Boland v. Ross

• Citation: 25 S.W. 524,120 Mo. 208
• Parties: BOLAND v. ROSS et al.
• Decision Date: 13 February 1894
• Court: United States State Supreme Court of Missouri

25 S.W. 524

120 Mo. 208

BOLAND v. ROSS et al.

Supreme Court of Missouri, Division No. 2.

February 13, 1894.

PLEADING — CROSS BILL — FRAUDULENT CONVEYANCES — ATTACHMENT — RIGHTS OF CREDITORS.

1. Where a mortgagee and attaching creditors have been made defendants in a suit, by one partner, for the distribution of the firm assets, and the mortgagee answers, setting up his mortgage as a prior lien, the attaching creditors, under Rev. St. 1889, § 571, which provides that any attaching creditor may sue to set aside any fraudulent conveyance on property attached, may file a cross bill to have the mortgage set aside on the ground of fraud, as the mortgagee, by answering and setting up his mortgage as a prior lien, waives the objection that the cross bill is not germane to the subject-matter of the petition.

2. Where a petition by one partner for the distribution of the partnership property fails to state grounds for equitable relief against some of the defendants, an objection to their joinder must be taken by demurrer.

3. Where part of an indebtedness for which a mortgage is given is fraudulent as to creditors, it will avoid the entire mortgage, and such effect is not prevented by the taking possession of the mortgaged property.

4. When the mortgagee, while in possession, places goods in stock and pays the rent of the building, and the goods are seized, with the others, by the sheriff under the attachment, and the building retained to keep them in, the mortgagee should be paid for the same out of the proceeds of the sale.

5. Where pleas in abatement in the attachment actions by the creditors are undetermined, a distribution of the funds among such creditors should not be allowed.

Appeal from circuit court, Jackson county; R. H. Field, Judge.

Action by J. T. Boland against Michael Ross and others. There was a judgment in favor of some of the defendants and against Ross, and Ross appeals. Reversed.

The other facts fully appear in the following statement by BURGESS, J.:

The plaintiff and the defendant W. J. Ross were partners in the retail liquor business, as saloon keepers, under the firm name of Ross & Boland. Their business enterprise did not prove successful, and they became largely involved in debt. Among others of their creditors was Michael Ross, brother to W. J. Ross, to whom they were indebted, and gave a mortgage on their partnership stock to secure the payment of his debt, and placed him in the actual possession thereof. This mortgage also included some real estate owned by Ross & Boland individually. They were also indebted, or claimed to be, at the same time, to Michael Ross in the sum of about $3,000, — $1,000 of which was secured on some real estate of Boland's. On May 22d Block, Ney, Shulman, and Heim, in the order named, attached the property mortgaged, all the stock not mortgaged, and the real estate of the individual members of the partnership, — and the sheriff took possession of the same. On June 3d J. T. Boland, one of the partners, began a suit against his copartner for an accounting and dissolution of the firm, and made the mortgagee, Michael Ross, and attachment creditors parties defendant. In this petition he sets up the necessary facts to authorize his suit against his copartner, and also alleged the mortgages and attachments as demands due from the firm, and prayed a distribution of its assets among all the creditors. He also asked the appointment of a receiver, which the court granted. To the attachment suits the defendant Ross filed pleas in abatement, which have never been tried and are now pending. To the petition for an accounting the defendant Michael Ross made answer, being a general denial, and setting up his mortgages and deeds of trust, — alleging the lien thereof as prior and superior to all other claims. These instruments, on their face, show a consideration of $7,000, but Michael Ross claims but $4,500, — alleging the mistake in the amount, and explaining that it occurred through the scrivener who drew the instruments. On the 26th of January, 1891, the attachment creditors filed amended answers, and what they called cross bills against the holder of the mortgage and deeds of trust; setting up their attachments and assailing the mortgage and deeds of trust as fraudulent, and as made for the purpose of hindering and delaying creditors. To these cross bills the mortgagee filed general denial. The sheriff, who took possession of the attached property, was, on June 7, 1890, by plaintiff made a party defendant. On June 9, 1890, Pottier, the receiver, filed his bond as such; which being approved by the court, he took immediate possession of all the property, and before the next term of the court sold all of the property under its orders. On the same day the cross bills were filed the cause was tried before the court. At the trial the defendant Michael Ross objected to the introduction of any evidence under the cross bills, on the ground that the matters stated in them were not germane to the matter in the original bill, and showed no grounds of equitable jurisdiction. The objections were overruled, and defendant saved his exceptions. The plaintiff offered no evidence in support of his petition. After the evidence had all been introduced in behalf of the attaching creditors, defendant Michael Ross asked the court to find for him against the plaintiff Boland. This the court did, and dismissed the petition in so far as Michael Ross was concerned. He then asked the court to declare that, under the pleadings and evidence, the plaintiffs in the cross bills could not recover; which the court refused to do, but compelled him to proceed with his defense to the cross bills. After a hearing on the merits, the court declared the chattel mortgage and deeds of trust made by Boland and wife fraudulent, and set them aside. When the attachments were levied, the sheriff took possession of several articles of personal property which had been put in the saloon by the mortgagee, and which belonged to him personally, and were in no way connected with the saloon, or the mortgage upon it. Prior to the levy the mortgagee had paid the rent of the building for half a month, at the rate of $200 per month. When the receiver came in on June 3d, he took possession of the room then in charge of the sheriff, the rental of which had been paid in advance by Ross, and used it to store the property in his hands for the full time paid for by Ross. After Ross was turned out, he was compelled to pay a gas bill for gas consumed by the receiver, the amount having been charged in a bill for gas consumed by him. The value of Ross' property taken was $15; the rent paid by him, which the receiver got the benefit of, $73.25; gas bill paid, $2.52, — aggregating $90.77. The facts were set out in a motion before the court for an order on the receiver for the value of his goods taken, the use of the storeroom, and for the gas bill paid. The facts were not disputed on the trial of the motion, when the court heard the evidence; but the court denied the motion, and ordered the proceeds of the property turned over to the attachment creditors, and denied an allowance for the rent and gas bill paid. In due time the defendant Michael Ross filed his motions for a new trial and in arrest of judgment, which were overruled, and he perfected his appeal to this court.

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