Stewart v. Outhwaite

• Decision Date: 23 November 1897
• Citation: 44 S.W. 326,141 Mo. 562
• Parties: Stewart, Assignee of St. Clair County Bank, v. Outhwaite; Edwards, Interpleader, Appellant
• Court: Missouri Supreme Court

44 S.W. 326

141 Mo. 562

Stewart, Assignee of St. Clair County Bank, v. Outhwaite; Edwards, Interpleader, Appellant

Supreme Court of Missouri, First Division

November 23, 1897

Appeal from Henry Circuit Court. -- Hon. James H. Lay, Judge.

Affirmed.

Graves & Clark for appellant.

(1) The evidence is undisputed that the interpleader had a written bill of sale for the goods, and was in the actual possession thereof when the attachment was levied. These gave the interpleader prima facie title at the time of the seizure and the burden of proof was thereby cast upon Stewart, the assignee, to show that the interpleader's prima facie title was wrongful and fraudulent. Singer v Goldenburg, 17 Mo.App. 549; Albert v. Besel, 88 Mo. 150; Shoe Co. v. Casebeer, 53 Mo.App. 640; Taylor v. Crockett, 27 S.W. 620. (2) The mortgage and bill of sale were regular upon their face, and under such circumstances fraud must be affirmatively proved, and the burden of proof is upon the person attacking the conveyance. Gutzweiler's Adm'r v. Lackmann, 39 Mo. 91. (3) This said instruction number 5 is erroneous for the further reason that it says to the jury "you must be satisfied . . . . he (meaning interpleader) was the owner of the property in controversy." This is the same as requiring the interpleader to prove his case to the "satisfaction" of the jury. Such words in an instruction imposes a greater burden upon a party than the law imposes. Railroad v. Kemp, 30 S.W. 1117; Railroad v. Bartlett, 81 Tex. 44; Bain v Ullman, 71 Tex. 537; Emerson v. Mills, 83 Tex. 388; Gage v. Railroad, 14 S.W. 73; Shinn v. Tucker, 37 Ark. 389; Finks v. Cox, 30 S.W. 512. The word "satisfy" or "satisfied" should not be used in instructions in civil cases. Preponderance of the evidence is all the law requires. Railroad v. Canman, 13 S.W. 280. (4) All of the instructions as to fraud are erroneous. The pleadings raised no issue of fraud. Instructions must be confined to the case made by the evidence within the issues defined by the pleadings. 2 Thompson on Trials, sec. 2309; Duke v. Railroad, 99 Mo. 347; Waddingham v. Hulett, 92 Mo. 528; Lester v. Railroad, 60 Mo. 265; Brown v. Railroad, 101 Mo. 484; Bank v. Armstrong, 62 Mo. 59; Glass v. Gelvin, 80 Mo. 297; Moffatt v. Conklin, 35 Mo. 453; Bank v. Murdock, 62 Mo. 70; Wade v. Hardy, 75 Mo. 394; Currier v. Lowe, 32 Mo. 203; Greer v. Parker, 85 Mo. 107; Bruce v. Sims, 34 Mo. 246. (5) The law requires that the party taking property under such conveyance in payment of his debt must not only know of the fraudulent intent, but must participate therein and become a party to the fraud, and actually participate in the fraud. State to use v. Mason, 112 Mo. 374; Sexton v. Anderson, 95 Mo. 379; Holmes v. Braidwood, 82 Mo. 610. (6) While the jury may infer the fraudulent intent of the grantor from circumstances, when there is no direct proof, yet when there is direct and pointed proof that there was no such intent upon the part of the grantor, brought out and introduced by the defendant, as in this case, the jury can not infer fraud, from mere circumstances, and the court should have sustained the first ground of motion for new trial. (7) The judgment should have been against the defendant for all costs. 2 Shinn on Att. and Garn., sec. 677; Kirby v. Corning, 54 Wis. 599.

John H. Lucas and George L. Mann for respondent.

