Green v. Conrad

• Decision Date: 14 March 1893
• Citation: 114 Mo. 651,21 S.W. 839
• Parties: GREEN v. CONRAD et al.
• Court: Missouri Supreme Court

21 S.W. 839

114 Mo. 651

GREEN v. CONRAD et al.

Supreme Court of Missouri, Division No. 2.

March 14, 1893.

ASSIGNMENT FOR BENEFIT OF CREDITORS — APPEAL BONDS — PARTIES — COUNTERCLAIM.

1. An assignee for the benefit of creditors takes the assigned estate subject to all offsets existing at the time of the assignment.

2. Where, after the death of the principal obligor on a bond, suit is brought on the bond against the sureties, the principal's executor may on application be allowed to become a party defendant.

3. Under Rev. St. 1889, § 2050, which gives the defendant "in an action arising on contract" the right to counterclaim "any other cause of action arising also on contract and existing at the commencement of the action," when principal and sureties on an appeal bond are sued on the bond, they may plead as a counterclaim a judgment obtained by the principal obligor against the obligee in the bond upon a debt existing at the time the judgment appealed from was rendered.

4. An action on an appeal bond is "an action arising on contract," within the meaning of said statute, even though the judgment appealed from was rendered for a tort, since the tort becomes merged in the judgment.

5. The fact that a creditor of an insolvent does not present his claim to the assignee for allowance does not bar him from asserting it as a counterclaim when sued by the assignee upon a debt due by him to the insolvent.

Appeal from St. Louis circuit court; Daniel Dillon, Judge.

Action by Charles Green, assignee of the Keokuk Northern Line Packet Company, against Peter Conrad, Christopher Sharp, administrator with the will annexed of Peter Lehman, deceased, and Frank L. Johnson, executor of William F. Davidson, deceased, to recover upon three appeal bonds. Defendants obtained judgment. Plaintiff appeals. Affirmed.

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

The Keokuk Northern Line Packet Company was a corporation created under the laws of Missouri, and for some years prior to 1880 was engaged in the transportation of passengers and freight between St. Louis and St. Paul on the Mississippi river. On the 28th of October, 1880, James Ward et al. recovered judgments in the St. Louis circuit court against William F. Davidson et al. for $1,952, against Davidson alone for $3,435, and against William F. and Peyton S. Davidson for $20,081. The decree went further, and removed William F. Davidson, who was president of the said packet company, from his position as president and director, and ordered an election to fill his place. The court also appointed Samuel Clubb as receiver of the company. Appeals were taken from each of said judgments, and three general supersedeas bonds were given, and approved by the court. In each of said bonds William F. Davidson was principal and Peter Conrad and Peter Lehman were sureties. The causes were first appealed to the St. Louis court of appeals, where they were affirmed pro forma, and then appealed to this court, the said sureties consenting in writing that their obligations on the bonds for appeal to the court of appeals should continue and bind them on appeal to this court. Upon a hearing in this court, April term, 1886, the final decree of the circuit court was affirmed, but the judgment was reversed and remanded, to the end that a final decree might be entered in the circuit court in accordance with certain modifications in the amounts made in this court. Ward v. Davidson, 89 Mo. 445, 1 S. W. Rep. 846. On the 15th January, 1881, the packet company became insolvent, and on that day made an assignment to Charles Green, for the benefit of its creditors, under the laws of Missouri. He qualified as such, and has ever since been the assignee of the corporation. Clubb, who was appointed receiver in 1880, was discharged in 1888, and ordered to turn over all assets in his hands to Green, the assignee. When the decree and judgment above referred to were rendered by the circuit court, — October 28, 1880, — the said William F. Davidson was the owner of nine promissory notes made by said packet company, a statement of which is given in the record. These notes were dated on different days, commencing with December 10, 1879, and ending with October 28, 1880, and aggregate at their face $27,092.11. These notes have not been paid. When they were executed the said packet company was running a line of packets between St. Louis and St. Paul, engaged in the transportation of freight and passengers. On or about the 7th of October, 1884, the said William F. Davidson, being a resident of Minnesota, and the packet company having a residence and place of business in St. Paul, in said state, brought suit against the company on said notes in the district court of Ramsey county, Minn. The company was duly served with process, and on the 26th day of March, 1885, a judgment against the company and in favor of Davidson upon said notes for the principal and interest thereof was rendered for the sum of $45,778.56 and costs. The judgment is unsatisfied. And on the 19th of March, 1887, said William F. Davidson, by leave of court first obtained, brought suit against said packet company in the circuit court of the city of St. Louis upon said Minnesota judgment, and, service being had on the company, obtained judgment against it on the 10th day of May, 1887, by default, for $51,626.95. No appeal was taken from this judgment, and it remains unsatisfied. This judgment is set forth in record.

