Collins v. Wilhoit

108 Mo. 451 | Mo. | 1891

Black, J.

The plaintiff commenced this action of replevin before a justice of the peace to recover four hogs. He prevailed in the justice’s court and again in the circuit court. The Kansas City court of appeals, to which the cause was appealed, reversed the judgment of the circuit court and remanded the cause, and then certified the same to this court for the reasons hereafter stated.

The facts are these: Joseph Kindred recovered a judgment against McComas in 1885 or 1886. In October, 1887, McComas purchased from Collins, the plaintiff in this case, twenty head of hogs, including the four now in question. He did not pay for them, and it was verbally agreed between him and Collins that McComas should take possession of the hogs, but that they should remain the property of Collins until paid for. An execution was issued on the judgment in favor of Kindred against McComas and placed in the hands of constable Wilhoit, who levied the same on the four hogs in question on the fourteenth of December, 1887. The date of the execution is not given. Collins then commenced this suit, McComas not having yet paid for the hogs. There is some other evidence which will be noticed hereafter.

The case turns upon the question whether the court erred in refusing the following instruction asked by the defendant: “That if Collins sold the hogs in controversy to McComas and delivered possession of them to McComas, and at said sale it was agreed between them that the hogs were to be the property of the vendor until paid for, then said sale is void as against the creditor of the vendee, unless said condition as to ownership was reduced to writing, acknowledged and recorded as provided by law in cases of mortgages of personal property.”

The defendant bases his right to have this instruction given on the second clause of section 2505, Revised Statutes, 1879. The first clause provides : “ Every sale made by a vendor of goods and chattels in his possession or under his control, unless the same be accompanied by delivery in a reasonable time, regard being had to the situation of the property, and be followed by an actual and continued change of the possession of the things sold, shall be held to be fraudulent and void, as against the creditors of the vendor, or subsequent purchasers in good faith.” And the second clause is in these words: “And no sale of goods and chattels, where possession is delivered to the vendee shall be subject to any condition whatever as against creditors of the vendee, or subsequent purchasers from such vendee in good faith, unless such condition shall be evidenced by writing, executed and acknowledged by the vendee, and recorded as now' provided in cases of mortgages of personal property.”

Prom the foregoing statement it will be seen that Kindred recovered his judgment before Collins sold the hogs to McComas, so that he was a prior creditor of McComas. And the first question is whether the term “creditors,” as used in the second clause, includes prior creditors. The Kansas City court of appeals held in this case that it included prior as well as subsequent creditors, while the St. Louis court of appeals holds that it means subsequent creditors only. Defiance Machine Works v. Trisler, 21 Mo. App. 69; Knoop v. Distilling Co., 26 Mo. App. 303; State v. Green Tree Co., 32 Mo. App. 276. It is because of this conflict in the rulings of those courts that the case in hand was certified to this court.

The first clause of section 2505 is the old tenth section of the statute concerning fraudulent conveyances as amended by the General Statutes of 1865. In 1877 the legislature added the second clause by way of an amendment, and as thus amended the whole section was carried into the Revised Statutes of 1879. Prior to 1877, these sales, upon condition that the title should remain in the vendor until payment of the purchase price, were held valid as against creditors, though the condition was not made matter of record. Mfg. Co. v. Culp, 83 Mo. 548, and cases cited. Such sales became of frequent occurrence, and were productive of much mischief, and, hence, the new enactment. The fact that this new enactment was made by an addition to the old section as amended ip 1865, and the manifest similarity of the language used in the clauses, show quite clearly that the legislature used the term “creditors” in the second clause in the same sense in which it had been used in the first. Now, we have held that the first clause, in speaking of creditors, means and includes prior as well as subsequent creditors. Knoop v. Distilling Co., 102 Mo. 157. And this was doing no more than affirming what we consider to be a very well-understood rule. We are not to assign a different meaning to the woi d, as used in the second clause, from that accorded to it in the first, unless some good reason can be given for so doing. This, we think, cannot be done. The two clauses are certainly alike in this, that they seek to p event a false show of wealth. We think it will also appear from what is hereafter said, that each clause makes the described transaction void as to creditors, as a matter of law. The one seeks to protect creditors of ttie vendor, and the other creditors of the vendee, against a false appearance of ownership of personal property. Both Clauses are based upon the same policy,-and we have no-more right to substitute “subsequent creditors” for “creditors” in the one clause than we have in the.other. Our conclusion is that when the second clause speaks of creditors it means and includes prior as well as subsequent creditors. It is true this second clause works out its object by requiring the condition to be reduced to writing and recorded, and is, therefore, in a sense a recording act, but we do not see that that militates against the ■conclusion just expressed.