(1) The burden of the proof was upon interpleader to "make out his case." The burden is not shifted when he upon whom it rests has made out his prima facie case, but remains throughout the trial where it is fixed by the pleadings, unless changed by some admission of record. Bunker v. Hibler, 49 Mo.App. 536; Norton v. Paxton, 110 Mo. 456; Long v. Long, 44 Mo.App. 141. (2) The jury could not have understood from instruction number 5, taken as a whole, that it devolved upon interpleader to prove the bona fides of his chattel mortgage and bill of sale. (3) The instructions given in this case are especially proper when they are considered in connection with the pleadings and the evidence offered by interpleader at the trial. (4) Under the general issue the burden of proof is upon the plaintiff throughout the case. Berringer v. Iron Co., 41 Mich. 305; City of Lafayette v. Wortmer, 107 Ind. 404; Ingalls v. Eaton, 25 Mich. 32; Lafayette v. Ehman, 30 Ind. 83; Jarboe v. Schreb, 34 Ind. 350. (5) The use of the word "satisfied" in instruction number 5 could not have prejudiced the interpleader. The jury could only have understood from this instruction that they must be satisfied by a preponderance of the evidence that the interpleader was the owner of the property when the attachment was levied, before they could find for him. (6) The question of fraud in the chattel mortgage and bill of sale was properly submitted to the jury under the pleadings and evidence. Young v. Glasscock, 79 Mo. 574; Greenway v. James, 34 Mo. 326; Schulenburg v. Harriman, 21 Wall. 45; Mather v. Hutchinson, 25 Wis. 27; Caldwell v. Bruggerman, 4 Mich. 270; Wheeler v. Billings, 38 N.Y. 264; Bosse v. Thomas, 3 Mo.App. 472. (7) The instructions given by the court defining a fraudulent conveyance are in line with the established law of this State. Alberger v. White, 117 Mo. 347.

Barclay, P. J. Macfarlane, Robinson and Brace, JJ., concur.

OPINION

Barclay, P. J.

The St. Clair County Bank began an action against Mr. Chas. F. Outhwaite on notes aggregating about $ 3,200, April 10, 1893. At the same time the bank sued out an attachment. The writ was levied on two mules and also on a stock of drugs and some other personalty, as the property of Outhwaite. The property was found in possession of Mr. Robt. Edwards, who claimed to own it. He gave bond to have it forthcoming. He afterward filed an interplea in the attachment case, asserting his claim to all the property seized by the sheriff under the writ. Before the interplea came to final trial the bank failed. Mr. Stewart, as assignee of the bank, was substituted as plaintiff in the attachment suit. He contested Mr. Edwards' claim to the property. The issue of title was tried before Judge Lay with the aid of a jury. The result was a verdict for the interpleader for the mules only, but against him as to the other property. There was judgment accordingly. The interpleader appealed after the customary steps to that end. The real controversy as developed is between the bank's assignee and the interpleader Edwards. The original defendant has left the field of litigation entirely.

The testimony submitted by the interpleader at the trial tended to prove the following facts: In July, 1891, Mr. Outhwaite bought a stock of drugs and fixtures, mostly on credit, but upon which he paid $ 500 in cash, and then $ 100 per month for four or five months. The notes in suit represent the indebtedness to the bank for the stock at the time this suit was brought. After a few months the drug business of Outhwaite became a losing one. At the same time he was carrying on a farm in St. Clair county, but that enterprise was also not prosperous. While thus engaged he and Edwards were intimate friends. He borrowed of Edwards $ 2,000, at different times, and gave four notes therefor. While his drug business was falling behind, Outhwaite became indebted to Edwards (who was his clerk in 1893) to the extent of $ 600, and gave his note to Edwards for that additional sum, making in all five notes aggregating $ 2,600. The officers of the St. Clair County Bank began to urge Outhwaite to pay his debt by surrendering the drug store to it or its agent, but he evidently preferred to pay his friend Edwards. With that object in view he first gave Edwards a chattel mortgage on the stock and fixtures of the drug store to secure the indebtedness. Afterward he concluded that there was no more of the said property, at a reasonable price, than was necessary to pay the claim to Edwards. So he gave to the latter a clear bill of sale therefor. The written instruments executed by Outhwaite to Edwards were introduced in evidence by the interpleader. Edwards testified that he had ample means for the said advances; that he had returned from the west with $ 2,200 in cash, and with other property; that his wife had $ 2,000 which he controlled; and that his stepchildren had $ 2,000 in his care as their guardian. Mr. Outhwaite testified how he had expended large sums of money, and showed his losses in his business ventures. In answer to a direct question he declared that the transfer of the property to Edwards was not intended to hinder, delay, or defraud his creditors.

It is noteworthy that at the trial the interpleader took the affirmative, without any recorded ruling on that point. He was the first witness sworn. After some formal proof to show that the property levied on was the same as that claimed in the interplea, the chattel mortgages on which Mr. Edwards relied and the bill of sale were offered in evidence. One was in favor of Mr. Harper; it covered the mules. The other mortgage and the bill of sale were in favor of Edwards. They conveyed the drug store, etc. Mr. Edwards as a witness testified to the transfer by Harper to him of the first named chattel mortgage. He then proceeded to describe the transaction between Outhwaite and himself wherein he took the mortgage (and finally the bill of sale) of the drug stock. He stated that the notes (representing his claim for about $ 2,600) remained unpaid. On cross-examination the prior dealings between Outhwaite and Edwards were fully gone into. It appeared that part of the claim of Edwards was for money loaned in 1891, when Outhwaite, the proprietor in 1893, was clerk for Edwards in the same drug store.

The assignee of the bank introduced in evidence the statements of Edwards at a former trial, as reported by a stenographer....