State ex rel. Meysenburg v. Excelsior Distilling Co.

• Decision Date: 08 December 1885
• Citation: 20 Mo.App. 21
• Parties: STATE TO USE OF T. A. MEYSENBURG, Respondent, v. EXCELSIOR DISTILLING COMPANY ET AL., Appellants.
• Court: Missouri Court of Appeals

20 Mo.App. 21

STATE TO USE OF T. A. MEYSENBURG, Respondent,

v.EXCELSIOR DISTILLING COMPANY ET AL., Appellants.

St. Louis Court of Appeals, Missouri.

Dec. 8, 1885.

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

Reversed and remanded.

DAVIS & DAVIS, for the appellants: A conveyance by an insolvent debtor, whose effect is to hinder and delay creditors, is fraudulent as to such creditors. Burgert v. Borchert, 59 Mo. 80; State to use v. Nauert, 2 Mo. App. 295; Shelley v. Boothe, 73 Mo. 74, 76. The verdict of the jury, after a considerable portion of the assigned property had been released and replevined, was largely in excess of the debt. McNichols v. Rubleman, 13 Mo. App. 515; Potter v. McDowell, 31 Mo. 62, 74; Kuykendall v. McDonald, 15 Mo. 416-420.

ALBERT ARNSTEIN, for the respondent: An insolvent debtor may sell all or any portion of his assets to one or more of his creditors, for the purpose of preferring such creditor, whether the debt is due or not, notwithstanding the fact that such sale may operate to hinder or delay other creditors, and that the preferred creditor knew that his debtor owed other debts which he could not pay, and that other creditors were by such payment being hindered and delayed. Forrester v. Moore, 77 Mo. 651; St. Louis Coffin Co. v. Rubelman, 15 Mo. App. 980; State v. Laurie, 1 Mo. App. 371; Shelley v. Boothe, 73 Mo. 74; Holmes v. Braidwood, 19 Cent. L. J. Add. p. 12, Sup. Ct. of Mo.; Keiler v. Tutt, 31 Mo. 301; Gaff v. Stern, 12 Mo. App. 115; Wait. Fraud. Conv., sect. 390. The assignment of the accounts was a contract independent of the sale of the goods and based on a distinct consideration. Prince v. Shepard, 9 Pick. 176; Chit. Cont. 229; Keen v. Preston, 24 Ind. 395-7; Brett v. Catlin, 47 Barb. 407; Stillman v. Stillman, 21 N. J. Eq. 126-9.

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

This was an action on an indemnifying bond given in an attachment suit under the sheriff and marshal's act. The attachment was sued out by the Excelsior Distilling Company against Charlotte Meysenburg, who traded under the name of C. Meysenburg & Company. The property was claimed in conformity with the act by Theodore A. Meysenburg. Thereupon a portion of the property levied upon was released and the indemnifying bond now sued on was given in respect of the residue. The defence set up in the answer is, that, prior to the levy, the property had been transferred by Charlotte Meysenburg to Theodore A. Meysenburg for the purpose of hindering, delaying, and defrauding the creditors of the firm, among them the Excelsior Distilling Company. The plaintiff had a verdict and judgment.

It appeared that Charlotte Meysenburg did business under the name of C. Meysenburg & Company, as a wholesale liquor dealer in the city of St. Louis, with her husband, Gustav Meysenburg, as her manager; that on the fourth day of June, 1883, being insolvent and unable to continue business, she made, at the request of her brother-in-law, Theodore A. Meysenburg, three separate conveyances as follows:

1. A bill of sale of all the goods in her store except those mentioned in the next paragraph, of the invoice value of $843.45, in payment, as the instrument recited, of an indebtedness due from her to Theodore A. Meysenburg by book account in the sum of $791.85.

2. A bill of sale to the Fifth National Bank of St. Louis, of eleven barrels of whiskey in payment of a note of C. Meysenburg & Company, for the sum of seven hundred dollars held by said bank, due on the eleventh of June, seven days thereafter, which note was indorsed by Theodore A. Meysenburg for the accommodation of Charlotte Meysenburg. The cash value of this whiskey was about seven hundred dollars, and it was subsequently sold by the Fifth National Bank to a dealer in the country for seven hundred and twenty dollars on a credit of six months.

3. A bill of sale by Charlotte Meysenburg to Theodore A. Meysenburg, purporting to convey all her book accounts in satisfaction and discharge of her promissory note for $1,500, held by him. Of these book accounts, $1,464.40 were collectable, the remainder, just how much at their face value we do not gather from the record, were, according to evidence adduced by the plaintiff, uncollectable.

The first of the above conveyances embraced the property levied upon by the Excelsior Distilling Company, in respect of which the indemnifying bond now sued on was given. The burden was of course, upon the defendants in the first instance to show that this bill of sale, regular upon its face, was fraudulent as to creditors. To sustain this burden of proof, they produced a large mass of evidence relating to the history and condition of the so-called firm of C. Meysenburg & Company, its dealings with its creditors, its relations with this plaintiff, and the circumstances surrounding each of these three bills of sale. We think that it was entirely proper to allow the evidence to take this wide range.

We think that upon the whole evidence, the transfer of the goods conveyed in the first bill of sale, if reviewed as an isolated transaction, would not afford any question such as ought to be submitted to a jury in respect of its bona fides. The evidence in regard to the existence of the debt, in payment of which the transfer was made, was unquestioned. The evidence did not tend to show that the amount of goods so transferred was more than was reasonably sufficient to pay the debt for which the transfer purported to have been made, within the rule laid down in Potter v. McDowell (31 Mo. 62, 74). In fact, most of the goods were afterwards sold at a public sale where there were several bidders at a rate at which the whole amount would not have produced enough by considerable to pay the debt. We also think that the second of the above named transfers, the bill of sale to the Fifth National Bank, presented nothing standing by itself, for the consideration of the jury under the issue as affirmed. The bona fides of this debt was unquestioned. The debt due to the Fifth National Bank was evidenced by a promissory note, which the bank had discounted in the course of trade and which was about to mature. The goods transferred in satisfaction of this debt were not of greater cash value than the debt itself. The circumstance that the transfer was procured to be made by Theodore A. Meysenburg with the primary purpose of exonerating himself from his contingent liability as indorser upon the note, is merely a collateral circumstance which cuts no figure in the case, as the transfer was made to the creditors to whom the debt was owing, and was in all respects valid and such as the law permits. It was proper to admit evidence concerning this transfer, in order that the jury might have before them a connected view of the contemporaneous transactions which went to show the intent with which the transfer immediately in question was made; but as the evidence touching this transfer presented no question for the consideration of the jury, the instructions offered by the defendants which were directed to this evidence, were properly refused. The State v. Laurie, 1 Mo. App. 371; Gaff v. Stern, 12 Mo. App. 115; Shelley v. Boothe, 73 Mo. 74.

We may add that it is not the law that a creditor in failing circumstances may not make a transfer to pay or secure a creditor whose debt is not yet due.

But we think the evidence cast an amount of suspicion upon the third transfer above described sufficient to make the validity of it a proper subject of inquiry by the jury. The alleged indebtedness was due to a near relative. It had never been borne on the books of the debtor. The transferee had frequent access to the books, and it was a fair question for the jury whether he did not know that the indebtedness did not there appear. It was an old indebtedness involved in a family history and the previous failure of another brother of Theodore A. Meysenburg. The note by which it had been evidenced was antedated. There are important discrepancies between two depositions of Theodore A. Meysenburg in respect of it. The alleged assignment had been made in discharge and satisfaction of it, and yet,...