65 Mo. App. 230 | Mo. Ct. App. | 1896
Lead Opinion
This is a suit in replevin for the recovery of about $1,100 worth of boots and shoes which the plaintiffs, as wholesale dealers at Cincinnati, Ohio, sold to John C. Ryan, Jr., a retail dealer in St. Joseph, Missouri. Plaintiffs assert a right to rescind the sale and reclaim the goods because of an alleged fraudulent purchase by John C. Ryan, Jr.; while the defendant, W. H. Ryan, claims under a deed of trust made to him October 6, 1893, by said John C. Ryan, Jr., to secure a note of about $9,400 which said John C. Ryan, Jr., had given his father, J. C. Ryan, Sr., together with two notes of $1,000 each, which said Ryan had made to the Commercial Bank of St. Joseph, and one note of $1,500, executed by the same party to the Schuster-Hax National Bank of St. Joseph.
At the close of plaintiffs’ evidence, the court sustained a demurrer thereto and directed a verdict for defendant, and from a judgment against them plaintiffs appealed.
I. The point is, whether or not the trial .judge was justified in taking the case from the jury. Counsel for respondent have not seen proper to furnish us a brief. We have, however, in the light of an able and exhaustive brief and argument by plaintiffs’ counsel, examined the evidence contained in the abstract and
We shall not, in the brief space of an opinion, attempt to give in detail all the facts to be gathered from this bulky record. A statement somewhat elaborate is, however, necessary to a complete understanding of the main issues.
In the year 1890 and several years prior thereto, John 0. Ryan, Sr., conducted a general merchandise business at Spearfish, South Dakota. A portion of the time he had in his employ his two sons, John C., Jr., and defendant William H. Ryan. They were then young, perhaps twenty-two and twenty years old, respectively. In the latter part of the year 1890, John C. Ryan, Jr., left home and found his way to St. Joseph, where he, for a time, engaged as clerk in a store. In the early part of 1891, said Ryan, Jr., conceived the idea of going into the retail boot and shoe business at' St. Joseph, and about the same time his father, Ryan, Sr., concluded to go out of the boot and shoe business in Dakota. The father came into St. Joseph and assisted his son Ryan, Jr., in selecting a house in which to do business. Ryan, Sr., then returned to Dakota and shipped to St. Joseph his entire stock of boots and shoes. There is at least a pretense that this was a sale by the senior to the junior Ryan, and that the amount thereof was $4,300, for which he gave his note, being ninety cents on the dollar of the cost of such goods laid down in Dakota. In February, 1891, Young Ryan opened a boot and shoe store at St. Joseph, his only capital, outside of the Dakota stock, being about $500 in cash. The first thing young Ryan did after going in business was to make a statement of his financial condition to the Dun mercantile agency. This statement was as follows: “I am twenty-three years of age and married and will
In the early summer of 1893 (when, it will be remembered, the final depression set in) the Ryan stock seems to have been large, and yet Ryan, Jr., gave orders to eastern firms for the fall trade to the amount of $17,000, or more — goods to be delivered about the first of September. The parties to whom these orders were given were chiefly parties with whom he had not
On the eighth day of August, 1893, shortly after these large orders were made, Byan, Sr., again appears at St. Joseph, and Byan, Jr., at once executed a thirty-day note to his father for $9,414.56, and to secure the same the young Byan made a secret chattel mortgage covering the entire stock of goods. In accordance with an understanding between the parties, this instrument was kept off the record, but was doubtless intended to be recorded when the emergency might arise. Byan, Sr., then went back to Dakota, but on the summons of the young Byan, returned again during the first days of October; and it was then, on October 6, 1893, the prior secret chattel mortgage was destroyed and the deed of trust in question executed. The defendant, W. H. Byan, was by this instrument made trustee with power of sale, and he immediately took possession of the entire assets belonging to the boot and shoe business. This trustee and defendant was a younger brother of John 0. Byan, Jr.; he was, and had been, for two years engaged as a clerk in the store and, as the evidence tends to show, was, and had been, in a condition to be fully informed of all the transactions hereinbefore stated. He, however, denied on the witness stand any such knowledge.
The testimony further shows that Byan, Jr., made repeated reports to the commercial agencies as to his standing as a merchant; that such reports (subsequent to the first, which we have quoted) were of the same general character, except, indeed, that the business was even on a more substantial basis than when he began; and in none of these reports did he ever disclose the fact that his father held a claim of any amount against
II. Now, there are several theories upon which the plaintiffs might recover these goods. The main fact, first, to be established is that Ryan, Jr., fraudulently acquired the goods, so as to authorize plaintiffs to rescind the contract of sale as to said purchaser, and reclaim said goods; and, second, it must appear that the beneficiaries in the deed of trust are not such bona fide purchasers thereof for value as will be protected even though Ryan, Jr., was guilty of the fraud charged. There is abundant evidence in this record tending to sustain the first of these propositions. The testimony in plaintiffs’ behalf tends to prove that the junior Ryan fraudulently ordered and secured plaintiffs’ goods, with no expectation or intention of paying therefor; that in order to get them he fraudulently, and know
In so far as the two banks were concerned, they are not to be regarded in the light of innocent purchasers for value. They were unquestionably honest creditors of Ryan, Jr., but as they parted with nothing when the deed of trust was executed, gave no new consideration, they are not to be regarded as bona fide purchasers for value. By the terms of the deed of trust, time of payment was only extended as to the “notes then due.” The notes of said banks, so secured by the deed of trust, were not due when said deed was executed.
