Hunter v. Mathewson

• Decision Date: 14 June 1910
• Citation: 129 S.W. 749,149 Mo. App. 601
• Parties: HUNTER v. MATHEWSON et al.
• Court: Missouri Court of Appeals

129 S.W. 749

149 Mo. App. 601

HUNTER v. MATHEWSON et al.

St. Louis Court of Appeals. Missouri.

June 14, 1910.

1. INJUNCTION (§ 38) — GROUNDS — PROTECTION PENDING LITIGATION — ACTIONS AGAINST STOCKHOLDERS—OVER RIGHT—INSOLVENCY OF DEFENDANT.

A mercantile company, of which defendants were stockholders, executed three notes to plaintiff, one for money loaned, and the other two being executed by defendants in the company's name for stock in the company, assigned by plaintiff to defendants, who then became the owners of the entire stock, and executed at the same time a trust deed on the company's realty. Thereafter the company made an assignment for creditors, and the assignee allowed the three notes as a demand upon its assets, whereupon plaintiff and the other creditors made an agreement by which the assignee should be allowed to sell the property covered by the trust deed, and plaintiff be permitted to apply to the assignee and court for an order to satisfy plaintiff's claim on notes as a preferred creditor out of the proceeds of the sale. Plaintiff thereafter instituted an action to recover from the assignee sufficient of the proceeds of the sale to discharge his notes, which the other creditors opposed, and judgment went against plaintiff. Pending his appeal to the Supreme Court, plaintiff brought this suit to restrain defendants from collecting allowances in their favor by the assignee, and from transferring such allowance pending plaintiff's appeal. Held, that the action could not be maintained because it was not shown that defendants were insolvent, so that plaintiff would be unable to collect from defendants anything owing him if his suit against the assignee failed.

2. CREDITORS' SUIT (§ 11)—CONDITIONS PRECEDENT—RECOVERY OF JUDGMENT.

The suit being in the nature of a creditors' bill, on the theory that the corporation is plaintiff's debtor, the action cannot be maintained because plaintiff has not established his demand by judgment against defendants.

3. CORPORATIONS (§ 550)—ASSIGNMENTS FOR CREDITORS—ACTIONS AGAINST ASSIGNEE — FOLLOWING ASSIGNED FUND.

Nor is the rule that the owner of a fund may follow it into the hands of an assignee for creditors or secure a lien on the assigned assets upon showing money passing to the assignee is not applicable to enable plaintiff to maintain the action, as no money belonging to plaintiff was assigned; that the money he paid in for capital stock of a corporation was used in purchasing some of the assigned property not making him a preferred creditor of the corporation, or of defendants, even if they owed him.

4. JUDGMENT (§ 663)—RES JUDICATA—PENDENCY OF APPEAL.

A decision in an action against an assignee for creditors of a corporation to recover sufficient of the proceeds of the sale of realty, on which plaintiff had a trust deed to secure notes, that plaintiff was not entitled to have the notes paid out of the corporation's assets, is binding in a subsequent suit by plaintiff to restrain the sole stockholders of the corporation, who executed the trust deed, from collecting allowances made in their favor by the assignee pending plaintiff's appeal to the Supreme Court from the judgment in the former case.

Appeal from Circuit Court, New Madrid County; Henry C. Riley, Judge.

Action by Lee Hunter against A. G. Mathewson and another. From a judgment for plaintiff, defendants appeal. Reversed.

Brown & Gallivan, for appellants. Oliver & Oliver, for respondent.

GOODE, J.

This action is in the nature of a suit in equity, and the purpose is to restrain the defendants, A. G. Mathewson and Mabel Mathewson Howlett, from collecting certain allowances made in their favor by W. H. Garanflo, as general assignee for the benefit of creditors of the Mathewson Mercantile Company, and from selling or transferring said allowances until after the Supreme Court of the state shall determine an appeal pending in said court, wherein the present plaintiff is plaintiff, and said assignee, Garanflo, is defendant, and the plaintiff seeks to subject the funds of the Mathewson Mercantile Company in the hands of said assignee to the payment of certain notes held by plaintiff against said mercantile company. The facts shown by the evidence and found by the court are these: In February, 1902, the Mathewson Mercantile Company, a corporation, executed and delivered to plaintiff three promissory notes, one for $1,700 due on demand, one for $5,000, due two years after its date, and one for $5,000, due three years after its date, drawing interest at the rate of 8 per cent. per annum, compounded if not paid annually. On the $1,700 note, three payments amounting to $654.30, were made at different times, and on the second of the $5,000 notes three payments amounting to $1,220 were made. The $1,700 note was executed by the mercantile company to plaintiff for money he had lent it, and the other two notes were executed in the name of the mercantile company by defendants A. G. Mathewson and Mabel Mathewson (afterwards Mabel Howlett) to pay plaintiff for 100 shares of the capital stock of said company, which he assigned and...