to find for defendants, and plaintiff took a nonsuit, with leave, etc., and having moved, and the motion being denied, excepted and appealed to this court.

Attention will now be directed to the salient features of this cause, in order to determine whether the mortgage made by Charles Johns to his sister Augusta Mayer was valid or not, because upon its validity rests the validity of the peremptory instruction aforesaid. Intimately associated, however, with the Mayer mortgage, is the prior one made to the Union National Bank of Kansas City by Johns, and to which reference is made in the former but subsequent mortgage. The mortgage to Mrs. Mayer was given on the entire stock of shoes and fixtures at 536 Main street, Kansas City, Mo., as security for the sum of $4,270, supposed to be evidenced by six promissory notes, which are as follows:

"(A) Kansas City, Mo., July 13, 1885. Due Mrs. Augusta Mayer five hundred ($500.00) dollars, which is invested in the Little Venture Cattle Co., or due on demand, with 60 days' notice, at 8 per cent. from date, two hundred ($200.00) dollars recd. in 1881, and three hundred ($300.00) dollars in 1883; total, as the above stated, $500.00 dolls. If left in the Little Venture Cattle Co. for investment, she will receive her dividends as soon as any are made, pr. ratio, or draw her capital out as stated before in this. Chas. Johns."

"(B) Kansas City, Mo., Nov. 30, 1886. Due Augusta Mayer three hundred and fifty ($350.00) dolls., with interest at the rate of 8 per cent pr. annum till paid. $549.10. Chas. Johns."

"(C) $375.00. Kansas City, Mo., Aug. 12, 1887. ___ after date I promise to pay to the order of Augusta Mayer three hundred seventy-five and no/100 dollars, for value received. Negotiable and payable without defalcation or discount, and with interest from date at the rate of 8 per cent. per annum, and, if the interest be not paid annually, to become as principal, and bear the same rate of interest. $717.56. Chas. Johns."

"(D) $625.00. Kansas City, Mo., Nov. 9, 1888. ____ after date I promise to pay to the order of Augusta Mayer six hundred twenty-five and no/100 dollars, interest of 8 per cent. pr. annum. Value received. Due $990.00. Chas. Johns."

"(E) $750.00. Kansas City, Mo., January 3rd, 1890. One year after date I promise to pay to the order of Augusta Mayer seven hundred fifty and no/100 dollars, interest of 8 per cent. pr. annum. Value received. Due $990.00. Chas. Johns. B. Glick, Bookseller and Stationer, 535 Main St., Kansas City."

"(F) $290.00. Kansas City, Mo., October 16th, 1891. One year after date I promise to pay the order of Augustus Mayer two hundred and ninety and no/100 dollars, for value received. Negotiable and payable without defalcation or discount, and with interest from date at the rate of 8 per cent. per annum, and, if the interest be not paid annually, to become as principal, and bear the same rate of interest. Due 343.85. Chas. Johns."

No payment had ever been made on these notes, and it was not until December 23, 1893, that any attempt was made to collect the indebtedness represented by the notes. Then J. L. Young was written to by Mrs. Mayer, and the notes inclosed to him for collection. Mrs. Mayer, as well as Young and Johns, had formerly lived in Decatur, Iowa, about 1866 or 1867; but he had held no correspondence with her since 1870, until the letter aforesaid reached him at Garden Grove, Iowa, 185 miles from Kansas City. Young, however, was well acquainted with Johns, — used to visit him at Kansas City, and had been his counsel in active litigation for three years. They were on intimate terms.

The mortgage to Mrs. Mayer contains, among others, these clauses: "(All subject, however, to the rights of the Union National Bank of Kansas City, Mo., as its mortgage interest may appear, under a chattel mortgage heretofore executed by me to said Union National Bank for the purpose of securing a note for three thousand five hundred dollars.) Upon condition that if I pay to said Augusta Mayer, her executors, administrators, and assigns, the full amount of the six promissory notes which are attached to this chattel mortgage and made a part hereof, together with the interest thereon, according to the tenor and effect of said promissory notes from the several dates thereof, as shown by said notes, which are marked A, B, C, D, E, and F, and recorded herewith, then this conveyance shall be void; otherwise, to remain in full force and effect. And in case default be made in the payment of the debt above mentioned, or any part thereof, or of the interest due thereon, on any day when the same ought to be paid, then the whole sum shall, at the election of said Augusta Mayer or her agent or legal representative, become immediately due and payable. The property hereby sold and conveyed to remain in the possession of said mortgagee, who may proceed to sell the same so long as it can be done without an unreasonable depreciation in the value of her security, and apply the proceeds realized therefrom, after paying reasonable expenses, in payment of the mortgage heretofore mentioned, and also to the payment of the indebtedness hereby secured, or upon taking possession of said property, or any part thereof, either in case of default, or as above provided, or at any time thereafter, the said Augusta Mayer or her legal representative may proceed to sell the same, or any part thereof, at public auction, to the highest bidder for cash, at said storeroom in the city of Kansas City, county of Jackson, and state of Missouri; first having given 10 days' public notice of the time, terms, and place of sale, and property to be sold, by publishing notice thereof in the Kansas City Times for three consecutive days. I fully exonerate and hold said Augusta Mayer and her legal representatives and assigns harmless for any claim for trespass on account of entering said or any premises where said personal property may be, and taking or causing to be taken the property herein mentioned. I further agree to protect said Augusta Mayer or assigns from any landlord's claim while engaged in the disposal of said goods. After said debt and interest, together with all necessary costs, charges, and expenses incurred by said Augusta Mayer or assigns, have been paid and satisfied in full out of the proceeds of such sale, she or they will pay over the surplus, if any, to said Charles Johns or his legal representatives."

The mortgage to the bank had been executed on the 11th day of March, 1893, and was made to Lewis, cashier, to secure the payment of $3,500, due in 90 days, and was on the entire stock of boots and shoes at 536 Main street. One clause in that mortgage is the following: "But if the said Charles Johns shall fail or make default in the payment of said indebtedness, or any part...