Service Purchasing Co. v. Brennan

• Citation: 42 S.W.2d 39,226 Mo.App. 110
• Parties: SERVICE PURCHASING COMPANY, A CORPORATION, RESPONDENT v. EDWARD BRENNAN, APPELLANT
• Decision Date: 15 September 1931
• Court: Court of Appeal of Missouri (US)

42 S.W.2d 39

226 Mo.App. 110

SERVICE PURCHASING COMPANY, A CORPORATION, RESPONDENT v. EDWARD BRENNAN, APPELLANT

Court of Appeals of Missouri, St. Louis

September 15, 1931

Appeal from the Circuit Court of the City of St. Louis.--Hon. Erwin G. Ossing, Judge.

Reversed and remanded.

August Walz for appellant.

(1) The action being one for liquidated damages, it is a provable claim in bankruptcy and the trial court, by its finding and judgment, has deprived defendant of his privileges and immunity as a bankrupt and of the equal protection of the bankrupt law, in violation of the Fourteenth Amendment to the Constitution of the United States. (2) The court erred in excluding the testimony of defendant: "A. I made a loan I didn't sell my wages." The Fidelity Loan Guarantee v. Baker, 54 Mo.App. 79; Tobin v Neuman, 271 S.W. (Mo. App.) 842. (3) The court erred in the findings of fact for plaintiff, in that they are inconsistent as to material matters and are also based on conclusions of law which are at variance with the findings of fact. Buschow Lumber Co. v. Union P. R. R. Co., 220 Mo.App. 743. (a) That the finding of facts does not embrace all material facts bearing on the issues involved, nor does it set them out in detail, but states merely conclusions. Korneman v. Davis, 281 Mo. 234, 246. (b) Such finding of facts is open to attack in the appellate court. Pemiscot County Bank v. Tower Grove Bank, 204 Mo.App. 441, 223 S.W. 115; Cochran v. Thomas, 131 Mo. 258. (c) Findings of fact by a trial court are none the less such because they appear under the label of conclusions of law, in that the character of the statement should be determined by its contents rather than by its caption. Platte Valley Bank, etc., v. Farmers & Traders Bank, 14 S.W. (Mo. App.) 12. (d) In that it finds the facts and declares the law to be that defendant cannot avail himself of a discharge in bankruptcy as a defense in violation of Sec 35, United States Bankruptcy Laws, U.S.C. A. (4) The court erred in proceeding with the trial in this cause when the undisputed evidence shows that defendant had filed a voluntary petition in bankruptcy on May 9, 1927, and had scheduled plaintiff's claim. Sec. 29, United States Bankruptcy Laws, U.S.C. A.

Roy H. Bergmann, Jos. J. Tomasso and Clark G. Hardeman for respondent.

(1) A judgment, rendered against the defendant, in an action based on the wrongful conversion of personal property by defendant, who has been adjudicated a bankrupt in a United States District Court, does not abridge the constitutional rights of the defendant nor violate the Fourteenth Amendment to Constitution of the United States, nor deprive said defendant of benefit of bankruptcy law; such action being specifically excepted from a discharge in bankruptcy. United States Bankruptcy Act of 1898, Sec. 17, Sec. 35, U. S. A. (2) No error was committed by the trial court in excluding the testimony of defendant. "I made a loan; I didn't sell my wages," as parol testimony, cannot be introduced to alter or change the terms of a written instrument. Willoughby v. Brandes et al., 297 S.W. 54, 317 Mo. 544; Wood v. White Eagle Oil & Refining Co., 274 S.W. 894, 220 Mo.App. 1004; Crim v. Crim, 63 S.W. 489, 162 Mo. 544; Boggs v. Pacific Steam Laundry Co., 70 S.W. 818, 171 Mo. 282. (3) An assignment of earned wages is valid in Missouri. Sec. 2171, R. S. 1919; Heller v. Lutz, 254 Mo. 704; Kusnetzky v. Security Ins. Co., 281 S.W. l. c. 51. (4) An action for damages, based on the wrongful conversion of personal property, is not barred by a discharge in bankruptcy of the defendant. U. S. Bankruptcy Act, 1898, Sec. 17, Sec. 35, U.S.C. A.; Covington v. Rosenbush, 148 Ga. 459, 97 S.E. 78; McIntyre v. Kavanaugh, 242 U.S. 138, 210 N.Y. 175; Wood v. Fiske, 175 A.D. 135, 161 N.Y.S. 1097; Collier on Bankruptcy (12 Ed.), p. 437. (5) A person who collects and uses salary or wages coming due to him after he has given an assignment thereof is likewise not released in bankruptcy from the resulting claim against him. Covington v. Rosenbush, 148 Ga. 459; Spurlock v. Garner, 144 S.E. 820. The trial court trying a law case without aid of jury need not make a separate finding of facts unless requested so to do by parties. The record in this case shows that no such request was made, and the declarations of law given and refused merely show legal theory on which the case was decided. Sec. 1402, R. S. 1919; Johnson v. Murray, 289 S.W. 977; Buck v. McMinn et al., 300 S.W. 497.