2. It is next insisted that the instruction was properly refused because it leaves out of view the evidence tending to show that Kindred had notice of the conditional sale. The plaintiff testified: “I told Kindred about selling the hogs to McComas on condition that they were to be mine until he paid for them ; this was at Smithville some time before the levy was made.” Though Kindred denies having such a conversation, there is here evidence that he had notice of the conditional sale before the levy of the execution ; so that the question arises whether actual notice to him is sufficient to take the case out of the statute.

. The statute declares that “no sale of chattels, where possession is delivered to the vendee, shall be ■subject to any condition whatever as against creditors ■of the vendee, or subsequent purchasers from such vendee in good faith, unless,” etc. In Coover v. Johnson, 86 Mo. 533, in construing this clause of the statute, we held that the expressions, “without notice,” and ■“in good faith,” are equivalent terms, and that the words, in good faith, refer back to and qualify the word ■creditors, as well as the words, subsequent purchasers. On further consideration, we are of the opinion that the ■conclusion then reached cannot stand the test.

In the first place such a reading is unnatural and strained; for creditors without qualification stand as ■one class, and subsequent purchasers in good faith as another and distinct class. Again, a creditor may be such in good faith, though he has notice of a prohibited transaction between his debtor and a third person. Here we may again obtain light by resorting to the settled meaning of like words found in the first- clause of the section. Under the first clause it has been held ever since 1865 that a retention of possession of personal property by the vendor made the sale void as a matter of law. Claflin v. Rosenberg, 42 Mo. 439; 44 Mo. 323; 56 Mo. 158; 67 Mo. 426; 68 Mo. 262. Notice of such a sale to a creditor is immaterial, for it is only notice of a transaction which is void by the rules of law. Lawrence v. Burnham, 4 Nev. 361; Hower v. Geesaman, 17 S. & R. 251; King v. Bailey, 6 Mo. 575. The same is true in respect of the second clause for notice ; to a creditor of the condition attached to the purchase is simply notice of a contract which, as to him, is void. This clause does not say, it is true, that the purchase of chattels upon condition shall be fraudulent, but it does say there shall be no condition whatever as to a creditor of the vendee, unless the condition is reduced, to writing, acknowledged and recorded. Unless this is done, the purchase is, as a matter of law, without condition as to creditors of the vendee. As to creditors, this second clause is also like section 2503, Revised. Statutes, 1879, which provides that no mortgage of personal property shall be valid against third persons, unless possession be delivered to the mortgagee, or the-mortgage be acknowledged and recorded. A mortgage of personal property which does not comply with this, statute is invalid, both as to creditors and purchasers, although they may have actual notice of it. Bevans v. Bolton, 31 Mo. 437.

Statutes on this subject of conditional sales have-been enacted of late years in many other states, but they are so unlike our statutes that the decisions of other states furnish no safe guide here. As has been said, these sales of personal property with attached verbal conditions, were the fruitful source of litigation, injustice and fraud. By the enactment in question, the-legislature has said that, as to creditors of the vendee, there shall be no conditions, unless reduced to writing and recorded. Full force and effect should be given to-this just and wise enactment; and in doing so it must be and now is held that snob verbal conditions are, as to creditors of the vendee, void as a matter of law, and, this being so, actual notice to the creditor of the conditional sale is immaterial. The case of Coover v. Johnson is, therefore, overruled, and it also follows that the instruction in question should have been given. The judgment of the Kansas City court of appeals is, therefore, affirmed.

Sherwood, O. J., dissents. The other judges concur.