Moser v. Claes

• Decision Date: 23 November 1886
• Parties: OTTO MOSER, Assignee, v. C. CLAES ET AL., Appellants; INTERNATIONAL BANK, Respondent.
• Court: Missouri Court of Appeals

23 Mo.App. 420

OTTO MOSER, Assignee,

v.C. CLAES ET AL., Appellants; INTERNATIONAL BANK, Respondent.

St. Louis Court of Appeals, Missouri.

Nov. 23, 1886.

APPEAL from the St. Louis Circuit Court, SHEPARD BARCLAY, Judge.

Reversed and remanded with directions.

KEHR & TITTMAN, for the appellants: The mortgageor was to remain in possession and conduct the business which rendered the mortgage void. Sheppards v. Turpin, 3 Gratt. 373; White v. Graves, 68 Mo. 220; Goddard v. Jones, 78 Mo. 518; Stanley v. Bunce, 27 Mo. 269; Billingsley v. Bunce, 28 Mo. 547; The State v. Mueller, 10 Mo. App. 87. The agreement and understanding between the bank and Leisse at the time of the execution of the mortgage, as testified to by Mr. Lange, made it a conveyance to the use of the grantor. Weber v. Armstrong, 70 Mo. 217; Reed v. Pelletier, 28 Mo. 177. The mortgage, being fraudulent and void as against appellants, who were judgment creditors of Leisse, the property conveyed by it to the bank never passed to the assignee, Moser, under the deed of assignment, but against them remained the property of Leisse. Burrill on Assignments [4 Ed.] p. 151, sect. 110; Estabrook v. Messersmith, 18 Wis. 551; Heinrich v. Woods, 7 Mo. App. 236, 230.

F. A. WISLIZENUS and LOUIS GOTTSCHALK, for the respondent: A mortgage to secure indefinite future advances is good. Foster v. Reynolds, 38 Mo. 556; Ackermann v. Hunsicker, 85 N. Y. 43; Shiras v. Caig, 7 Cranch, 34; Jones on Chattel Mortgages, sect. 95. This mortgage does not, on its face, necessarily imply a power of sale in the mortgageor. Hewson v. Tootle, 72 Mo. 635; Weber v. Armstrong, 70 Mo. 220, approved in The State v. Cooper, 79 Mo. 464. The fact that the mortgageor sells, with the acquiescence of the mortgagee, does not of itself render the mortgage necessarily fraudulent. Hewson v. Tootle, 72 Mo. 635. Even though the mortgage were fraudulent, the mortgagee acquired possesion before the creditor levied; the mortgagee is, therefore, entitled to hold as against the creditor. Greeley v. Reading, 74 Mo. 309; Nash v. Norment, 5 Mo. App. 545; Cameron v. Marvin, 26 Kan. 612; Read v. Wilson, 22 Ill. 377.

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

The plaintiff, Moser, filed his petition stating that he had a fund of four thousand dollars in his hands as assignee of one Leisse. That the entire amount of such fund was claimed by the International Bank as proceeds of property mortgaged to it by his assignor, and that $2027.32 and interest parcel of said fund was claimed by Claes et al., by virtue of a judgment and execution against Leisse, and the attachment by garnishment of him, the said Moser, under said execution. The petition prayed for an order requiring such rival claimants to interplead.

The court sustained the prayer, whereupon the plaintiff paid the money into court and was discharged. The claimants filed their respective claims to said fund, and the court upon hearing decreed the entire fund to the International Bank, whereupon Claes et al., prosecute this appeal.

Touching the facts of the case there is no substantial dispute. It is conceded that the bank holds a valid claim against Leisse for an amount exceeding the entire fund in controversy, and that such claim arises out of Leisse's liability to the bank, secured, or intended so to be, by the mortgage hereinafter referred to. The judgment of the trial court, therefore, is correct, unless such mortgage, under the admitted facts of the case, was and is fraudulent in law as against Claes and others, creditors of Leisse.

The mortgage bears date April 13, 1879, and was duly recorded. It purports to convey to the bank all the engines, machinery, and fixtures, tools, and appurtenances of a certain box factory, and the lumber and stock on hand belonging thereto, also such other lumber or stock on hand, and engines, machinery, fixtures, and tools which might be acquired by said Leisse thereafter in the prosecution of the box factory business. Also, two horses and wagons.

At the time of the execution of the mortgage it was agreed between Leisse and the bank, that he was to continue and remain in possession of the property described in the mortgage, and that he was to continue to do the business of the factory as before, and deal with the property as if it were his own. He continued to do so until he made the assignment hereinafter mentioned.

Leisse made a general assignment of all his property, including the property mortgaged, July, 14 1884, to Moser, who immediately thereafter took possession of it. The president of the bank learning of this assignment, called upon the assignee, informed him of the mortgage and claim of the bank on the property, and requested him to run the business as heretofore, which the assignee assented to.

The assignee thereafter applied to the court for leave to sell the box factory with all its stock in bulk, and by order of the court he did so sell it, realizing upon such sale four thousand dollars, which he deposited in the bank in his own name as a special deposit.

The appellants, Claes et al., at the date of the assignment, were creditors of Leisse, and October 13, 1884, recovered a judgment against him on their claim for $2,027.32 and costs. They caused an execution to be issued on such judgment and caused the assignee, Moser, to be garnished on such execution.

Prior to the recovery of their judgment, they had presented their claim to the assignee for allowance, and it was allowed for $2,020.32. On this allowance the assignee paid them, November 10, 1884, a dividend of $405.86. This dividend, as the case finds, was paid out of the proceeds of certain assigned accounts and not out of proceeds of the mortgaged property.

August 1, 1884, the bank filed a petition in the assignment proceedings, praying for an order of court upon the assignee to pay to it the four thousand dollars proceeds of sale of the mortgaged property. August 20, 1884, the court made an order requiring the assignee to notify each creditor of Leisse to file objections with the assignee, within twenty days after his claim is established, whether he desired to contest the exclusive claim of the bank to this fund, and granted leave to the assignee to deposit the proceeds of the sale with the bank, on condition that if any creditor took action disputing such claim of the bank before October 1, 1884, the bank would return the fund. Notice of this order was served upon Claes et al., August 30, 1884. Their claim was established before the assignee September 25, 1884, and the assignee was garnished on their execution October 13, 1884, within twenty days after their claim was established by allowance.

The parties upon the trial of the cause entered into the following stipulation:

“It was agreed that the appraisement, filed in the assignment proceedings of Leisse, of the property covered by the mortgage, represented the true value of said property; that said value...