Bullene v. Smith

• Decision Date: 31 October 1880
• Citation: 73 Mo. 151
• Parties: BULLENE v. SMITH et al., Appellants.
• Court: Missouri Supreme Court

73 Mo. 151

BULLENE

v.SMITH et al., Appellants.

Supreme Court of Missouri.

October Term, 1880.

Appeal from Jasper Circuit Court.--HON. JOSEPH CRAVENS, Judge.

REVERSED.

C. A. Winslow for appellants.

A fraudulent conveyance and a fraudulent disposition of property do not mean the same thing in the attachment law. How far proof of the one would establish the other would depend entirely on circumstances outside of the conveyance. Fraudulent disposition is something akin to fraudulent concealment or removal, and is placed in the same category. The statute has very carefully classified the grounds of attachment. There is no necessary relation between a fraudulent conveyance and fraudulent disposition, because the statute has made each the representative of a distinct class of frauds. The object of the statute evidently was to reach all manner of frauds upon creditors, and, to accomplish this satisfactorily, resort was had to classification. The seventh and ninth clauses embrace fraudulent conveyance--a class of frauds well defined in the law. Beyond these, and not embraced within the legal term, were other fraudulent dispositions of property by removal, concealment and the like, which fall within the eighth and tenth clauses. This case presents an instance of a fraudulent conveyance--made so by statute--within the seventh clause, which cannot be called a fraudulent disposition within the eighth; otherwise, the statutory classification is meaningless--mere distinction without a difference. Field v. Liverman, 17 Mo. 218; Powell v. Matthews, 10 Mo. 49.

Smith & Krauthoff for respondents.

RAY, J.

This was a suit by attachment in the circuit court of Jasper county, Missouri, instituted by the respondents against the appellants, and made returnable to the March term, 1876. The petition, which is in the ordinary form, was filed October the 19th, 1875, and is based on five promissory notes dated October 14th, 1875, due one day after date, and aggregating $703.66.

On October 20th, 1875, respondents, by their agent, R. E. Watson, filed an affidavit for an attachment against appellant, Cyrus Smith, in said cause, which, after stating the amount of the demand in the usual form, proceeds as follows: “And the affiant further states, that he has good reason to believe and does believe that Cyrus Smith, one of the above named defendants, is about to remove his property and effects, and the property and effects of the firm of Smith & Romine, of which he is a member, out of the State of Missouri, with the intent to defraud, hinder or delay his creditors, and the creditors of said firm, in the collection of their debts; that the said Cyrus Smith, one of said defendants, is about fraudulently to convey and assign his property, and the property of the firm of Smith & Romine, of which he is a member, so as to hinder and delay his creditors, and the creditors of said firm; that the said Cyrus Smith, one of said defendants, has fraudulently removed and disposed of, and is about to dispose of his property, and that of the firm of Smith & Romine, of which he is a member, so as to hinder and delay his creditors, and the creditors of said firm.”

On this affidavit a writ of attachment was issued, in the usual form, dated October 20th, 1875; which was, on the same day, levied on a saloon and fixtures in Carthage, Missouri, as the property of Smith & Romine, an inventory of which is returned with the writ. The writ was made returnable to the March term, 1876. At the return term the defendant Smith filed a plea in the nature of a plea in abatement, verified by affidavit, putting in issue the truth of the facts alleged in the affidavit on which the attachment was sued out. At the September term, 1877, of said court, the issues arising on said affidavit and plea in abatement coming on for trial before a jury, the plaintiffs, in order to sustain the issues on their side, first introduced a number of witnesses as to the conduct and transactions of defendants prior to the institution of this suit, (which had reference mainly, if not exclusively, to matters and things then wholly past and terminated,) and then offered and read in evidence to the jury the following chattel mortgage:

Know all men by these presents, that we, Smith & Romine, both of the county of Jasper in the State of Missouri, for and in consideration of the sum of $1,200 in hand paid by H. S. Lamb, of the county of Jasper in the State of Missouri, have this day sold to the said H. S. Lamb the following described personal property, to-wit: All the stock now on hand, the fixtures and entire paraphernalia now situate in the saloon in the city of Carthage, Jasper county, Missouri, and more particularly known as the “Carthage Exchange.” To have and to hold the property herein conveyed forever, upon the express condition, to-wit: That whereas, the said Smith & Romine, as a firm, did, on the 16th day of October, 1875, make, execute and deliver to the said H. S. Lamb their certain promissory note in their firm name, which said note is in words and figures following, to-wit:

CARTHAGE, Mo., October 16th, 1875.