The appellant, as assignee, gave due notice by publication and by mail to the creditors of the corporation, and, among others, to the said William F. Davidson, of his intention to hear and allow demands against the estate of the said corporation, as required by law, and proceeded to hear and allow demands, but neither the said William F. Davidson, who was then living, presented, nor did the executors of his will, after his death, present, either the said notes of the said judgments, or either of them, in his favor, above referred to, for allowance against said assignee. The assets of said assigned estate were wholly inadequate to pay the claims which were allowed against the estate in full, and no dividend has been paid on any of the allowed claims. On March 22, 1890, the appellant, as assignee of said corporation, filed three suits in the circuit court of the city of St. Louis against Peter Conrad and the administrator with will annexed of said Lehman, Conrad and Lehman being sureties in the appeal bonds given as above stated. None of the principals were sued. The actions were for the penalties of the bond to be satisfied by executions for the amounts of three judgments in the circuit court, rendered in pursuance of the judgment of this court. The court ordered them consolidated. After the causes were consolidated, Frank L. Johnson, the executor of William F. Davidson, was, on his motion, made a party defendant, and filed an amended answer to the consolidated case. The answers of Conrad and Lehman, after admitting the execution of the several bonds by them as sureties, the affirmance of the judgments against their principals, proceeded to charge the indebtedness of the packet company to William F. Davidson, and the rendition of the judgment in his favor therefor, and claimed the right by and with the consent of his executor to insist upon that indebtedness as an offset or counterclaim to the demand of plaintiff, the assignee of said packet company. The plaintiff moved to strike out all the portion asserting the counterclaim, but the court overruled his motion, and he excepted. The executor, Johnson, also pleaded said judgment and indebtedness in favor of his testator as a counterclaim. This the court refused also to strike out, on motion of plaintiff, and be excepted. To these answers plaintiff replied. To the answers of Conrad Lehman and of Johnson, the executor, he admitted that Davidson had recovered judgment in Ramsey county, Minn., for $45,778.56, March 26, 1885; that afterwards, by leave of the St. Louis circuit court, he sued said packet company on said judgment, and recovered judgment May 10, 1887, for $51,626.95. But he denied the right of defendants to a set-off or counterclaim for said judgment, because he had duly notified Davidson of the day for the allowance of claims, and he had refused to present said judgment for allowance, and therefore asserted he was barred. Further replying, he asserted that the judgments of the packet company grew out of Davidson's misappropriation of the assets of the company while president, and misconduct and abuse of his trust. He further alleged that Davidson's estate was entirely solvent, and that, if this claim was allowed, no other creditor would receive any part of the assets misappropriated by him. The court, on motion of defendants, struck out the special new matter averred in the reply, and plaintiff excepted. The cause was heard on an agreed statement of facts, which appears in full in the record on file.

Plaintiff asked the court to give the following instructions; that is to say: (1) "The court declares the law to be that upon the pleadings and the evidence plaintiff is entitled to recover against defendants Peter Conrad and Christopher Sharp upon the three bonds sued upon in this cause as consolidated; that the damages which the plaintiff has sustained and is entitled to recover by reason of the breach of the bond sued upon in cause originally numbered 82,060 is the sum of $2,403, with interest from April 12, 1887, at six per cent. per annum to date; that the damages which the plaintiff has sustained and is entitled to recover by reason of the breach of the bond sued on in cause originally numbered 82,058 is the sum of $7,800." (2) "The court declares the law to be that upon the pleadings and the evidence the defendants are not entitled to the offsets set up in their answers." The court gave the first and refused the second of these instructions. To the...