Starman v. John Wolfe, Inc.

• Decision Date: 09 January 1973
• Docket Number: No. 34254,34254
• Citation: 12 UCC Rep.Serv. 333,490 S.W.2d 377
• Parties: 12 UCC Rep.Serv. 333 John STARMAN, Plaintiff-Respondent, v. JOHN WOLFE, INC., Defendant, Charles E. Bradley et al., Garnishees-Appellants. . Louis District, Division Two
• Court: Missouri Court of Appeals

Page 377

490 S.W.2d 377

12 UCC Rep.Serv. 333

John STARMAN, Plaintiff-Respondent, v. JOHN WOLFE, INC., Defendant Charles E. Bradley et al., Garnishees-Appellants.

No. 34254.

Missouri Court of Appeals, St. Louis District, Division Two.

Jan. 9, 1973.

Clayton & Rosen, Charles Clayton, St. Louis, for garnishees-appellants.

Edward A. Glenn, Louisiana, for plaintiff-respondent.

SIMEONE, Judge.

This is an appeal from a judgment of the Circuit Court of Pike County entered April 19, 1971, in favor of plaintiff-respondent John Starman and against the appellants Charles E. Bradley, Ernest E. Watson and Bradley-Watson Motors, Inc. (hereinafter garnishees) in the sum of $3,183.40. After the garnishees had failed to pay the money into court for the benefit of the plaintiff, judgment was entered on the ground that the garnishees were bulk transferees of John E. Wolfe, Inc. and that a transfer of merchandise was made in violation of Article 6 of Chapter 400, RSMo. ¹

On September 11, 1969, the plaintiff filed his petition against John E. Wolfe, Inc. alleging that he had ordered an automobile from Wolfe and paid to him the full purchase price. Thereafter the automobile was delivered, but unknown to him, Wolfe had wrongfully placed a lien upon it in favor of the Illinois State Bank of Quincy. The bank later notified Starman of the lien and threatened foreclosure. The petition alleged that Wolfe failed to satisfy the lien and Starman was required to pay to the bank $3,300 and costs. Starman prayed judgment in that amount against Wolfe.

Thereafter the garnishees were served with a Summons to Garnishee on Execution of Attachment and several interrogatories were propounded to each of the three garnishees. Their answers generally denied that any money was owed to Wolfe. These answers were in turn denied by the plaintiff and thereafter the garnishees replied to plaintiff's denials.

On December 15, 1969, judgment was rendered in favor of Starman and against Wolfe in the sum of $3,300 and costs. On February 17, 1971, hearing was held on the garnishment proceeding. The evidence, based on offers of the parties by stipulation, the interrogatories and many exhibits, showed that John E. Wolfe, Inc. was engaged in the business of an automobile dealership in Louisiana, Mo., and that Starman was engaged in the auto body repair business in the same locality and had done business with Wolfe. Wolfe's business was located at 2101 West Georgia Street.

On March 11, 1969, garnishees Bradley and Watson entered into an agreement to purchase the business of Wolfe on condition of the approval of Bradley and Watson as franchisees of General Motors Corp. The buyers agreed to pay $35,000, except that $5,000 was placed in escrow to be '. . . used by the holder to pay any unknown, or otherwise, liabilities of the seller; . . .' The agreement provided that the seller should furnish a list of existing creditors to the buyer and the amounts owing. The parties were also to prepare a schedule of the property transferred 'sufficient to identify it.' The agreement further provided that 'At least ten (10) days before the buyers take possession of the goods or pays (sic) for them, whichever happens first, they shall give notice of the transfer personally or by registered or certified mail to all persons shown on the list of creditors furnished by the seller . . . The contents of such notice shall conform to the requirements of Section 6--107 of the Missouri Uniform Commercial Code.' Pursuant and subsequent to the agreement Bradley and Watson formed a corporation in Missouri and received a certificate of authority to commence business on May 6, 1969. On May 19, 1969, notices were sent to creditors of Wolfe, including Starman, pursuant to § 400.6--107 of the Commercial Code, informing them that Wolfe, Inc. intended to make a transfer in bulk to Bradley-Watson Motors, Inc. of materials. The notice informed the creditors that the 'proceeds of the transaction were not to be sued to pay the debts of (Wolfe)'; the property consists of all the merchandise and inventory of Wolfe located at 2101 West Georgia, Louisiana, Missouri, and that the 'transfer is for new consideration in the amount of approximately $65,000' which 'is to paid by the transferee to the transferor on May 29, 1969 at 2101 West Georgia, Louisiana, Missouri.' Starman went to the address on May 29 pursuant to the notice and inquired about the transfer. No one at the business knew anything about it and he was unable to obtain any information. Neither Bradley nor Watson was present. The garnishees' evidence indicated that they closed the contract with 'John E. Wolfe, Inc. on June 4th, 1969 by a draft in the sum of $60,816.39, dated June 4th, 1969, said check being made payable to John E. Wolfe, Incorporated.' This was done on June 4, 1969, in Quincy, Illinois, when Bradley, Watson, Wolfe and a representative of the Illinois State Bank met in that city.

