Goodwin v. Kerr

• Decision Date: 31 October 1883
• Citation: 80 Mo. 276
• Parties: GOODWIN et al., v. KERR; SCARRITT, Interpleader, Appellant.
• Court: Missouri Supreme Court

80 Mo. 276

GOODWIN et al.,

v.KERR; SCARRITT, Interpleader, Appellant.

Supreme Court of Missouri.

October Term, 1883.

Appeal from Jackson Circuit Court.--HON. F. M. BCK Judge.

REVERSED.

Botsford & Williams and Scarritt & Scarritt for appellant.

Fraud, to have the effect to vitiate the assignment must exist at the time the assignment is made. Shep. Touch., 67; Bump Fraud. Conveyances, (3 Ed.) p. 359, and cases cited. The acts of the assignor and assignee, after the assignment had been executed, acknowledged and recorded, either in refusing to carry it into further effect or attempting to rescind and abandon it, did not destroy the trust in favor of the creditors, or operate to divest the title out of the assignee and re-vest it in the assignor. Gates v.Lebeaume, 19 Mo. 17; Hardcastle v. Fisher, 24 Mo. 70; Pinneo v. Hart, 30 Mo. 561; Crow v. Beardsley, 68 Mo. 438; Hatcher v. Winters, 71 Mo. 30; Read v. Robinson, 6 Watts & Serg. 329; Seal v. Duffy, 4 Barr (Pa.) 274; Mark's Appeal, 85 Pa. St. 231; Alpaugh v. Robinson, 27 N. J. Eq. 96; Burrill on Assign., (3 Ed.) §§ 266, 267, 268, 269, 296, 297, 298. Retention of the assigned property by the assignor did not render the assignment void, an assignment for benefit of creditors not being within the 10th section of our statutes concerning fraudulent conveyances. Keeler v. Tutt, 31 Mo. 307; Benjamin on Sales, p. 1; Chitty on Contracts, (11 Ed.) p. --; Burrill on Assign., § 4; State v. Benoist, 37 Mo. 500; Crow v. Beardsley, 68 Mo. 438; N. Y. Rev. St. 1845, chap. 10, p. 127.

Lathrop & Smith with James Gibson for respondent.

Transfer of the possession of the property to the assignee is essential to the validity of an assignment for the benefit of creditors. Edwards v. Harben, 2 Term. Rep. 587; Burrill on Assign., (3 Ed.) chap. 29, p. 360; Ib., p. 517; Wordall v. Smith, 1 Camp. 332; Rogers v. Vail, 16 Vt. 327; Cunningham v. Neville, 10 S. & R. (Pa.) 251; Beers v. Lyon, 21 Conn. 604, 615; Ramsey v. Stevenson, 5 Martin (La.) O. S. 23; Hughes v. Ellison, 5 Mo. 463; Hatcher v. Winters, 71 Mo. 30, 35. “Every sale” mentioned in section 2505 of Revised Statutes, covers “every assignment,” and if it does not, the common law requires possession to accompany every transfer of personal property, and assignments are but conveyances for special purposes. Hamilton v. Russell, 1 Cranch 309; Lowenstein v. Flamand, 82 N. Y. 494, 497. The third, fourth, fifth and sixth instructions for plaintiff are proper. Burrill on Assign., (3 Ed.) §§ 344, 346; Reed v. Pelletier, 28 Mo. 173; State v. Benoist, 37 Mo. 500; Burgert v. Borchert, 59 Mo. 80; Caldwell v. Williams, 1 Ind. 405; Flanigan v. Lampman, 12 Mich. 58.

HENRY, J.

Plaintiffs sued Kerr by attachment in the special law and equity court of Jackson county, and the attachment was levied upon a stock of goods, (queensware, etc.,) in a storeroom in Kansas City occupied by Kerr as a retail dealer in such goods. Scarritt interpleaded, claiming the goods under an assignment made to one Wm. H. Watts, by Kerr, for the benefit of his creditors, Scarritt having been appointed assignee by the circuit court of Jackson county, to which, by agreement, the cause was transferred.

At the trial it appeared that after the assignment was executed and recorded, Watts proceeded to take an inventory of the goods, but before concluding it Kerr told Watts to discontinue it, as he, Kerr, had been badly advised to make the assignment, and thereupon Watts, an attorney, having advised the assignment, refused to act as assignee, and restored, if he in fact ever had, the possession of the goods to Kerr, who afterward, as before the assignment, sold them at retail and appropriated the proceeds of sales as he thought proper. This continued from about the 5th or 6th of August until the first attachment in this cause was issued. When that attachment was levied, Watts had refused to act and Scarritt had not been appointed in his stead, and Kerr was in possession.

It is unnecessary to make a detailed statement of the evidence, or to embody in this opinion all the instructions given and refused. For plaintiffs seven were given; fourteen asked by interpleader were refused, and four were given by the court of its own motion.

In the first and seventh given at the plaintiffs' instance, the jury were told in substance that if Watts, the assignee, did not take actual possession of the goods, or if his possession was not visible, continued and exclusive against Kerr, the assignment was void, or if after the assignment and prior to the date of the attachment and before Watts had taken full control and management of said goods, or before Watts had filed his bond and completed an inventory of the goods it was agreed by Kerr and Watts that the assignment should be disregarded, and the possession and control and disposal of the goods should be with Kerr, who was so in possession of the goods at the date of the attachment, then the interpleader could not recover. Two important propositions of law are contained in these instructions, either of which, if correct, is decisive of this case against the interpleader.

It is first asserted that the retention of the goods assigned by the assignor after the assignment, is per se fraudulent and renders the assignment void. Second, that after an assignment is made with however honest an intent, the assignor and assignee may, by their fraudulent conduct with regard to the property, or by an agreement between them that the assignment should be disregarded and held for naught, followed by a surrender of the possession of the assigned goods by the assignee to the assignor, invalidate the assignment.

As to the first proposition Mr. Burrill, in his work on Assignments, says: “The predominant rule in the United States appears to be that possession must accompany and follow a deed of assignment by a debtor and the possession of the assignor after the transfer, unless explained, will render the assignment void as against creditors.” 402, § 277. That “possession is only prima facie and not conclusive evidence of fraud; and that it may always be explained so as to show the transfer to have been bona fide and upon sufficient consideration.” Ib., 393, § 273. It must be conceded that this is the law in this State, unless our statute, (§ 10, Wag. Stat., 281,) is applicable to assignments. It provides that: “Every sale made by a vendor of goods and chattels in his possession or under his control, unless the same be accompanied by delivery in a reasonable time, (regard being had to the situation of the property,) and be followed by an actual and continued change of the possession of the things sold, shall be held to be fraudulent and void as against the creditors of the vendor and subsequent purchasers in good faith.” If an assignment is included in the term ““sale,” the instructions of the court on this subject were correct declarations of law. Is an assignment a sale within the sense of section 10, supra? In Kuykendall v. McDonald, 15 Mo. 418, Judge Scott delivering the opinion of the court, observes: “This revives the old question, whether the continuing in possession of personal property after a sale is a fraud in law, and so to be declared by the court. * * The contrariety of opinion entertained by different courts and the conflicting views in the same courts, in relation to this question, induced the legislature at the late session to interfere and settle it definitely. It was hoped this had been done *...