Hargadine-McKittrick Dry Goods Co. v. Sappington
| Decision Date | 15 February 1904 |
| Parties | HARGADINE-McKITTRICK DRY GOODS CO., Appellant, v. SAPPINGTON & RENSHAW et al., Respondents |
| Court | Kansas Court of Appeals |
Appeal from Moniteau Circuit Court.--Hon. Jas. E. Hazell, Judge.
REVERSED AND REMANDED (with directions).
Judgment reversed and cause remanded.
Moore & Williams for appellant.
(1) Section 415 of the Revised Statutes as to settlement of priorities in attachments, is construed by the Supreme Courtin its general application. Stephenson v. Stationery Co., 142 Mo. 13; Drake on Attachments, 455; Talbot v. Harding, 10 Mo. 350; Prichard v. Toole, 53 Mo. 358; Harris v. Harris, 25 Mo.App. 501. (2) The money was not borrowed of the bank for the firm, and if it had been, the bank could not claim a prior lien to that of the firm creditors. Farmers Bank v. Bayliss Hudgers, 35 Mo. 428; Farmers Bank v. Bayliss, 41 Mo. 274; Hill v. Bell, 111 Mo. 35; Hundley v Farris, 103 Mo. 79; Goddard-Peck Grocery Co. v McCune, 122 Mo. 426; Level v. Farris, 24 Mo.App. 445; Skavdale et al. v. Moyer, 46 L. R. A. 480. (3) In the case at bar, H. B. Sappington filed his motion verified by affidavit, for the distribution of the firm assets to firm creditors, and not to the Moniteau National Bank, the individual creditor of Renshaw. He had the right to this, though it was not absolutely necessary, the assets of the insolvent firm being in the receiver's hands for administration. Freedman v. Holberg, 89 Mo.App. 340. (4) The appointment of a receiver did not change the rights of attaching creditors of the firm. Their attachment lien was superior to that created by a prior attachment of the same property by the Moniteau National Bank--an individual creditor of Renshaw, one of the partners of the firm. First National Bank v. Brenneisen, 97 Mo. 145. This case is nearly on all fours with case at bar.
R. M. Embry for respondent.
(1) It is conceded by all parties that an attachment by garnishment was proper, and that attachments first in point of time must be first paid. Westheimer & Sons v. Giller, 84 Mo.App. 122; Stephenson v. Stationery Co., 142 Mo. 13. (2) The attachment of the appellant was abandoned, when it, through attorneys, applied for and secured the appointment of a receiver. 3 Am. & Eng. Ency. of Law (2 Ed.), 239; Mooney v. Kavanaugh, 4 Me. 277; Bowley v. Bowley, 41 Me. 542; Gathercole v. Bedel, 65 N.H. 211. (3) In order to give partnership creditors priority over individual creditors, the objecting partners must make an exhibit of the partnership assets and furnish the court with a list of the partnership creditors and a statement of their claims. There was nothing of this kind in this case. Edwards & Son Brokerage Co. v. Rosenheim, 74 Mo.App. 626; Bates on Partnership, section 820; Reyburn v. Mitchell, 106 Mo. 365; Goddard-Peck Grocery Co. v. McCune, 122 Mo. 426; Hardware Co. v. Randell, 69 Mo.App. 345.
The mercantile partnership of Sapington & Renshaw became insolvent and they committed acts which caused several of their creditors to attach the partnership property. One of these partnership creditors was plaintiff, the Hargadine-McKittrick Dry Goods Company. The defendant, Moniteau National Bank, was an individual creditor of Renshaw. The bank levied an attachment for Renshaw's individual debt, on the partnership property prior to the levy made by either of the partnership creditors. The attachments were all confessed. The partnership had given a chattel mortgage on the property before any of these proceedings and it was about to be foreclosed at a great sacrifice and to the injury of creditors. The partnership attaching creditors then filed an application with the judge of the circuit court in vacation asking the appointment of a receiver, in which the defendant Moniteau National Bank was made a party. A receiver was appointed who took charge of the property and sold it. This contest is over the proceeds of that sale and involves a question of priority; that is, whether the defendant bank as individual creditor with prior attachment, can be preferred to a partnership creditor with subsequent attachment. The plaintiff Hargadine-McKittrick Dry Goods Co. were the last in point of time to levy their attachment and if the claim of defendant bank is to be preferred there will be nothing left for them; and hence the contest here is chiefly between them as partnership creditors and the bank as an individual creditor. The bank claimed that the greater part of the debt owing to it was used by Renshaw to purchase his interest in the partnership, and that therefore it had a lien for this purchase-money. The trial court, as near as we can gather from the somewhat imperfect record, took that view and ordered that the bank, under its prior attachment, be first paid. Plaintiffs appealed.
The bank makes a double claim: first, that having the prior attachment which passed into judgment, it is entitled to preference. This we reject as unsound. Bank v Brenneisen, 97 Mo. 145, 10 S.W. 884. And second, that its claim being for money borrowed by the individual partner which he used in purchasing his interest in the partnership,...
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