A great deal of evidence and a large number of exhibits were introduced which tend to show that the garnishees took possession of the business prior to May 29, 1969, or June 4, 1969. Starman contends that the business was taken over by the garnishees on March 13, 1969. As evidence of this Starman introduced a great number of exhibits to show that on March 13, 1969, Bradley and Watson opened a bank account at the Bank of Louisiana in the name of Bradley-Watson Motors, Inc., and during the succeeding months a number of checks were written on the account to pay for many items, such as an electric bill owed by Wolfe, employees' salaries, taxes, tries, parts and operating expenses of the business. During the months of April and May the proceeds from parts sold were deposited in the account to the credit of Bradley-Watson Motors, Inc.

At the time of the 'closing' in Quincy, Illinois, three checks were drawn: (1) a check in the amount of $60,816.39 payable to John E. Wolfe, Inc. and Illinois State Bank; (2) a check in the amount of $7,620.00 payable to Ralls County State Bank issued for the benefit of Wolfe, and (3) a check in the amount of $5,650.00 payable to Farm Supply Company for John Wolfe, Inc. and John Wolfe.

Wolfe was indebted to the Illinois State Bank in excess of $60,816.39. The garnishees offered into evidence a 'financing statement' from John Wolfe to the Illinois State Bank, but there is nothing in the record to indicate the nature of the security interest held by the bank or what merchandise was covered by any such security interest.

The trial court rendered judgment in favor of Starman in the amount of $3,183.40 and costs. The trial court found that the '. . . Garnishees were bulk transferees in violation of Article 6 of Chapter 400 of the Revised Statutes of Missouri 1969, but they have commingled the goods so transferred and have sold the same and that they were thereby liable to Plaintiff, a judgment creditor of Defendant John E. Wolfe, . . .' Appeal was then taken here.

On August 11, 1972, respondent moved to dismiss the appeal for failure to comply with the Rules of Civil Procedure relating to briefs in that the appellants' brief did not comply with Rule 84.04, V.A.M.R. Earlier the respondent made a similar motion. This court, on its own motion, struck the first brief filed by appellants and gave them twenty days to file a new brief to comply with the rules. On August 9, 1972, a new brief was filed by appellants. This brief was not substantially different than the one originally filed. Therefore, respondent again moved to dismiss the appeal. It was ordered by the court that the motion be taken with the case.

In a number of recent cases appeals have been dismissed for failure to comply with the rules. Crapisi v. Crapisi, Mo.App., 485 S.W.2d 635; Hughes v. Wilson, Mo.App., 485 S.W.2d 620; Biggs v. Loida, Mo.App., 488 S.W.2d 932; Geiler v. Boyer, Mo.App., 483 S.W.2d 773.

'In view of the soon to be increased jurisdictional case load of this court, counsel are cautioned that the drastic action of dismissal of appeals may in the future be more rigidly applied. This for the reason that there will be less time to explore briefs and ascertain just what parties on appeal contend for reversal or affirmance. Counsel should further appreciate the aid rendered to the court by good briefing, in compliance with the rules, thus expenditing the disposition of cases.' T_ _ v. T_ _, Mo.App., 483 S.W.2d 84, 84--85.

The words of Judge Lamm written in 1908 are still foreful today: 'The rules of appellate practice in hand are simple and plain. They fill no office of mere red tape, or as a show of surface routine. To the contrary, they have substance, and carry on their face the obvious purpose to aid appellate courts in getting at the right of a cause. Hence, apparently, they bespeak the dignity arising from obedience. If they are not to be obeyed, they should be done away with once for all. A just rule, fairly interpreted and enforced, wrongs no man. Ostensibly enforced, but not, it necessarily wrongs some men viz., those who labor to obey it--the very ones it should not injure. If the rules in question stand for something and are ever to be enforced, they should be put in motion . . .' Sullivan v. Holbrook, 211 Mo. 99, 109 S.W. 668, 670. See also Ambrose v. M.F.A. Co-Operative Ass'n of St. Elizabeth, Mo., 266 S.W.2d 647.

Although appellants' brief is not a model of compliance with Rule 84.04, V.A.M.R., we believe that since this case raises questions concerning the recently enacted Uniform Commercial Code the interests of justice would be best served by a disposition of the case on the merits. Therefore, in the exercise of our discretion we will not dismiss the appeal and overrule the respondent's motion and proceed to the merits.

The garnishees contend on this appeal that the trial court erred in failing to find that: (1) the transaction was an exempt transfer under § 400.6--103(3) ² because the consideration paid for the transfer was used...