Farmers' Cooperative Co. v. Bank of Leeton

CourtUnited States State Supreme Court of Missouri
Citation4 S.W.2d 1068
Docket NumberNo. 26384.,26384.
Decision Date24 March 1928
4 S.W.2d 1068
BANK OF LEETON, Appellant.
No. 26384.
Supreme Court of Missouri. Division Two.
March 24, 1928.

Transferred from Kansas City Court of Appeals.


Nick M. Bradley and M.D. Aber for appellant.

(1) The original petition did not state a cause of action. (a) Because it affirmatively appeared therefrom that the plaintiffs therein named had an adequate remedy at law. 21 C.J. 35; McKee v. Allen, 204 Mo. 673; Benton County v. Morgan, 163 Mo. 669; Schuster v. Myers, 148 Mo. 429; Somerville v. Hellman, 210 Mo. 575; Weston v. Fisher, 180 S.W. 1038; Thias v. Siener, 103 Mo. 523; Mallinckrodt Chemical Works v. Nemmich, 169 Mo. 395. Such legal remedy has been held to be by writ of attachment. Vaughan v. Tyler, 226 S.W. 163. Further, the petition averred on its face that the defendant had converted the stock of goods and then had it. Under those facts, the affidavit under Secs. 62-69, R.S. 1919, afforded an ample remedy whereby the property could have been brought into the assets of the estate. (b) Because it was multifarious. (2) The original petition failing to state a cause of action, and the amended petition, assuming that it did state a cause of action, which is denied, being filed more than ninety days after defendant took possession of the stock of goods, the bar of limitations provided by Sec. 2290, R.S. 1919, applied to all parties attempting to become plaintiffs therein. Bricken v. Cross, 163 Mo. 449; Hiller v. Schulte, 184 Mo. App. 42; Douglas Candy Co. v. Schenk, 195 Mo. App. 592. (3) Even though it be held that as to the plaintiffs in the original petition filed, the statute was tolled, it could only be tolled as to them, and subsequent persons, acting for the first time as to themselves, are barred. Sec. 2290, R.S. 1919; Douglas Candy Co. v. Schenk, 195 Mo. App. 592. (4) Plaintiff's action, being for a receiver, counts upon the rights given under Section 2287, and under that section plaintiffs have no rights except for such goods as they can identify as having been sold by them, and as they could identify none, their action fails. Sec. 2287, R.S. 1919; Riley-Penn Oil Co. v. Symmonds, 195 Mo. App. 116; Vaughan v. Tyler, 206 Mo. App. 1; Joplin Supply Co. v. Smith, 195 Mo. App. 224. The proviso at the end of Section 2287 that nothing in the act should be construed to give any creditor (or other person) any right to or lien on any merchandise or article in any stock except that sold and delivered by such creditor (or other), must have some meaning. This court has repeatedly held that the proviso did not apply to actions by attachment or to proceedings under execution or garnishment. It must then, not only by elimination but also by sheer necessity, apply to this sort of proceeding. Otherwise it would be wholly ignored, and be in effect repealed by judicial legislation, a thing abhorrent alike to the bench, the bar and the public. Authorities above; Henry v. Evans, 97 Mo. 52; Macke v. Byrd, 131 Mo. 690; Drainage District v. Jamison, 176 Mo. 557. And this is true particularly of the statute under consideration. Balter v. Crum, 199 Mo. App. 386. (5) The giving of the chattel mortgage was not such a transfer as is within the provisions of the Bulk Sales Law, Secs. 2286, et seq., R.S. 1919. 27 C.J. 883, citing Farrow v. Farrow (Ark.), 206 S.W. 134; Avery v. Carter (Ga.), 89 S.E. 1051; Packing Co. v. Uncaphor, 156 N.W. 171; Mills v. Sullivan (Mass.), 111 N.E. 605; Wasserman v. McDonnell (Mass.), 76 N.E. 959; Hannah v. Richter Brewing Co. (Mich.), 112 N.W. 713, 119 Am. St. Rep. 674; Schwartz v. Realty Co. (N J.), 109 Atl. 567; Noble v. Grocery Co. (Okla.), 46 L.R.A. (N.S.) 455; Dill v. Ebey (Okla.), 46 L.R.A. (N.S.) 440; Drinkle v. Shoe Co., 20 B.C. 314. (6) It was error to include the claim of Fred Stone in calculating amounts to be awarded plaintiffs. He had abandoned his claim by dismissal. 1 C.J. 1169; Sec. 1410, R.S. 1919.

Montgomery & Rucker, S.J. Caudle, J.R. Rothwell and W.E. Owen for respondents.

