State v. McBride

• Decision Date: 19 January 1891
• Citation: 105 Mo. 265,15 S.W. 72
• Parties: STATE ex rel. MASTIN v. McBRIDE et al.
• Court: Missouri Supreme Court

15 S.W. 72

105 Mo. 265

STATE ex rel. MASTIN v. McBRIDE et al.

Supreme Court of Missouri.

January 19, 1891.

FRAUDULENT CONVEYANCES — SECRET TRUST.

To wreck a mining company, and cover up its assets, the stockholders allowed its lands and other property to be sold under a deed of trust, and procured a purchaser to bid in the property for the secret use and benefit of the company. The purchaser operated the mines in his own name, but for the use of the company. Held, that ores taken out by him were subject to execution against the company.

Appeal from circuit court, Jasper county; M. G. McGREGOR, Judge.

This was a suit on the bond of McBride, as sheriff of Jasper county. The breach alleged was the seizure and sale of a lot of zinc ore, belonging to D. C. Mastin, under an execution against the North Center Creek Mining & Smelting Company. That company had given a deed of trust on its property to John Wahl & Co. Default was made in the payment of the debt, and the property was sold under the deed of trust, and bid in by D. C. Mastin, and the mines were thereafter operated in his own name. The ores levied on were taken out after the purchase by him. On the prayer of the plaintiff, the court gave to the jury the following instructions on his behalf: "No. 1. The court instructs the jury that it is admitted in this case that the North Center Creek Mining and Smelting Company executed the deed of trust to secure a debt to John Wahl & Co., under which the land was sold, and that said deed of trust was executed in good faith to secure a just debt, and said John Wahl & Co. had a right to have said property sold to satisfy their debt, and the plaintiff being a purchaser at the trustee's sale thereof, if he took possession of the property, either in person or by his agents, and afterwards took out the mineral in controversy from said land for himself or for any other person or persons, other than the North Center Creek Mining and Smelting Company, and not for the company, he is entitled to recover in this case, even though the sale was procured to be made by the North Center Creek Mining and Smelting Company for the purpose of defrauding its creditors, and the plaintiff participated in the intent to defraud the company's creditors. No. 2. The court instructs the jury that the law presumes that the purchase by the plaintiff, D. C. Mastin, of the property described in the deed of trust, given by the North Center Creek Mining and Smelting Company to secure the debt to John Wahl under the sale, was an honest transaction, and made or his own use and benefit, until the contrary is shown, and the burden of proof is on the defendant, by a greater weight or preponderance of evidence, to overcome such presumption. No. 3. The court instructs the jury that, even if they should find that the sale under the deed of trust to John Wahl was procured to be made by the North Center Creek Mining and Smelting Co. for the purpose of defrauding its creditors, and that at such sale the plaintiff, D. C. Mastin, became the purchaser of the property mentioned in said deed of trust, not for himself, but for the benefit of John J. Mastin and Thomas H. Mastin, or either of them, or for the purpose of organizing a new company or corporation to which said David C. Mastin was to convey the property, and not for the benefit of the North Center Creek Mining and Smelting Company, still the jury will find the issues for the plaintiff. No. 4. The court instructs the jury that a purchase of property for the benefit of the individual stockholders of a corporation is not a purchase for or on behalf of such corporation in its corporate capacity; and in this case, if the jury should believe from...