Hanna v. Finley

33 Mo. App. 645 | Mo. Ct. App. | 1889

Gill, J.

The appellants assign the usual errors complained of, but in the argument, printed as well as oral, appear to rely on the failure of the court to give plaintiffs’ instruction in the nature of a demurrer to defendant’s evidence ; or, as it may be presented, that the instruction given at the instance of the defendant should not have been given.

The only declaration of law given by the court at. defendant’s request .is as follows: “13. If the court shall believe from the evidence that Ed. McLean was the agent and collector of Tootle, Hanna & Co., that Tootle Hanna & Co. told him to go to Liberal, Missouri, to look after and secure their claim against Sparks & Son, that as such agent and collector, in obedience to said instructions, he did go to look after and secure said claim, that in looking after said claim and for the purpose of securing the same, he entered into an understanding, agreement and contract with Sparks & Son, whereby the stock of goods in question were, by Sparks & Son, turned over to Tootle; Hanna & Co. for the purpose of securing their claim, and also for the further pur|>ose of and with intent to put the residue of said goods beyond the reach of other creditors of Sparks & Son, so as to hinder, delay or defraud said other creditors; that said purpose and intent to hinder and delay and defraud was understood, entered into and participated in by both Sparks & Son, and McLean, then said transfer of said goods was fraudulent and void as to the other creditors of Sparks & Son, and plaintiffs thereby acquired no right or title to said goods as against the attaching creditors of Sparks & Son, and the finding and judgment of the court should be for defendant.”

I. On an examination of the record of this cause we feel entirely satisfied that the court below committed no error in giving the foregoing instruction. It clearly defines the law governing such cases, as repeatedly ruled in this state, as shown by the following adjudicated cases: Kuykendall v. McDonald, 15 Mo. 416; Shelley v. Boothe, 73 Mo. 74; Mc Veagh v. Baxter, 82 Mo. 518; Holmes v. Braidwood, 82 Mo. 610 ; McNichols v. Rubleman, 13 Mo. App. 515. Creditors may, it is true, take in payment of their bona-fide claims the assets of the debtor and they will be protected therein so long as the transaction is not tainted by fraud on the part of the creditor. It will not invalidate the transfer if the result of such preference is even to absorb the entire assets of the debtor, and thereby deprive other creditors of means of satisfaction. But the creditor must himself act in entire good faith to secure his own claim. He may even know that the debtor is seeking to delay or defraud other creditors by paying the claim of the preferred creditor, yet so long as it may appear the sole purpose of the creditor to make himself whole by the payment of his honest claim the law will not attempt to undo the transaction.

If, however, the debtor gives over into the hands of the preferred creditor more of the assets than are reasonably necessary to pay such creditor’s claim, with the understanding that the creditor will hold and conceal the excess from other creditors for a time and then account to the debtor for such surplus, then the creditor has placed himself beyond the pale of the law’s protection and the transaction will be held void in toto, so far as other creditors are concerned. Holmes v. Braidwood, supra, 616, and authorities there cited.

“A conveyance, the consideration of which is partly to hinder, delay or defraud creditors” (with the knowledge and agreement had between grantor and grantee) “is void in toto I McNichols v. Rubleman, supra, 522.

So, too, the refusal of the trial court to declare that the testimony introduced by defendant. constituted no defense to the action, was certainly proper. There was ample evidence which, at least, tended to show on the part of the debtors a design to hinder or delay, if not to defraud, other creditors by placing the assets not necessary to pay plaintiffs’ claim out of the reach of the other creditors, and there was also abundant evidence tending to establish the participancy of the plaintiffs in such design. The goods were reasonably worth, as the evidence shows, quite double plaintiffs’ claim, and the evidence tends, at least, to show that plaintiffs’’ agent intended, not only to secure tlie plaintiffs, but also further intended to cover up by this transfer this large excess, and thereby place such excess beyond the reach of the remaining creditors.

We see nothing in this record to justify disturbing the judgment of the circuit court. The case was fairly tried and the law properly declared. Judgment affirmed.

All concur.