State v. Allen

• Decision Date: 11 March 1922
• Docket Number: No. 23298.,23298.
• Parties: STATE ex rel. STEVENS MOTOR CAR CO. et al. v. ALLEN et al., Judges.
• Court: Missouri Supreme Court

239 S.W. 105

292 Mo. 360

STATE ex rel. STEVENS MOTOR CAR CO. et al. v. ALLEN et al., Judges.

No. 23298.

Supreme Court of Missouri, en Banc.

March 11, 1922.

Certiorari by the State, on the relation of the Stevens Motor Car Company and another, against Hon. William H. Allen and others, as Judges of the St. Louis Court of Appeals, to quash a judgment by that Court of Appeals, affirming a judgment for plaintiff in the case of J. W. Ford against the relators. Writ of certiorari quashed.

Leonard, Sibley & McRoberts, of St. Louis, for relator Stevens Motor Car Co.

M. W. Fetierbacher, of St. Louis, for relator Southern Commercial & Savings Bank.

Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, for respondents.

ELDER, J.

Relators seek by writ of certiorari to quash a judgment of the St. Louis Court of Appeals entered in the case of J. W. Ford, respondent, v. Stevens Motor Car Company and Southern Commercial & Savings Bank, appellants (relators herein), 232 S. W. 222, which judgment affirmed a judgment in favor of respondent rendered by the Circuit Court of the City of St. Louis.

The facts involved are thus stated in the opinion of the Court of Appeals:

"On July 17, 1914, the Stevens Motor Car Company obtained a judgment against respondent for the sum of $1,852.98. On March 8, 1917, respondent recovered judgment against the Stevens Motor Car Company for the sum of $4,276.65. On November 21, 1917, respondent filed an amended motion to set off the last mentioned judgment against the judgment in favor of the Stevens Motor Car Company.

"The motion of respondent sets up the facts related above, and alleges that on March 6, 1917, the Waverly Sales Company, which became the Stevens Motor Car Company, pretended to assign the judgment against Ford to the Southern Commercial and Savings Bank, one of the appellants herein, but avers that said assignment was without consideration, and fraudulently made for the purpose of defrauding the said Ford, and further alleging that the Southern Commercial & Savings Bank (hereafter referred to as the Bank) knew at the time of taking the alleged assignment that respondent had filed suit against the Stevens Motor Car Company. Respondent asks that his judgment be set off, and credited with the amount of the judgment held by the Stevens Motor Car Company, and that execution issue for the balance due.

"The Stevens Motor Car Company and the Bank filed answers to respondent's motion, putting in issue the validity of the assignment to the bank, and alleging that the judgment of respondent against the motor car company had been appealed from, and that said cause was still pending and undetermined in this Court and was not a final judgment.

"Plaintiff offered in evidence, as an admission, the deposition of one Kammerer, cashier of the Bank, whose evidence, as shown by said deposition, was that the Stevens Motor Car Company had been indebted to the Bank for several years, and that at the time of the assignment it owed the Bank $3,600. On the same day the assignment was made, the indebtedness was reduced to $2,150. The $3,600 indebtedness was evidenced by one note, which had been renewed eight or nine months prior to the date of the assignment; that Mr. Stevens had always told them at the Bank that when the judgment against Ford was paid he would use the proceeds of the payment to liquidate the debt of his company; that the assignment of the judgment was delivered to him at the Bank by Mr. Stevens; that Mr. Stevens may have told him of the suit instituted by Mr. Ford against the Stevens Motor Car Company the day before the delivery of the assignment, but that he had not mentioned the matter on any prior occasion. He said that Stevens came to the Bank and told him he could give the Bank this assignment, and he informed Stevens that `we want the assignment if that's the best you can do,' and at that time he was told that Ford had a case against the Stevens Motor Oar Company.

"It appears that this judgment was assigned to the Sank on March 5, 1917, and the assignment was made a matter of record on the next day. It appears from the testimony of the cashier of the Bank, and of Frank E. Stevens, who was connected with the Stevens Motor Car Company, that the Bank had been pressing Stevens for this money, and agreed with him that if he would make a payment of $1,500 and assign this judgment to the Bank as collateral, then he would be granted an extension of time for the payment of the remainder amounting to $2,150.

"It appears from the evidence of Frank I. Stevens, that the Stevens Motor Car Company ceased to be a going concern about April 1, 1917. He states that at the time of the assignment he talked to Mr. Kammerer's attorney about the matter more than he did to Mr. Kammerer, and that at the time the judgment was assigned and the balance on the note renewed, the company was unable to pay the indebtedness in full.

"Respondent introduced the original files in the cases of Ford v. Stevens Motor Car Company, and also the files in the case of the Company against Ford. Both Kammerer and Stevens testified on behalf of the appellants. On cross-examination, Kammerer, cashier of the appellant Bank, stated that at the time of the assignment he knew that the Stevens Motor Car Company was being sued by Ford for about $5,000; that he knew that fact the day before the assignment was given, and that he also knew that if the judgment for $5,000 was secured against the Stevens Motor Car Company, it would not be able to pay its creditors in full, and that the assignment of the judgment was wanted so that the Bank would come in first."

The Court of Appeals held that Ford had an equitable right of set-off and was entitled to have the judgment obtained by him set off against the judgment rendered in favor of the Stevens Motor Car Company.

I. Relators contend that in holding that Ford was entitled to equitable relief respondents herein have failed to follow the rule announced by this court in the cases of Alnutt v. Leper, 48 Mo. 318, Thias v. Siener, 103 Mo. 314, 15 S. W. 772, and. Benton County v. Morgan, 183 Mo. 831, 64 S. W. 119, to the effect that before a plaintiff is entitled to equitable relief it must be shown that ordinary legal remedies have been exhausted.

It will be noted from the second last paragraph of that portion of the opinion of the Court of Appeals quoted above, that Mr. Stevens, of the Stevens Motor Car Company, stated that at the time the judgment against Ford was assigned and the balance on the note renewed, "the company was unable to pay the indebtedness in full." It will be further noted from the closing paragraph of that portion of the opinion quoted, that Mr. Kammerer, cashier of relator Southern Commercial & Savings Bank, stated that at the time of the assignment he knew that the Stevens Motor Car Company "would not be able to pay its creditors full." These statements were tantamount to admissions that the Stevens Motor Car Company was insolvent. The opinion of the Court of Appeals had the following to say with respect to the insolvency of the motor car company affording sufficient ground for equitable relief:

"The fact that the Stevens Motor Car Company was insolvent when Ford's judgment against it was obtained, and also at the time it was assigned, and the Bank having full knowledge of Ford's claim, and of the insolvency of the motor car company, afforded sufficient ground to warrant the lower court in holding that an equitable right of set-off existed against the judgment and was not affected by the assignment."

This ruling of the Court of Appeals is in entire harmony with the pronouncements of this court upon a state of facts analogous to those la the case at bar. Thus in Field v. Oliver, 43 Mo. 200, where the defendant Oliver endeavored to have two notes given him' by plaintiff Field, who was insolvent, set off against an amount awarded to plaintiff by arbitrators, and"which notes were for a greater sum than the amount awarded, it was held that the right of set-off existed, the court saying (loc. cit. 203):

"Where the demand sought to be set off is certain and definite, and the insolvency of the adverse party is...