John Deere Plow Co. v. Sullivan

• Decision Date: 12 November 1900
• Citation: 158 Mo. 440,59 S.W. 1005
• Parties: JOHN DEERE PLOW CO. v. SULLIVAN (LANCASTER, Interpleader).
• Court: Missouri Supreme Court

59 S.W. 1005

158 Mo. 440

JOHN DEERE PLOW CO. v. SULLIVAN (LANCASTER, Interpleader).

Supreme Court of Missouri, Division No. 1.

November 12, 1900.

FRAUDULENT CONVEYANCES — EVIDENCE — BADGES OF FRAUD — QUESTIONS FOR JURY — INSTRUCTIONS — CROSS-EXAMINATION.

1. An insolvent conveyed his stock of goods, taking as part payment the purchaser's note, and subsequently the debtor, on learning that a creditor of his had attached the stock and secured an order restraining him from disposing of the note, offered the purchaser to exchange his note for other notes held by the purchaser, made by persons who were insolvent, and, without any inquiries as to the meaning of such proposition, the purchaser made the trade; he at the time knowing nothing of the commencement of the action. Held, that a judgment in favor of the purchaser on his intervention in attachment would not be disturbed on the ground that the debtor's offer to exchange the notes should have put the purchaser on inquiry, and he should be protected only to the extent of recovering the money he had actually parted with, since the exchange of the notes was a matter to be taken into consideration by the jury, but was not a conclusive badge of fraud.

2. Where the creditor of an insolvent debtor contended that his conveyance of the stock of goods had been in fraud of creditors, and it appeared that the purchaser of the stock had paid $1,000 in cash, with which the debtor was to pay a certain claim against himself, and that the purchaser also gave a note and assumed all other debts of the debtor, of which he knew at the time the bargain was made, the fact that the note was payable in two years did not show the transaction fraudulent.

3. Where plaintiff claimed that a conveyance by defendant had been in fraud of creditors, an instruction that if the debtor was insolvent, and the purchaser knew it, and gave the debtor his note in part payment, payable on or before two years from date, the sale was fraudulent in law, was properly refused; there being no evidence to show that the purchaser did know of the debtor's insolvency.

4. Where plaintiff claimed that a conveyance of defendant's goods was in fraud of creditors, and requested a charge that, in determining whether the purchaser knew of the debtor's intention to defraud, facts coming to the notice of the purchaser, which would put a prudent man on inquiry which, if followed, would lead to the knowledge of the fraud, were evidence from which the jury might infer knowledge of such fraud, and the court modified instruction by striking out the words, "from which the jury may infer that the purchaser had knowledge of such fraud," and inserting, "which the jury may consider in determining whether the purchaser had knowledge of such fraud," the modification was not error, since the difference in meaning was so unsubstantial that the jury could not have been misled thereby.

5. Where plaintiff claimed that a conveyance by defendant of his stock of goods had been in fraud of creditors, and one of the attorneys for the purchaser of the stock was called as a witness to rebut statements made by a witness that the attorney had told him, in effect, that the transaction was fraudulent, and the attorney stated that he knew as a fact that the purchaser was innocent of any intention to wrong any one, failure of the court to strike out the statement as argumentative was harmless error; it appearing that the attorney was subsequently examined in chief and cross-examined as to every fact connected with the transaction from its incipiency.

Appeal from circuit court, St. Clair county; James H. Lay, Judge.

Action by the John Deere Plow Company against one L. B. Sullivan, R. F. Lancaster interpleading. From a judgment in favor of the interpleader, plaintiff appeals. Affirmed.

