St. Louis Catering Co. v. Glancy
| Decision Date | 16 June 1922 |
| Citation | 242 S.W. 392,294 Mo. 438 |
| Parties | ST. LOUIS CATERING COMPANY v. T. H. GLANCY et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. Karl Kimmel Judge.
Reversed.
Jourdan Rassieur & Pierce for appellants.
(1) The plaintiff did not have possession or the right to possession at the time of the alleged conversion. (a) To recover in trover, plaintiff must show that it was in possession or had the right to possession at the time of the alleged conversion. Bank v. Tiger Tail M. & L. Co., 152 Mo 145; Cook v. Smith, 200 Mo.App. 218; O'Toole v. Lowenstein, 177 Mo.App. 662; Schwald v. Brunjes, 139 Mo.App. 516; Bowers, Conversion, p. 281, sec. 383; 38 Cyc. 2045; sec. 2; 27 R. C. L. 1131, sec. 41; Golden v. Moore, 126 Mo.App. 518. (b) Mere ownership or title without possession or right to possession is not sufficient. Bank v. Tiger Tail M. & L. Co., 152 Mo. 145; O'Toole v. Lowenstein, 177 Mo.App. 662; Schwald v. Brunjes, 139 Mo.App. 516; 38 Cyc. 2045, sec. 2; Bowers, Conversion, p. 281, sec. 383. (c) The letter of May 27, 1915, whereby the assets were turned over to the creditors' committee, and the acts done in pursuance thereof, constituted an assignment for the benefit of creditors under the statute. Secs. 623-665, R. S. 1919. (d) It was a voluntary assignment or transfer made by a corporation by authority of its board of directors of all of its property to a creditors' committee for the equal benefit of all of its creditors, which is the exact definition of an assignment under the statute. Sec. 623, R. S. 1919; Calumet Paper Co. v. Prtg. Co., 144 Mo. 331. (e) The failure to acknowledge and record the instrument does not impair its validity as an assignment for the benefit of creditors. Rosenthal v. Frank & Dyer, 37 Mo.App. 272. (f) The fact that no statement of the property assigned accompanied the instrument of assignment does not invalidate it under the statute. Hartzler v. Tootle, 85 Mo. 23. (g) The fact that the creditors' committee (the assignees) neglected to make out schedules does not render the instrument inoperative under the statute. Duvall v. Raisin, 7 Mo. 449. (h) The omission by the assignee to perform any duty imposed upon it by the statute would not deprive the creditors of their right to have the assignment administered under the statute. Hardcastle v. Fischer, 24 Mo. 70; Wynn v. Madden, 18 Mo.App. 261. (i) If the letter in question was not an assignment under the statute, then, at common law, it operated as a conveyance in trust for the benefit of creditors. The assignment statute did not abolish the common-law right of a debtor to make a conveyance in trust in good faith for the benefit of creditors. Brookshire v. Ins. Co., 91 Mo.App. 599, 605; Jaffrey v. Matthews, 120 Mo. 317. (j) It was not necessary for the instrument to contain technical words such as "grant, bargain, sell, convey or transfer." Any acts or words are sufficient to convey the title of the insolvent to the trustee where such is the clear intention of the parties. Wittmore v. Hastings, 51 Mo. 171; Shepard v. McNail, 122 Mo.App. 418; Lyle v. Burke, 40 Mich. 499; Underhill on Trusts & Trustees (Wislizenus), p. 19, chap, 2, art. 6. (k) Where an insolvent has made an assignment for the benefit of creditors, the assignee or trustee is the only party entitled to possession of the insolvent's assets and is the only person that may sue in trover for damages for conversion. State ex rel. Waggoner v. Lichtman & Co., 131 Mo.App. 68; Haose v. Distilling Co., 64 Mo.App. 131. (1) A delivery or transfer of assets by an insolvent to another for the benefit of creditors, even though it be not an assignment under the statute, divests the insolvent of all title or interest in the property and right of possession thereto and such trustee is the only party that may sue in trover for damages for conversion. Wright v. Euless, 12 Tex. Civ. App. 136, 34 S.W. 302; Calumet Paper Co. v. Prtg. Co., 144 Mo. 331, 339; Liebowitz v. Brinn, 113 N.Y.S. 685; Wittmore v. Hastings, 51 Mo. 171. (2) Even if plaintiff were in possession or entitled to possession at the time of the alleged conversion, yet defendants at the same time were joint or co-owners of the property in suit. (a) Trover will not lie against one joint owner by the other. Bowers on Conversion, p. 171, sec. 232; Merrill v. Mason, 159 Mo.App. 605; Sheffler v. Mudd, 71 Mo.App. 78. (b) The relation that was created between the Catering Company and the Hotel Company under the contract in question was that of a "joint adventure." 15 R. C. L. 500 et seq.; 23 Cyc. 452 et seq. (c) Where property is purchased under a joint adventure, the one holding title will be regarded as trustee for all the parties thereto, and property paid for out of the receipts of the adventure becomes the joint property of the parties to the adventure. 23 Cyc. 455, sec. F; 15 R. C. L. 504, sec. 6. (d) The rights of the parties to a joint adventure are governed and controlled by the law of partnership. 15 R. C. L. 500, sec. 2, note 4. (e) One partner (or joint adventurer) cannot sue the other in trover. 2 Rowley on Partnership, p. 1054, sec. 759; Weiss v. Weiss, 133 N.Y.S. 1021. (3) Because under the contract existing between the parties, the plaintiff, even if it had complied with it, was not the absolute owner of the property in suit. The only right the plaintiff had was to use the property upon the premises in question to September, 1917. At best, the defendants only excluded the plaintiff from this right, and its remedy, if any at law, is for damages for breach of this contract right and not in trover.
