Hungerford v. Greengard

• Decision Date: 22 July 1902
• Parties: HUNGERFORD v. GREENGARD et al.
• Court: Missouri Court of Appeals

69 S.W. 602

95 Mo. A. 653

HUNGERFORD v. GREENGARD et al.

Court of Appeals at St. Louis, Missouri.

July 22, 1902.

FRAUDULENT CONVEYANCE — EVIDENCE — GARNISHMENT — MONEY IN TRUSTEE'S HANDS — ANSWER.

1. A trustee in a deed to secure certain preferred creditors of an insolvent firm took possession of its assets, and proceeded to carry on the business as before, buying new material, manufacturing goods, and filling orders, and doing other acts in continuation of the old business. It appeared that he made statements to a creditor that he expected soon to realize sufficient to pay all the creditors in

full. These facts are held sufficient proof of fraudulent intent to sustain a judgment that the conveyance to the trustee was intended to hinder or delay creditors.

2. Facts in regard to prosecution of a business to protect insolvents, and for their use, would render a conveyance void under the statute of fraudulent conveyances if expressed on the face of the instrument; would likewise render it void if found to be in fact a part of the agreement of the parties interested in the transfer, although not expressed.

3. Whether or not a conveyance is made with the intent to hinder or delay creditors is a question of fact on the facts above stated.

4. Garnishment will reach funds in the hands of a trustee for creditors where the deed under which he claims was fraudulent as to other creditors not embraced within the terms of the instrument.

5. Where the denial of the answer of a garnishee is amended by leave after an appeal to the circuit court, the ruling is not a proper subject of review on appeal unless brought to the notice of the trial judge by some motion after verdict.

(Syllabus by the Judge.)

Appeal from St. Louis circuit court; Wm. Zachritz, Judge.

Action by U. T. Hungerford against Morris D. Greengard and others. Judgment for plaintiff, and defendant Henry J. Joel, garnishee, appeals. Affirmed.

D. P. Dyer and R. T. Stillwell, for appellant. Jos. Wheless, for respondent.

BARCLAY, J.

This is a garnishment case, based upon an attachment against Messrs. Greengard and Ehrlich, partners under the name of Greengard & Ehrlich Manufacturing Company. The attachment was brought before a justice of the peace. Mr. Joel, trustee (the appellant now), was summoned as garnishee. The grounds of the attachment, to state them shortly, were the fraudulent transfer of property so as to hinder or delay, etc., and concealment and removal of assets, and other grounds unnecessary to mention. Before the justice there was a judgment sustaining the attachment and adjudging a recovery for plaintiff against defendants for $206.11. The garnishee, Mr. Joel, answered the statutory interrogatories by denying all indebtedness to the principal defendants. He also denied that he had in his possession any of their property or effects. The plaintiff denied the answer of the garnishee, and charged that the latter was trustee under a deed of trust executed to him by Mr. Greengard, partner in the Greengard & Ehrlich Manufacturing Company, and that the trustee had in his possession the entire property and assets of the attachment defendants. Plaintiff further charged "that the said deed of trust is void and ineffective in law to convey the said property and effects by reason of the illegal and fraudulent provisions of the said pretended deed of trust, and the plaintiff joins issue with the said garnishee upon the said answer." There was a judgment for plaintiff against the garnishee before the justice of the peace, who found $500 to be in the hands of the garnishee. The latter took an appeal to the circuit court. In the latter court plaintiff asked leave to amend his denial of the garnishee's answer before the trial by inserting the words "and by reason of the illegal acts of the said trustee under said deed of trust." To this the garnishee objected, and, his objection being overruled by the court, and the amendment allowed, the garnishee at the time excepted. The cause came to trial before Judge Zachritz, a jury having been waived. Plaintiff gave evidence tending to show that shortly after the execution of the deed of trust of January 31, 1898, the trustee, in response to an inquiry in regard to a claim against the manufacturing company, said that he was in charge of the property under the deed of trust; was hopeful that he could pay in full not only the secured creditors, but all the other creditors of the concern; that he was conducting the business right along; had it in pretty good shape; hoped to be able to pay everything before a great while. The testimony for plaintiff further tended to...