F. E. Williams, Amicus Curiae.

(1) The transfer of absolute ownership is essential to a valid sale. State v. Wingfield, 115 Mo. 428; Pecyke Bros. v. Ahrens, 98 Mo.App. 456; 35 Cyc. 27 D; Waites' Law of Sales, pp. 1 to 6; Christmas v. Russell, 14 Wallace U.S. 69 l. c. 84. (2) The assignment of a portion of the wages to become due on pay day was ineffectual to convey title thereto because the debtor (employer) did not consent thereto, nor receive notice thereof. Burnett v. Crandall, 63 Mo. 410; Loomis v. Robinson, 76 Mo. 488; Rice v. Dudley, 34 Mo.App. 383; Leonard v. M. K. & T. R. R., 68 Mo.App. 48; Bland v. Robinson, 148 Mo.App. 164; Swift v. Railroad, 149 Mo.App. 526; Kean v. Natl. City Bank, 294 F. 214; Nave-McCord Merc. Co. v. Rouney, 29 F. 383; Etheredge v. Wilson, 153 S.E. 230. (3) An assignment or bill of sale absolute on its face may be shown by oral evidence to have been given as security for a loan. Quick v. Turner, 26 Mo.App. 29; Newell v. Keeler, 13 Mo.App. 189; King v. Greaves & Ruff, 51 Mo.App. 534; Johnson v. Huston, 17 Mo. 58; Foster v. Reynolds, 38 Mo. 557; Wood v. Matthews, 73 Mo. 477; State ex rel. v. Boatmen's Savings Inst., 48 Mo. 189; Cobb v. Day, 106 Mo. 278; Scott v. Lloyd, 34 U.S. 417. (4) But even though the assignment should be considered as security for a loan, still no title to the wages passed thereby and the security thus attempted to be given was void because of the usurious rate of interest (240 % per annum) which was charged therefor by respondent. R. S. 1919, sec. 6496; R. S. 1919, sec. 3680; R. S. 1919, sec. 6491-6494; Henderson v. Tolman, 130 Mo.App. 498; Sheridan v. Post, 140 Mo.App. 96; Smith v. Becker, 192 Mo.App. 597. (5) Title to the wages, not having passed to respondent, remained in appellant and when he was adjudged a bankrupt, he was entitled to keep the same as exempt property under the Bankruptcy Act. (a) "From the time of the filing of a petition in bankruptcy the estate of the alleged bankrupt is in custodia legis." Title 11 on Bankruptcy, sec. 110, note 34 U.S.C. A. (b) "Exemptions in Bankruptcy are the same as those given by the State Law of the domicile of the Bankrupt." Title 11, sec. 24, U.S.C. A. (6) Respondent's rights are no more than those of an unsecured creditor and the debt is therefore one which a discharge in bankruptcy forever releases and bars. U. S. Bankruptcy Act, sec. 63, 14, 17; Bank v. Zaleuke, 295 S.W. 520, 521; Tenn. Finance Co. v. Thompson, 278 F. 597.

BENNICK, C. Haid, P. J., and Becker and Nipper, JJ., concur.

OPINION

BENNICK, C.

--This is an action for conversion. Originating in a justice's court, the case was taken on appeal to the circuit court, wherein, upon a trial to the court alone, a jury being waived, a judgment was rendered in favor of plaintiff, and against defendant, in the sum of $ 22. A motion for a new trial was filed and overruled, following which defendant prayed for and was granted an appeal to the Supreme Court, evidently upon the theory that there was a live constitutional question in the case. That court found that such was not the situation, however, and consequently ordered the case to be transferred here. [Service Purchasing Company v. Brennan (Mo. Sup.), 32 S.W.2d 81.]

No point is made in the briefs in regard to the form or sufficiency of the pleadings, and as a result their contents need not be considered.

Of the parties to the cause, it is enough to say that plaintiff, Service Purchasing Company, is a corporation, engaged (so its testimony shows), in the business of buying earned salary or wage accounts; while defendant, Edward Brennan, is or was in the employ of the Missouri Pacific Railway Company as a yard clerk.

Certain facts are undisputed in the record, among which are that defendant was paid a wage of $ 4.40 a day, and that the railroad company paid its employees semi-monthly, the amount earned from the first to the fifteenth of the month, inclusive, being due and payable on the twenty-fifth, and the amount earned from the sixteenth to the end of the month, inclusive, being due and payable on the tenth of the following month. In other words, the railroad company reserved a period of ten days after the maturity of each wage account in which to make up its pay roll for that period.

On April 25, 1927, defendant came to the office of plaintiff company, and advised the one in charge that he wanted to get some money. Whether it was his purpose to sell his wage account, or to obtain a loan, was a matter of dispute at the trial, plaintiff contending the former, and defendant the latter, at least in so far as he was permitted to do so under the rulings of the court. At any rate, defendant was asked to, and did, fill out a prepared form, styled an "application to sell an earned salary or wage account," in which he made certain representations in regard to his employment and outstanding indebtedness.

It appears from plaintiff's case that defendant had worked five days after April 15, and up to April 25, 1927, the date of the purported assignment, for which his earnings would have been the sum of $ 22, computed at the rate of $ 4.40 a day. Plaintiff offered him the sum of $ 20 for such account (under its version of the transaction) which defendant accepted, whereupon the following document, introduced in...