J. Kennard & Sons Carpet Co. v. Peck

• Decision Date: 10 November 1885
• Citation: 19 Mo.App. 342
• Parties: J. KENNARD & SONS CARPET COMPANY, Respondent, v. CHARLES H. PECK, GARNISHEE, Appellant.
• Court: Missouri Court of Appeals

19 Mo.App. 342

J. KENNARD & SONS CARPET COMPANY, Respondent,

v.CHARLES H. PECK, GARNISHEE, Appellant.

St. Louis Court of Appeals, Missouri.

Nov. 10, 1885.

APPEAL from the St. Louis Circuit Court, AMOS M. THAYER, Judge.

Affirmed.

J. B. WOODWARD, and E. MCGINNIS, for the appellant: In a proceeding at law, the report of a referee has the force and effect of a special verdict. The court can not disregard it and re-try the case, on the evidence accompanying the report, and make a finding of its own. Prendergast v. Eyermann, 16 Mo. App. 389. A director of a corporation has a right to get a preference over other creditors by taking the property of the corporation in payment of or as security for a debt due him. Buell v. Buckingham, 16 Iowa 284; 19 Cent. Law Jour. 368. A director may act in the meeting of the board of directors on the question of giving him a security for a loan made by him to the corporation. St. Louis v. Alexander, 23 Mo. 531; Buell v. Buckingham, 16 Iowa 284. If a director has obtained an illegal preference, it can not be set aside in a garnishment proceeding. It must be done by a bill in equity, in which he may receive payment pro rata with the other creditors. Forster v. Planing Mill Co., 16 Mo. App. 151; Nat. Bank v. Staley, 9 Mo. App. 146. A director has a right to loan money to his corporation and contemporaneously therewith take a deed of trust on the property of the corporation to secure the loan. Kitchen v. R. R. Co., 69 Mo. 254-5; Forster v. Planing Mill Co., supra. If the judgment, recommended by a referee in his report, is not justified by his findings of fact in such report, the court will disregard the referee's conclusion as to the law, and render judgment according to his findings of fact. Moniteau Nat. Bank v. Miller, 73 Mo. 187.CHARLES B. STARK, and A. MOORE BERRY, for the respondent: When all of the evidence taken by a referee and upon which he makes his findings is reported by him to the court, it may modify or set aside the report and make such findings as are warranted by the evidence and pronounce judgment thereon. Ely v. Ownby, 59 Mo. 437; Smith v. Paris, 70 Mo. 615; O'Neill v. Capelle, 62 Mo. 202; Moniteau Nat. Bank v. Miller, 73 Mo. 187. A deed of trust of personal property is invalid as against the creditors of the grantor, unless it is duly recorded, or unless possession of the property conveyed is delivered to the trustee or beneficiary. Rev. Stat., sect. 2503; Claflin v. Rosenberg, 42 Mo. 439; Lesem v. Herriford, 44 Mo. 323; Burgert v. Borchert, 59 Mo. 80; Wright v. McCormick, 67 Mo. 426; Stern v. Henley, 68 Mo. 262; Mills v. Thompson, 72 Mo. 367; Stewart v. Nelson, 79 Mo. 522. The vendor of personal property has a lien upon it for the purchase price, and may follow it into the hands of any person except a bona fide purchaser. Rev. Stat., sect. 2353; Parker v. Rodes, 79 Mo. 88. A trustee will not be permitted to create such a relation between himself and the trust property as will make his own interest antagonistic to that of his beneficiary. Lingle v. Hogan, 45 Mo. 109; McAllen v. Woodcock, 60 Mo. 174; Bent v. Priest, 10 Mo. App. 543, 557; Skrainka v. Allen, 7 Mo. App. 434; Brewster v. Stratman, 4 Mo. App. 41; Koehler v. Iron Co., 2 Black 715; 67 U. S. XVII. (Law Ed.) 339. When one makes a conveyance of his property, to hinder, delay, or defraud his creditors, a trust results thereby in their favor, and the deed, as against them, is “utterly void,” and such property may be seized on execution at law against him and sold. Rev. Stat., 1879, sect. 2497; Ryland v. Callison, 54 Mo. 513.

ROMBAUER, J., delivered the opinion of the court.

We consider it the settled rule in this state, that in all actions wherein the constitutional right of trial by jury exists, a referee performs the functions of a jury, and his finding is equivalent to a jury verdict. Western Boatmen's Benevolent Ass'n v. Kribben, 48 Mo. 37; Prendergast v. Eyermann, 16 Mo. App. 387.

The distinction, which is made by the courts, between the finding of the referee in such cases and those wherein the right of trial by jury does not exist, and wherein the referee performs the functions of a master in chancery only, is supported by authority. Ely v. Ownby (59 Mo. 441), is claimed as a case to the contrary. There Judge Napton says that, “as the referee reported to the court all the evidence on which he acted, there can be no question that the court could review his conclusions and correct them when erroneous, and this court must determine the point in controversy as the circuit court would upon the evidence reported.” In that case, however, the referee merely acted as a master in determining the accuracy of a receiver's report, and there was no claim that the right of trial by jury extended to the subject of reference.

It is evident, therefore, that when in any cause, wherein the right of trial by jury exists, a reference is had by consent, the powers of the court, upon coming in of the referee's report, are limited. If the referee, by the order of reference, is authorized so to do and does make special findings of fact in his report, and upon such findings makes erroneous conclusions of law, the court may set aside his conclusions and render a judgment based upon his special findings of fact. This is on the theory that the facts being once established, the judgment of the court is a mere conclusion of law. But when in such a cause, the reference is had without directions, and the referee makes no special finding of facts, but does find generally in favor of one party or the other, the court may either confirm or set aside his report, but can not examine the testimony reported and make a separate finding of its own, different from that of the referee, unless it appears that there is no controversy between the parties concerning the facts. The waiver of a right of trial by jury, which necessarily precedes a reference by consent in causes where such right exists, is a waiver in favor of the referee, and not one in favor of the judge of the trial court. Parties may be willing to accept the referee as a substitute for a jury, and yet disinclined to accept the judge as such substitute. Yet the judge in examining the testimony reported by the referee, and making his own finding of facts upon such testimony, performs the functions of a jury as distinctly as he would if examining the witnesses, instead of their testimony as reported.

But while these propositions appear to be free from doubt, their correct application to the facts disclosed by the record is not without difficulty. The plaintiff, having obtained judgment against the Windsor Flats Company, caused an execution to be issued thereon, upon which the defendant, Chas. H. Peck, was summoned as garnishee. Issues were made up in the garnishment proceeding by denial and reply, the former stating that the defendant garnishee had in his possession the proceeds of certain property of the Windsor Flats Company, which he had acquired in fraud of its creditors. Issue was taken by reply to this allegation, and the issue thus made...