The defendant, Sullivan, and C. M. Kee, as partners, in and prior to the early part of July, 1893, were engaged in the hardware business in Nevada, Mo. Kee sold out to Sullivan for $3,000, of which $2,500 remained due Kee in July, 1895. In July, 1895, the assets consisted of a stock of goods, worth about $4,500 to $5,000, and some $7,000 in notes and accounts. Sullivan and Kee owed the plaintiff herein 22 promissory notes, aggregating $2,557.49, which were payable on the 1st of each month, beginning October 1, 1895. Prior to July 27, 1895, negotiations were begun between Sullivan and the interpleader, Lancaster, who were life-long friends, and distantly related by marriage, looking towards a sale of the stock of goods by Sullivan to Lancaster. The latter was a farmer and school-teacher, and had no knowledge of or experience in the hardware business. Sullivan represented to Lancaster that the stock was worth $5,000, and that he owed Kee $2,500, and that Kee was pressing him for the money, and was willing to take $2,000 for his claim, and that he (Sullivan) wanted to sell his stock so as to get money to pay Kee, and would give him (Lancaster) the benefit of the Kee reduction of $500 by selling him (Lancaster) the stock for $4,500. The bargain was struck, and without taking stock, or an inventory, or making any inquiries in the matter, Lancaster took possession of the goods on July 27, 1895, and gave Sullivan $1,000 in cash, and his note for $2,934, payable at two years after date, with 6 per cent. interest, and assumed the payment of $500 that Sullivan owed Hibbard, Spencer, Bartlett & Co., and $66 that Sullivan owed the Favorite Stove & Range Company. Sullivan turned over the $1,000 to Kee, and gave him also some $700 of the notes and accounts Sullivan so held, and $300 worth of stoves, which, with the note for $2,934, aggregated the agreed price of $4,500. Sullivan also owed the Supplee Hardware Company $202, and, on the 31st of July, Lancaster agreed to assume that debt, and that amount was credited as a part payment on Lancaster's note for $2,934 aforesaid. Several days after the sale to Lancaster, Kee informed him of Sullivan's debt to the plaintiff, and about the same time two representatives of the plaintiff went to Nevada, and talked with Sullivan and Lancaster about it. Sullivan offered to turn over to them some of the notes which he held, but the evidence is conflicting as to whether the Lancaster note was to be included therein. It is morally certain that it was not, for the reason that that note alone exceeded in amount the sum of the notes due the plaintiff. At any rate no agreement was reached. Thereafter, on the 6th of August, 1895, the plaintiff instituted this suit, by attachment, against Sullivan, and obtained a restraining order preventing Sullivan from disposing of the Lancaster note for $2,934. Sullivan was then out of town. He returned on August 7th, and was informed by a friend of the suit. He went to the court house to verify the information, and becoming satisfied that such was the case, and that the purpose of the suit must be to prevent his collecting or negotiating the Lancaster note, in order to prevent such a happening he went immediately, and before being served with process in the case, to Lancaster's store, and told him to go to an attorney's office, where he (Sullivan) would shortly meet him. Lancaster did so, and they met there. Sullivan said to Lancaster, "Bob, I would like to swap your paper for the paper you hold;" meaning notes of Lancaster's brother-in-law and his brothers that Lancaster held. Sullivan gave no reason for his desire to swap, and Lancaster made no inquiries. Lancaster knew nothing at that time of this suit. Lancaster agreed to the swap, and accordingly Sullivan gave Lancaster his note for $2,934, on which there was a credit of $202, leaving a balance due of $2,732, and Lancaster turned over to Sullivan the notes he held against his brother-in-law and his brothers, which aggregated $2,534.45, and, to cover the difference between this sum and the $2,732, Lancaster gave Sullivan his check for $197, which was paid. On the 12th of August, the plaintiff took the depositions of Sullivan and Lancaster, and thereafter, on the 28th of September, 1895, the plaintiff caused the attachment writ to be levied on the stock of goods in Lancaster's possession, and had them sold. Lancaster interpleaded, claiming to be the owner of the goods. The answer of the plaintiff to Lancaster's interplea is a general denial that the plaintiff is the owner of the goods, and that they were worth $4,800. The cause was taken by plaintiff by change of venue to St. Clair county. A trial was had, resulting in a verdict and judgment for the interpleader, and, after proper steps, the plaintiff appealed to this court.

John H. Lucas and Lathrop, Morrow, Fox & Moore, for appellant. H. H. Blanton and Hoss & Scott, for respondent.

MARSHALL, J. (after stating the facts).

1. The plaintiff insists that "upon the entire record the interpleader is not entitled to recover, and the court should have directed a verdict for plaintiff." It is not the practice of this court, in actions at law, to review conflicting evidence, or to interfere with verdicts of juries, where there is any substantial evidence to support them. It is only in cases where there is no such substantial evidence in the whole case upon which to justify the verdict, or where the jury has been guilty of prejudice, passion, or misconduct, or where the verdict is manifestly unjust, that this court will review the evidence and set aside the findings of fact. It is not enough that there is a mere insufficiency of evidence, nor that upon the evidence adduced this court would, if sitting as the trior of the facts, have reached a different conclusion from that arrived at by the jury. James v. Association, 148 Mo., loc. cit. 15, 16, 49 S. W. 978. If Lancaster and his witnesses told the truth, there can be no doubt that he made out a prima facie case upon the facts, and that he did not know of, or participate in, any fraud Sullivan may have intended or committed. The plaintiff's testimony,...