This is a suit by the trustee in bankruptcy of the Cramer Safe Company to set aside an alleged bill of sale made by the Cramer Safe Company to defendant, to recover funds of said company appropriated by defendant after the execution of said bill of sale and to obtain the remainder of the Cramer Company’s property held by defendant, or its reasonable value, at the trustee’s election.
The first answer was a general denial, but later an amended answer was filed admitting the execution of the bill of sale and stating the reasonable value of the property described therein to be not more than $1200. The answer further alleged that defendant had paid $236.75 to plaintiff by mistake and that plaintiff had collected $50 belonging to defendant, and then asked a judgment for $286.75. For a further defense the answer set up that at the date of the bill of sale the Cramer Company was indebted to defendant in the sum of $3704.52; that between said date and June 24, 1909, said Cramer Company became further indebted to defendant in the sum of $1226.48, but that said Cramer Company had paid on the indebtedness accruing prior to January 27, 1909, $1016.94, leaving due defendant the sum of $318344, which the court was asked to decree as a claim against the estate of the bankrupt and to declare it a set-off against any amount found due from defendant on account of any property of the bankrupt received into defendant’s possession.
The case was tried and submitted by both sides as one in equity. The chancellor found the bill of sale
Defendant appeals, and one of its grounds is that the petition and evidence does not entitle plaintiff to equitable relief.
We take this to mean, either that the suit cannot be maintained in equity because plaintiff has an adequate remedy at law, or that the evidence is not sufficient to entitle plaintiff to recover, and not that, for any other reason, plaintiff should have sued at law instead of in equity. The only reason for preserving the distinction between an action at law and one in equity, under our code, is in order that either party may demand and have a jury if the case be one at law. [McKee v. Allen, 204 Mo. l. c. 604.] In the case before us the cause was submitted to the court with no demand for a jury, no point was made as to the method of trial, no demurrer to the evidence submitted, no request made for declarations of law, and no point raised in the motions for new trial or in arrest that there was no jury trial. Hence, even if it were purely a law case, a jury was waived. [Barber Paving Company v. O’Brien, 128 Mo. App. l. c. 78.] And if the petition states a cause of action and the evidence is sufficient to sustain a judgment and the latter is within the pleadings, plaintiff must prevail. [Bagley v. Tyler, 43 Mo. App. l. c. 201.]
But, as to the point that there is an adequate remedy at law, we are of the opinion that, even if plaintiff has a legal remedy, still this ease falls within
To properly understand the points hereinafter considered it is necessary that the facts be first briefly stated.
Defendant, a New Jersey corporation with offices in that State, is a manufacturer of safes. The Cramer Safe Company, located in Kansas City, was> engaged in selling new and second-hand bank and other safes and doing repair work on others. Safes sent by defendant to it on consignment remained the property of defendant until sold, though sometimes the Cramer Company would receive the proceeds of a sale and keep the same giving defendant a note therefor. All new safes of other makes and second-hand safes received by the Cramer Company in exchange for safés sold by them were the property of the Cramer Safe Company.
On January 27, 1909, the Cramer Safe Company owed defendant a large sum for which notes had been given. It also owed other creditors and was in financial straits. On the date mentioned it executed to defendant a bill of sale of all its property that it then had, and which it might acquire within one year from
On July 6, 19091, the other creditors of the Cramer Safe Company filed a petition against it in bankruptcy and on October 24, 1909, it was adjudged a bankrupt and plaintiff herein was appointed trustee, all within four months after defendant had taken possession of the stock under its alleged bill of sale. When defendant took possession it did not deliver up the' notes it held against the Cramer Safe Company, but, as stated before, took possession as if the bill of sale were a mortgage, which it was as the evidence clearly showed.
A preliminary proposition submitted inferentially by defendant is that under no view .of the evidence could the trial court find that the bill of sale was fraudulent in law or in fact.
The bill of sale was absolute on its face but was in fact a mortgage. It was given on a stock of goods in trade. It remained a secret matter between defendant and the Cramer Safe Company for nearly five months thereafter. No possession was taken of the stock under the bill of sale until after the expiration of that time. During that time the Cramer Safe Company was allowed to continue doing business in its own name and as apparent owner. When possession was taken by defendant it did so claiming to be absolute owner. Defendant also, notwithstanding its possession of said property and its ability to show exactly what was taken possession of and its value,
Defendant claims that the bill of sale is not a voidable preference because, 1st, the Cramer Safe Company was not shown to be insolvent at the time the bill of sale was given; 2nd, because the bill of sale was not given within four months of the petition in bankruptcy; 3rd, because its effect was not such as to enable the defendant to obtain a greater percentage of its debt than other creditors of the same class; 4th, that defendant had no reasonable cause to believe that it was intended thereby to- give a preference. The Bankrupt Act as it existed in 1909; the date of the bill of sale, required all four of those elements or conditions in order to constitute a voidable preference.
The contention that, although possession under the bill of sale was taken within four months before the filing of the petition in bankruptcy, yet as it was executed more than four months prior thereto, this did not make the bill of sale void as a preference, is untenable. A correct interpretation of paragraphs A and B of section 3 and of paragraph B of section 60 of the Bankrupt Act, (which renders void any transfer which the transferee may have had reasonable cause to believe was intended to be a preference if given within four months of the filing of the petition,) .discloses that the four months does not begin to run until the creditors have in some form received actual or constructive notice of the transfer. [Landis v. McDonald,
With reference to the contention that by the bill of sale it was not intended to give a preference, it might be said that it could be so held since that was so obviously and inevitably its effect; And, in this State at least, a person is presumed to intend the natural and probable consequences of his own act. Here it was not only the probable but the inevitable consequence of the debtors act that the creditor would be preferred. Of course this provision of the Bankrupt Act means that the debtor, the Cramer Safe Company, must have intended the preference and that the defendant must have reasonable cause to believe that it did so intend. [In re Nat’l Bank,
The objection that the petition is insufficient because it contains no allegation charging that the enforcement of the transfer would enable the creditor to obtain a greater percentage of his debt cannot be upheld. For even if it be conceded, which we do not, that'the petition does not contain all the facts necessary to show a voidable preference, still enough has been stated to make it good after judgment, especially as it was not attacked in any way for insufficiency.
It is also contended that the evidence is not sufficient to warrant the amount of the money judgment. We have carefully gone through the entire record and find there is ample evidence to justify the learned chancellor in all of his conclusions. We have not deemed it necessary to set out the testimony, or even an extended analysis of it, as this would serve no good purpose and would render this opinion interminable.
Error is also claimed on account of the admission of certain of the Cramer Safe Company’s account books and certain lists made up from these books. The purpose in offering the ledger accounts was in an attempt to hold the safes consigned by defendant to the Cramer Safe Company by showing that they were charged to the latter and treated as its property on its books. But the court held with defendant as to consigned safes. So that the admission of the ledger account cannot be held harmful even if it should be considered error. The other books were offered to show the indebtedness of the company, and they were
The final contention is that the finding and judgment is not responsive to nor authorized by the pleadings because the petition prayed that defendant be ordered and adjudged to account for and pay over to him the proceeds of the property sold and to turn over and deliver to him the remainder of the property or at his election, upon the trial, pay him the reasonable value thereof. But the petition stated facts, which, if established, would entitle plaintiff to either one of the alternative reliefs prayed for. The case is not like that of Schneider v. Patton,
We have carefully gone through the evidence and authorities in this case and have examined both minutely in order to be in a position to properly dispose of the case. No good reason for disturbing the chancellor’s decree has been found. It is accordingly affirmed.