Sears Lehmann and Lehmann & Lehmann for respondent.
(1) Appellants' main contention is that the catering company made a general assignment for the benefit of creditors to a creditors' committee. The so-called "general assignment" is the letter of May 27, 1915. This letter is certainly clear and unambiguous and does not call for construction, but it so happens it was construed in writing by the Catering Company who wrote it, by the creditors' committee, who received it, and by defendants who were third parties and utter strangers to it. The constructions are all the same, i. e. that the Catering Company still owned its assets and was in control and possession of them and that the creditors' committee was assisting in its management and liquidation as its agents under the control and supervision of its board of directors. We respectfully submit that there has never been presented to this court a more frivolous contention than this of appellants that the above letter of May 27th, was a general assignment for the benefit of the creditors. The plaintiff was the owner of, entitled to possession of and in possession of the property when it was seized. (2) The contention is that defendants had a part interest in the property and could therefore take the whole of it without liability and the contention is that the seizure was rightful, and that conversion does not lie because no demand was made. The evidence shows defendants had no part or interest in the property and therefore the legal proposition that if so, they could take it all is immaterial but nevertheless a part owner is liable to the co-owner for conversion. The evidence showed that the seized property was bought, paid for and in the possession and use of plaintiff in a space leased by plaintiff from defendants. As to the seized food and liquors amounting according to defendants to $ 1304, the defendants did not even claim an interest. As to the furniture and equipment a half interest was claimed by defendant because of the following terms of the lease: (a) In addition to a monthly payment of $ 300 plaintiff was to pay defendants yearly one-half the surplus it received from operating the restaurant after deducting operating expenses and one-tenth of what it paid for the installation of the said equipment. (b) The provision that at the termination of the lease if the defendants had fulfilled the terms thereof they were to have a joint interest in the property and the right to purchase it for half its value. The lease had over a year and one-half to run. It had not terminated with the obligations of defendants fulfilled, and hence of course, this clause did not apply. The contention that the defendants had a half interest in the property is equally groundless with the one that there was a general assignment. Defendants having no half interest in any part of the property seized, the contention that such part interest in part of the property justifies seizure of the whole is immaterial, but even appellants' immaterial contentions are groundless for conversion does lie between one co-owner and another. McCoy v. Hyatt, 80 Mo. 139; Merrill v. Mason, 159 Mo.App. 309. The food and liquor in which plaintiff it is admitted had a whole interest was of course completely used up by defendants, and according to defendants' testimony much of the other property was worn out by them. (3) The contention is made that under the lease defendants had a right to seize the property herein to regulate mismanagement. By no tortured construction of the lease was this right given, and under the defendants' own testimony the property was taken for their own use, "because it was there" and they wanted the restaurant and was not taken for the purpose of "correcting mismanagement." It was not even pretended the property was taken to regulate mismanagement. Nearly five years afterward counsel stated at the second trial the evidence as to mismanagement was on the issue of punitive damages only and not admissible except on this issue. Mr. Glancy wanted the property. He wanted to buy it, but not at the price fixed by the owner or a neutral appraiser, but at his own price. Before...
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