(1) The demurrer to the original petition, to the amended petition and to the amendments making additional parties plaintiff, should not have been sustained, and appellant is not in position to complain of the action of the court for several reasons. (a) Because no exceptions to the action of the court in overruling the demurrer or demurrers is shown to have been preserved either in the bill of exceptions or the record proper. (b) The only demurrer set out in the abstract of the record is to the amended petition, and clearly that should have been overruled. No exceptions to the action of the court were preserved. (c) The record does not set out any other demurrers to making other parties plaintiff, hence this objection cannot be considered. (d) Appellant does not point out wherein first or amended petition fails to state a cause of action, but merely asserts that they do not. Where no exceptions have been saved to the action of the court, the objections cannot be considered on appeal. (2) The Bulk Sales Law should be liberally construed "so as to effectuate the true intent and meaning" of the General Assembly. Sec. 7048, R.S. 1919; Turner v. Drees Co., 207 Mo. App. 582. (3) A creditor's bill in equity to declare the chattel mortgage fraudulent as against creditors and to declare the defendant a trustee for the creditors of Mohler was a proper proceeding in this case. (a) Practically all the creditors of Mohler except the defendant joined in the bill as plaintiffs. Each creditor joining had secured judgment in the probate court, establishing his or its claim as a just debt. Each had a right to have the chattel mortgage declared fraudulent and void. It is conceded that each one might have instituted an attachment suit and levied on the property or garnished the defendant after he sold the property of the decedent, but they did not have to do this with its multiplied costs and priorities. Equity will often take jurisdiction of purely legal matters to prevent a multiplicity of suits, and in one proceeding settle all the rights and interest of the parties. This is but common learning. Here the plaintiffs all had one common right after their claims had been reduced to judgment and that was to have the property subjected to their judgment claims. Their interests were legally the same, and this situation furnishes a luminous example of the interposition of a court of equity to furnish one remedy the same to all creditors, and create the defendant vendee a receiver for all of the creditors. (b) An administrator or heir cannot challenge a chattel mortgage or other conveyance by the deceased as fraudulent as against creditors and recover the property for the purposes of administration. Such conveyance can only be set aside at the instance of the creditors. The debtor having died and his estate being admittedly insolvent and without assets, the probate court could grant no further relief than to render judgment for the true amount of the claims of each creditor. The creditors could issue no execution against the dead man's estate or property. They properly joined in a creditor's bill attacking the conveyance to defendant as fraudulent by reason of its terms permitting the decedent to remain in possession and sell the merchandise in the regular course of his business and to retain the proceeds of the sales, and under the Bulk Sales Law. Lyons v. Murry, 95 Mo. 28; Merry v. Fremon, 44 Mo. 518; Pendleton v. Perkins, 49 Mo. 565; Jackson v. Robinson, 64 Mo. 292; George v. Williamson, 26 Mo. 190; Steele v. Reid, 284 Mo. 285; Hall v. Callahan, 66 Mo. 316; Zoll v. Sopher, 75 Mo. 460. (c) It is true that in St. Francis Mill Co. v. Sugg, 169 Mo. 136, a conveyance of land was set aside at the suit of creditors as fraudulent as against creditors, and that the administrator thereupon applied for and secured an order of probate court to sell the same and did sell and receive the proceeds thereof and that this action was approved as legal. The situation here is however radically different from that in the Sugg case. In this case the probate court upon the application of the administrator, and before a single claim of the plaintiffs had been probated, made an order for the sale of the equity of redemption in the mortgaged property, and the sale was effected for the magnificent sum of $25. We take it that thereby the estate parted with any right to have the property if recovered or the proceeds thereof covered into the estate and administered by the administratrix. Furthermore it is a rule of equity in such proceedings that those who first bring suit to set aside a fraudulent conveyance have the first right as creditors to share in the proceeds recovered. Jackson v. Robinson, 64 Mo. 292. The circuit court then was the only forum that had jurisdiction to try and decide whether the conveyance to defendant by deceased in his lifetime was fraudulent as against creditors. Having done so and found for the plaintiffs that court could, based upon the creditor's bill in equity, declare the defendant a receiver or trustee for the plaintiff creditors, and give full and complete relief and administer and distribute the proceeds recovered. (4) Taking possession of a stock of goods under a chattel mortgage, without complying with the provisions of the Bulk Sales Law, is such a disposition of property as comes within the provisions of said law. Such mortgage is fraudulent as to creditors, and this is true regardless of the intention of the parties, and regardless of the honesty of the debt secured, if action is taken within the ninety-day limit after taking possession of the property. Vaughan v. Tyler, 206 Mo. App. 1; Semmes v. Brewing Co., 195 Mo. App. 621; Joplin Supply Co. v. Smith, 182 Mo. App. 212; Olean M. Co. v. Tyler, 208 Mo. App. 430. (5) The Bank of Lecton had the right to act as it did and replevin the mortgaged property and sell the same without coming into the probate court...

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