Looney v. Bartlett

Citation106 Mo. App. 619,81 S.W. 481
PartiesLOONEY v. BARTLETT et al. (STATE BANK OF WEST POINT, ILL., Intervener).<SMALL><SUP>*</SUP></SMALL>
Decision Date25 April 1904
CourtCourt of Appeal of Missouri (US)

1. Contractors for a county building demanded the balance due them, but, it appearing that there were outstanding claims for material and labor, the balance due was deposited in a bank to the credit of a trust fund, to be paid to the contractors when the county was fully relieved from every and all liability for labor and materials; duplicate certificates being issued to the contractors and the county court containing such provisions. The contractors, believing that the labor claimants and materialmen could not enforce mechanics' liens against the building, endeavored to negotiate the certificate without success until they offered it to the cashier of intervener bank, for the reason that he "was a brainy man, and * * * could see the point." The cashier testified that he never demanded the money from the contractors, because he considered the loan was drawing a good rate of interest, but it was also shown that he made immediate efforts to collect the certificate from the bank issuing it. He also stated that the statement made to him, that the county officials desired the money to lay in the bank for a time, was sufficient notice that the bank would perfect its assignment. Held, that the facts justified a finding that the assignment was made by the contractors with intent to defraud their creditors, and that the assignee had notice thereof.

2. Where a certificate of deposit recited that the fund was deposited to the credit of a trust fund, to be paid to certain contractors for the erection of a county building when the county was fully relieved from every and all liability on account of materials and labor used in the construction of the building, the certificate of itself was notice to an assignee that there were claims against the fund which were prior to the rights of the contractors.

3. Where an assignment of a certificate of deposit, though fraudulent as to creditors of the assignor, was valid as between the parties, a judgment subjecting the fund to the payment of prior claims was erroneous, in so far as it directed that any balance remaining should be paid to the assignor instead of the assignee.

Appeal from Circuit Court, Bates County; W. W. Graves, Judge.

Action by Kate Looney, as administratrix, against C. L. Bartlett and others and the State Bank of West Point, Ill., intervener. From a judgment in favor of plaintiff, intervener appeals. Modified.

Frank Hagerman, for appellant. James C. Williams and Jno. Francisco, for respondent.

ELLISON, J.

Bartlett & Kling, as general contractors, completed a courthouse for Bates county, Mo., on July 26, 1902, and on that day there was found to be a balance due them of something more than $8,000. But they had given to the county a bond, with surety, that they would faithfully comply with their contract for building, and this bond included provisions that all labor and material going into the building should be paid for. So that, when the building was finished, the county court objected to paying to Bartlett, who in all matters concerned acted for the firm, until it could be known that all material and labor which had been put into the building were paid for. It was thereupon arranged between them that $4,200 of the money would be deposited by the county court to the credit of the trust fund, for the benefit of whoever (if any one) had claims for labor and material in the building. A certificate of deposit was issued in duplicate — one delivered to the county court and the other to Bartlett — reading as follows: "Deposited in Farmers Bank of Bates county, Butler, Missouri, July 26th, 1902, to the credit of trust fund by County Court of Bates county to be paid to Bartlett & Kling when the county is fully relieved from every and all liability on account of all material and labor used in the construction of courthouse, $4,200, forty-two hundred dollars. E. D. Kipp, Cashier." Bartlett took the certificate to West Point, Ill., and there, on July 28th, assigned it to the State Bank of that town as collateral security for its full amount ($4,200), that day borrowed of the bank; and that bank immediately notified the bank of deposit at Butler of the assignment. Looney Bros. were subcontractors under Bartlett & Kling for the roofing and metal work for $3,100, and they bought largely of the Townley Metal & Hardware Company, of Kansas City, assigning their contract with Bartlett & Kling as security; and the latter paid the Townley Company only a small part of their claim, leaving a balance due them of $1,283.74. Looney also owed smaller sums to Smith & Son and to Harper. The Townley Company brought suit by attachment against Bartlett & Kling, and garnished the Farmers' Bank at Butler, which answered, stating its issue of the certificate of deposit. Bartlett & Kling were notified by publication, but did not appear. The West Point bank filed an interplea claiming the money due on the certificate. One of the Looney brothers sued Bartlett & Kling, the Townley Company, the West Point bank, and the Farmers' Bank at Butler, in equity. These defendants, except Bartlett &...

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