As to Ryan, Sr., who claims to be a creditor by virtue of the note of $9,414.56 executed by his son August 8, 1893, there is abundant evidence tending to impeach his standing as even a genuine creditor of his son. The circumstances from beginning to end make plausible, at least, the claim that this St. Joseph enterprise was a mere scheme to affect a “wind up” of the Dakota store; that Ryan, Sr., adopted this plan of selling out the old, self-worn remnant of a stock of goods which he had at Spearfish. We might here refer to the circumstances attending that sale, the apparent high price at which the son at St. Joseph took the goods, the continued attention and solicitude the old gentleman gave to the St. Joseph store and his xeadiness to advance the necessary funds, from time
The same character of evidence tends to implicate W. H. Ryan, the brother of J. C. Ryan, Jr., and the trustee in the deed of trust made to secure the. senior Ryan and the two St. Joseph banks. He was not only the near relative of J. C. Ryan, Jr., but the evidence shows they were on the most intimate terms. W. H. Ryan was for two years a clerk in the store and the intimate and confidential companion of J. C. Ryan, Jr. The jury might well infer, then, from this and other circumstances that W. H. Ryan was cognizant of, and participated in, the fraudulent purposes
On a review of the entire evidence, as it has been presented here, we are of the opinion that plaintiff was entitled to go to the jury on the issues involved, and that the trial court, therefore, erred in sustaining a demurrer to plaintiffs’ evidence.
The judgment, therefore, will be reversed and cause remanded.
Rehearing
ON KEHEABING.
After the announcement of the foregoing opinion, respondent’s counsel appeared, and on their request and for good reasons shown, we have reconsidered the case, on additional briefs by both parties.
Counsel for respondent have argued that one of the notes held by the Commercial Bank of St. Joseph, and attempted to be secured by the deed of trust of Ryan, Jr., to W. H. Ryan, trustee, was, within the meaning of the parties, due on the day the deed of trust was executed; and that there was, therefore, as to it, an extension of time, which would constitute said bank a bona fide purchaser for value.
“The giving of further time for the payment of an existing debt by a valid agreement, for any period,
In the former opinion, we said that the note to the elder Ryan for $9,414.56 came under that designation of then due, but that the notes to the two banks were not then due, and hence there was, as to them, no extension of time. The Commercial Bank held two notes (included in the deed of trust), one for $1,000, executed. July 6, and the other for the same ¿mount, dated July 18, both containing a promise to pay ninety days after date. Including, now, days of grace, it is clear that the note dated July 6 did not become due till October 7, 1893. The deed of trust was executed October 6, 1893. When, therefore, the deed of trust was executed, this note was not due and, hence, there was no agreement to extend its time of payment.
Formerly, “days of grace” were days extended to the drawee of a bill or payor of a note, in the way of a favor from the holder; they were gratuitous merely, dependent on the pleasure of the holder of the bill or note and could not be claimed by the drawee or payor as a matter of right. “By custom, however, they became universally recognized; and though still termed ‘days of grace,’ they are now considered wherever the law merchant prevails as entering into the constitution of every bill of exchange and negotiable note, both in England and the United States, and form so completely a part of it that the instrument is not due in fact or in law until the last day of grace.” 1 Daniel
The note, then, of the Commercial Bank, made July 6, is to be treated as if it had named the due day October 7, 1893. Nor is there anything even extrinsic to the deed of trust that shows that the parties intended to consider the note as due at a prior date, or that there was any understanding that the time of its payment was extended. In fact, Mr. Hull, the bank’s cashier, though admitting that Mr. Ogden, the president, had most to do with the matter, testified that he “made no arrangement with Mr. Ryan to carry him beyond the time of the-maturity of these notes and never knew of any such arrangement.”"
It is needless for us to comment to any great extent on the last point made in respondent’s brief. There is abundant evidence disclosed in the record, tending to prove, not only that "W. EL Ryan, the trustee, had notice of his brother’s design to defraud the plaintiffs, but that said trustee actively participated in the scheme, and that the execution of this deed of trust was for the purpose of carrying out the same. This being so, the ease comes squarely under the principle announced in Crow v. Beardsley, 68 Mo. 435. We know of no later case overruling this and hence we are bound to regard it as controlling authority. Paraphrasing a statement contained in that decision, we may say: “If John C. Ryan, Jr., by the conveyance intended to defraud his creditors, and either the trustee or the beneficiaries were privy to such intended fraud, it would invalidate the conveyance.”
The fraud of John C. Ryan, Jr. (as it might be found from the evidence) consisted not only in the fraudulent purchase of plaintiff’s goods, but in the after disposition thereof. And from the evidence
We repeat, then, that the evidence adduced at the trial made a case ior the jury and it was error to take it from them. The judgment must be reversed and cause remanded.