Looney v. Bartlett & Kling
| Decision Date | 30 May 1904 |
| Citation | 81 S.W. 481,106 Mo.App. 619 |
| Parties | KATE LOONEY, Administratrix, etc., Respondent, v. BARTLETT & KLING et al., Defendants; STATE BANK OF WEST POINT, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Bates Circuit Court.--Hon. W. W. Graves, Judge.
AFFIRMED IN PART, REVERSED IN PART AND REMANDED.
Judgments remanded.
Smith & Denton for appellant.
(1) The certificate of deposit of $ 4,200 having been issued by the Farmers Bank, at the instance and request, and under the supervision of the county court, and having been thereafter negotiated and assigned to the appellant for value and without notice, respondents, the bank and Bates county, and those claiming under them, are estopped to say there were, in fact, conditions attached to said deposit other than as expressed in the written instrument. Chouteau v Goddin, 39 Mo. 229; Austin v. Loring, 63 Mo 19; Lanier v. McIntos, 117 Mo. 519. (2) The Farmers Bank and Bates county, acting through the county court having made the deposit in suit payable to Bartlett & Kling, when the county should be free from all liability on account of liens or claims for material or work done in the erection of the courthouse, an impossible condition, which both are conclusively bound to know, the fund at once became an unconditional deposit in favor of Bartlett & Kling. 4 Kent Comm. 130; 2 Blackstone 156; Morse v. Hayden, 82 Me. 230, 19 A. 443; Parker v. Parker, 123 Mass. 586; Burnham v. Burnham, 79 Wis. 557, 48 N.W. 661; Ellicott v. Ellicott, 45 A. 183. (3) The courthouse was not subject to mechanics' liens. Abercrombie v. Ely, 60 Mo. 23; Clinton ex rel. v. Henry Co., 115 Mo. 567. (4) The deposit of $ 4,200 in Farmers Bank having been made payable to Bartlett & Kling when the county should be exempt from liability on account of liens, etc., and it being at the time free from all such supposed liens or liability, the money was payable on demand. Demand having been made and payment refused, the bank was liable for interest from the date of demand, at the legal rate. Padley v. Catterlin, 64 Mo.App. 629; Dempsey v. Schawacker, 140 Mo. 680. (5) Appellant, although it took the assignment of the certificate of deposit as collateral security, only, for the payment of the loan of $ 4,200, the loan being made at the time upon this assignment, was an innocent purchaser, if without notice of any fraudulent intent upon the part of Bartlett & Kling. Logan v. Smith, 62 Mo. 455; Deere v. Marsdon, 88 Mo. 512; Wine Co. v. Rinehart, 42 Mo.App. 171; Bank v. Abernathy, 32 Mo.App. 211; Lee v. Wilkins, 79 Mo.App. 163. (6) The burden of proving fraud by appellant was upon the respondents, who charged the fraud. Fraud is never presumed. Garesche v. McDonald, 103 Mo. 10; Hill v. Taylor, 125 Mo. 331.
James C. Williams and John Francisco for respondent.
(1) The finding of facts by the court stand as a special verdict, and if there was evidence tending to establish the facts found they will not be disturbed. Freeman v. Moffit, 119 Mo. 294; Lingenfelder v. Wainwright, 103 Mo. 578; Ferry Company v. Railroad, 73 Mo. 389; Vogt v. Butler, 105 Mo. 479; Blount v. Spratt, 113 Mo. 48; Freeman v. Moffit, 135 Mo. 270; Sweet v. Maupin, 47 Mo. 323; Barker v. Scudder, 56 Mo. 272. (2) Fraud vitiates everything it touches. Stumpf v. Stumpf, 7 Mo.App. 272; Kenrick v. Cole, 61 Mo. 573; Clarkson v. Creely, 40 Mo. 114; Massey v. Young, 73 Mo. 273; Cooley on Torts, 475; Hopkins v. Sievert, 58 Mo. 201; Burgert v. Borchert, 59 Mo. 80; Schmucker's Estate v. Reed, 61 Mo. 592; Barr v. Baker, 9 Mo. 850; Brownlee v. Hewitt, 1 Mo.App. 360; Kehoe v. Taylor, 31 Mo.App. 588; Seed Co. v. Plant & Seed Co., 23 Mo.App. 579. (3) Where fraud is an issue, courts will permit the evidence to take a wide range with the view of uncovering all the facts. Guarantee Co. v. Baker, 54 Mo.App. 79; Stewart v. Severance, 43 Mo. 322; Baldwin v. Whitcomb, 71 Mo. 651; Snell v. Harrison, 104 Mo. 158; Ridge v. Greenwell, 53 Mo.App. 479; Burgert v. Borchert, 59 Mo. 80; State ex rel. v. Estil, 6 Mo.App. 6; Groschke v. Bordenheimer, 15 Mo.App. 353; Muenks v. Bunch, 90 Mo. 500; Frederick v. Allgaier, 88 Mo. 598; Gordon v. Ismay, 55 Mo.App. 323; Martin v. Estes, 132 Mo. 402; Hopkins v. Sievert, 58 Mo. 201; Spengler v. Kaufman, 46 Mo.App. 644. (4) A simple certificate of deposit containing no words or promise to pay the amount is nothing more than a receipt, and may be explained by parol evidence, as in the case of any other receipt. 2 Daniel on Negotiable Instruments (4 Ed.), secs. 1704, 1705 and 1706; Hotchkiss v. Mosher, 48 N.Y. 482; Easton v. Hyde, 13 Minn. 90.
Bartlett & Kling as general contractors completed a courthouse for Bates county, Missouri, on July 26, 1902, and on that day there was found to be a balance due them of something more than eight thousand dollars. 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. 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. 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:
Bartlett took the certificate to West Point, Illinois, and there on July 28, 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 and 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. Lowney also owed smaller sums to Smith & Sons 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 Bros. sued Bartlett & Kling, the Townley Company, the West Point Bank and the Farmers Bank at Butler in equity. These defendants, except Bartlett & Kling, filed answers (some being designated as intervening petitions and interpleas) each setting up the sums to which each claimed they were entitled.
Afterwards, the West Point Bank filed its suit in equity making the parties just named (except Bartlett & Kling) parties to the action. By this suit the West Point Bank sought to establish its claim to the money represented by the certificate of deposit. So that in all the various petitions, answers, interpleas, intervening petitions, and what not, these various parties never allowed the court, or opposing party, to lose sight of the respective claims made to the whole, or a part of the fund in bank represented by the certificate of deposit.
In this condition of confusion the trial court ordered all cases consolidated and, after hearing the evidence, found that the transfer or assignment of the certificate of deposit to the West Point Bank was made to defraud the creditors of Bartlett & Kling, and directed judgment that the Farmers Bank at Butler pay Townley & Co. their claim of $ 1,283.74; and to pay Looney the balance of his claim, after paying out of it the small claims of Smith and Harper, which Looney owed them, leaving a net balance to Looney of $ 192.78. The court further directed that the remainder of the amount represented by the certificate of deposit, after paying the costs of the litigation herein mentioned, belonged to Bartlett & Kling. The West Point Bank appealed.
The court's finding that the transfer of the certificate of deposit by Bartlett & Kling to the West Point Bank was made to defraud the creditors of Bartlett & Kling is attacked as not being sustained by the evidence. We, however, believe it is. Bartlett lived at Galesburg, Illinois, a city of 25,000 people, where his firm was located in business. West Point is a small village of 200 people in the same State about sixty miles from Galesburg. The firm did not do any business with the bank at West Point. Bartlett, however, knew Miller, the cashier of that bank, intimately. He got the certificate of...
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