Hunter v. Mathewson

149 Mo. App. 601 | Mo. Ct. App. | 1910

GOODE, J.

This action is in the nature of a suit in equity and the purpose is to restrain the defendants,A. G. Mathewson and Mabel Mathewson Howlett, from collecting certain allowances made in their favor by W. H. Garanflo, as general assignee for the benefit of creditors of the Mathewson Mercantile Company, and from selling or transferring said allowances until after the Supreme Court of the state shall determine an appeal pending in said court, wherein the present plaintiff is plaintiff and said assignee, Garanflo, is defendant, and wherein the plaintiff seeks to subject the funds of the Mathewson Mercantile Company in the hands of said assignee, to the payment of certain notes held by plaintiff against said Mercantile Company. The facts shown by the evidence and found by the court are these: In *605February, 1902, the Mathewson Mercantile Company, a corporation, executed and delivered to plaintiff three promissory notes, one for $1700 due on demand, one for $5000, due two years after its date, and one for $5000, due three years after its date, drawing interest at the rate of eight per cent per annum, compounded if not paid annually. On the $1700 note, three payments, amounting to $654.30 were made at different times; and on the second of the $5000 notes, three payments amounting to $1220 were made. The $1700 note was executed by the Mercantile Company to plaintiff for money he had lent it and the other two notes were executed in the name of the Mercantile Company by defendant A. G. Mathewson and Mabel Mathewson (afterwards Mabel Howlett) to pay plaintiff for one hundred shares of the capital stock of said company, which he assigned and transferred to the two defendants A. G. and Mabel Mathewson. Plaintiff had paid $10,000 in cash into the Mercantile Company in payment for said shares of stock. When the two defendants bought plaintiff’s shares, they became and continued to be the sole owners of all the stock of the company, and being owners of it, executed the notes to plaintiff, and at the same time executed, in the name of the Mathewson Mercantile Company, a deed of trust to E. C. Phillips on real estate belonging to the Mercantile Company. Later, in June, 1905, the Mercantile Company having fallen behind in the payment of its obligations, executed an assignment of all its assets to W. H. Garanflo, as assignee for its creditors. Said assignee thereafter allowed the three notes previously made to plaintiff in the name of the Mercantile Company as a demand against its assets. Thereupon an agreement was made between plaintiff and the other creditors of the Mercantile Company by which the assignee was allowed to sell the property which had been conveyed to Phillips as trustee for plaintiff, upon the understanding and agreement that plaintiff would be permitted to apply to the assignee and *606the court administering the estate, for an order permitting plaintiff to claim, as a secured and preferred creditor, so much of the proceeds of the real estate as would discharge the notes he held which were secured by the deed of trust constituting a first lien on said real estate. Pursuant to this agreement Garanflo, as assignee, sold the real estate, making the announcement at the time of the sale that plaintiff would look to the proceeds for satisfaction of his lien instead of the property itself. Thereafter plaintiff filed an action to recover from the assignee enough of the proceeds of the assigned estate to discharge his notes, but other creditors resisted the action and the court determined adversely to plaintiff, who took an appeal to the Supreme Court, where the cause was pending when this suit was instituted. The two defendants presented claims to the assignee for services rendered to the Mercantile Company. The former was allowed $1678.58 by the assignee and the latter $648.68. It is those allowances the plaintiff seeks to restrain the defendants from assigning or transferring to any one else until the cause in the Supreme Court is determined. The court below found that in equity plaintiff had the right to follow said sums and have the same applied in satisfaction of the claim for stock he had sold to defendants, in case plaintiff should not succeed in recovering the amount of his notes from the Mercantile Company in the action pending in the Supreme Court. A decree was entered below restrain? ing defendants from collecting or transferring said allowances.

This suit must fail. It is neither alleged nor proved the two defendants are insolvent so that if plaintiff’s action against the proceeds of the Mercantile Company in the hands of the assignee should fail, he would not be able to collect from the defendants, if in fact they owe him anything. Moreover, he has not instituted an action for judgment against defendants on the notes,, but on the contrary is proceeding on the theory the cor*607poration is his debtor. However, the essential fact is he has established no demand by judgment against the two defendants and this proceeding being in the nature of a creditor’s bill, it will not lie. [Atlas Bank v. Packing Co., 138 Mo. 59, 39 S. W. 71; Luthy v. Woods, 1 Mo. App. 167.]

But it is contended that by virtue of the deed of trust' plaintiff had a first lien on the land covered by it to secure the notes in question, which lien he relinquished in consideration of an agreement with the other creditors of the Mercantile Company he should have the right to apply for payment out of the proceeds either of the land or the general assets of the company, the record is not clear which. One answer to this argument is that the court which tried the other action decided, on some ground, plaintiff was not entitled to be paid the notes out of any of the assets of the Mercantile Company, and until the judgment is reversed by the Supreme Court, we must presume it was right. The court below made this finding:

“The court further finds that the defendants A. G. Mathewson and Mabel Mathewson, were the executive officers of said Mathewson Mercantile Company and that all moneys paid into said company for stock or otherwise had the legal effect to and did increase the value of the assets of said Mercantile Company to that extent, so that in equity and good conscience, the sale by plaintiff of said stock in said company, to A. G. Mathewson and Mabel Mathewson, had the effect to and did increase the' holdings of these defendants, A. G. Mathewson and Mabel Mathewson, to that extent, and that in equity and good conscience these defendants A. G. Mathewson and Mabel Mathewson Howlett should be and are liable to the plaintiff for the balance due on said notes.”

The court may have had in mind the doctrine that the owner of a fund may follow it into the hands of an assignee for creditors and secure a lien on the assigned *608assets if he can show his money passed to the assignee. [Paul v. Draper, 158 Mo. 197, 59 S. W. 77.] The doctrine is not applicable here, because it is clear no money belonging to plaintiff was assigned, and the foregoing finding is wholly irrelevant. The money he paid in for the capital of the company may have purchased some of the assigned property, but that fact would give him no right to a preference out of the assets even if the company owed him, and certainly can give him none if the individual defendants owe him. It is difficult to discern the import of the finding. The gist of this case is that plaintiff is pursuing in another suit the assignee, on an alleged agreement made with the other creditors of the company that he should have a preference out of the assets, and on the theory that the company owes him; so far he has not prevailed in that suit, and in this one he seeks to prevent these defendants from disposing of allowances in their favor, on the theory that if he does not recover in the other suit from the company, he will be entitled to recover from defendants, against whom, be it remembered, he is not now proceeding as his debtors. There is no principle' of equity with which we are acquainted that is a basis for such relief. An obstacle to present relief, if there is no other, is the petition neither seeks judgment against defendants for the indebtedness evidenced by the notes, nor alleges any impediment to recovery from them by execution if they owe it- — neither alleges nor proves their insolvency. Hence shows no cause for extraordinary relief in equity.

Judgment reversed.

All concur.