Twelve months after date, we promise, for value received, to pay to the order of H. S. Lamb the sum of $1,200, with interest from date at the rate of ten per cent per annum.

(Signed)

SMITH & ROMINE.

Now, if the said Smith & Romine shall pay the said note with all interest thereon when the same shall become due and payable, and keep the possession of said stock and fixtures or their equal in value, and not allow the same to diminish in value, but at all times keep the same to the present standard, and not dispose of the same except across the counter in the usual trade, and keep and perform all the conditions of this mortgage, and surrender the possession of the same upon the breaking of any of the conditions of this mortgage, when the said Lamb shall so determine, then the said mortgage to be void, otherwise to remain in full force and virtue in law.

Witness our hands and seals this 16th day of October, 1875.

SMITH & ROMINE.

[SEAL.]

This mortgage bore date and was duly acknowledged on the 16th day of October, 1875, and was duly recorded in the proper office on the 18th day of October, 1875. As the decision of this case turns upon the character and effect of the mortgage in question, and upon its admissibility in evidence under the issues made by the affidavit and plea in abatement, together with the instructions and rulings of the court touching the same during and after the trial and issues before the jury, it is deemed unnecessary to give any of the evidence offered on the trial except the said mortgage as above set out. At the close of the testimony the court gave the following instructions at the instance of the plaintiffs: “If the jury believe from the evidence that the defendant Smith, on the 20th day of October, 1875, was about fraudulently to convey and assign his property and the property of the firm of Smith & Romine, so as to hinder and delay his creditors, or the creditors of said firm; or if the jury believe that defendant Smith fraudulently disposed of, or was about to dispose of his property or the property of the firm of Smith & Romine, of which Smith was a member, so as to hinder and delay his or their creditors, they will find the issues for the plaintiffs. If you find that the defendant was broken, involved in debt, insolvent or unable to pay his debts at the time he executed the chattel mortgage read in evidence, and that the consideration for the mortgage was that the mortgagee, H. S. Lamb, should confer pecuniary benefit on defendant by loaning him money to use beyond the reach of his creditors, and that such were the object and purpose of the defendant in making the mortgage, such transaction would be a fraud upon his creditors.” To which the defendants excepted.

The defendants then asked the court to give the following instructions: “The court instructs the jury that although they may believe that the chattel mortgage executed by Smith for the firm of Smith & Romine to H. S. Lamb, had the effect to hinder and delay the creditors of Smith and of said firm, yet, unless they further believe that said Smith executed said mortgage with a purpose and intent to defraud, hinder or delay his creditors, or the creditors of said firm, they should find for the defendant. The burden of proof in this case is on the plaintiffs, and unless the jury believe from the evidence that the plaintiffs have shown by the greater weight of testimony, that defendant Smith was at the time of issuing the attachment about to remove his property and effects out of the State of Missouri with the intent to defraud, hinder and delay his creditors, or that at said time defendant Smith was about fraudulently to convey and assign his property so as to hinder and delay his creditors, they should find for the defendant. The court instructs the jury that unless they believe from the evidence that on the 20th day of October, 1875, when the attachment was issued, the defendant Smith was about fraudulently to convey and assign his property, or the property of Smith & Romine, with intent to hinder or delay his creditors, or the creditors of said firm; or that the defendant Smith, on the 20th day of October, 1875, had fraudulently disposed of his property, or the property of said Smith & Romine, with intent to...