| Mo. | Mar 30, 1899
In September, 1895, plaintiff began suit against defendants in the circuit court of Howell county on an open account, in aid of which an attachment issued, under which the sheriff seized the stock of merchandise in question, whereupon Butter filed a statutory inter-plea claiming that the attached property belonged to him. Plaintiff by answer denied Butter’s title apd averred that the goods had been transferred to him by defendants to defraud their creditors, and that Butter knew it at the time. The case was tried on that issue and the trial resulted in a
Upon tbe trial tbe interpleader introduced evidence tending to prove that at tbe time of tbe purchase of tbe stock of goods by him from defendants they owed him $1,600, for money loaned, wbicb was evidenced by their note then due; that in payment for tbe goods be delivered them their $1,600 note and $550 in cash and a check for $2,200 dated July 16, 1895, drawn by Eirst National Bank of Darlington, "Wisconsin, on Commercial National Bank of Chicago, to tbe order of E. A. Butter, tbe interpleader, and by him indorsed and delivered to defendants; that tbe value of tbe stock was $5,000 to $6,000; that they first offered it to him at $5,000 but the price finally agreed on was $1,350, wbicb was paid as above stated. That at. tbe time of tbe purchase inter-pleader bad no notice of any intent on tbe part of defendants to defraud their creditors if there was such intent; that immediately after tbe purchase interpleader took possession with a mew of continuing tbe business, and was so in possession when tbe sheriff seized tbe goods under tbe attachment in this case.
On tbe part of tbe plaintiff the evidence tended to prove that defendants at tbe túne of tbe sale owed about $5,000 for merchandise debts, and tbe next day after tbe sale notified their creditors that they bad sold out and offered to settle in full at fifty cents on tbe dollar; that two days after tbe sale tbe plaintiff and one or two other mercantile creditors sent representatives to Willow Springs, wbicb was tbe scene of the business, to investigate tbe matter. At this time the defendants still held tbe $2,200 check, and inter-pleader knew it, but they requested him to say nothing to tbe representatives of tbe creditors about it, for fear they would interfere with tbe collection; that in compliance with this request tbe interpleader declined to give tbe creditor any information on tbe subject. Tbe check was cashed in
Appellant makes several assignments of error, but the only one which is seriously insisted upon is the action of the court in refusing to treat the omission of interpleader to give information to the creditors about the $2,200 check, and failing to stop the payment of the check after notice that creditors suspected fraud, as evidence of fraud on his part, or rather as evidence of his participation in the alleged fraud of the defendants.
The concluding paragraph in the brief of the learned counsel is: “If it is the law that the mere giving of this draft was a payment, the action of the trial court in refusing the instructions of plaintiff was proper, and in conclusion we believe that this case should be settled finally by the decision of the Supreme Court; that no useful purpose can be attained by sending the case back for a retrial. If our theory is wrong, if interpleader was under no obligation to stop the payment of the draft, but had a right to assist the defendants in getting it cashed and the proceeds beyond the reach of their creditors, if nothing that he did or said could affect the validity of the transaction; we can not hope to get a verdict and, although there are some other errors, the judgment might as well be affirmed. If our position with reference to this draft is right, the undisputed evidence and the testimony of the interpleader entitles us to- a reversal with directions to the circuit court to enter judgment.”
The case will therefore be considered from that standpoint.
If the goods in question were sold in fraud of the creditors of the defendants, then, before the interpleader can be held to have acquired a valid title to them, it must appear that he bought and paid for them in good faith before he had notice of the fraud; or to state the proposition conversely, and nearer to the contention of appellant, though
But the law declared in those decisions must be understood as applicable to the facts of those cases. In the first case a check was given by the purchaser for the purchase money, which by agreement of the parties was to be withheld for a time, and the bank was instructed by the purchaser not to pay it until further order; then after notice of the attachment, the purchaser ordered the bank to pay it. Thus the check was in the absolute control of the purchaser, and its payment depended entirely on his will. And the other two cases were similar in so far as the principle now under discussion was concerned.
But the check here in question was not one drawn by Butter on his bank account, but one drawn by a bank in Wisconsin on a bank in Illinois, to Butter’s order, and by him indorsed and delivered to the defendants. It was a negotiable instrument [Shoe & Clothing Co. v. Crosswhite, 124 Mo. 34" court="Mo." date_filed="1894-07-09" href="https://app.midpage.ai/document/famous-shoe--clothing-co-v-crosswhite-8011449?utm_source=webapp" opinion_id="8011449">124 Mo. 34], and its indorsement and delivery to defendants was a payment pro tcmto for the goods. What legal right did Butter have to arrest the payment of that check, and how would he- go about doing it, and what effect would it have had on the rights of the parties to this suit and the check itself, if he had succeeded in stopping payment? Suppose as soon as he was informed that the creditors of his vendors suspected fraud, he had written the Chicago bank informing it that he had indorsed and delivered the check in part payment of a stock of goods which thereuj>on was delivered to him and was still in his possession, and to which he was still claiming title, but that since his purchase certain creditors
The right of a first indorser is not different in respect to the point we are now considering from that of a second indorser. Suppose the check had originally been drawn to the order of another person, and he had indorsed and delivered it for value to Lutter, and Lutter had then used it as he did in this case, and had then written to the Chicago bank as above suggested, and suppose 'that bank had obeyed the order and refused to pay the check when presented, although it had funds of the drawer in its hands sufficient for that purpose, and suppose while the payment was being held up to await the result of the controversy, the Wisconsin bank had withdrawn its funds from the Chicago bank, and failed, what would have become of the liability of the first indorser ? Or suppose the drawer had not withdrawn its funds, but during the suspense the Chicago bank had failed with sufficient funds to the credit of the drawer in its hands, what v ould have become of the liability of the drawer ? These suggestions are made, and the subject is susceptible of many more of like character, to illustrate the difference between the rights of the parties respecting the bill of exchange in this case and those in the cases above cited. The law attaches peculiar significance to a foreign bill of exchange, as
The instructions asked by the plaintiff on this subject seem to present two theories, one that it was the duty of Lutter to have stopped payment of the check, and the other that he ought to have given the diligent creditors information so that they could have attached pr stopped payment of it. The two theories are inconsistent. If Lutter had a right to stop payment of the check, according to one theory, it was because the consideration for his indorsement. and transfer had failed and he "was therefore entitled to the check himself, but if according to the other theory the creditors had a right to attach it, it could only be on the ground that it belonged to the defendants, and if the check belonged to defendants, the goods belonged to Lutter.
If the only complaint that the creditors have against Lutter is that he refused to give them information that would have facilitated them in finding assets of defendants on which to run attachments or garnishments, that complaint charges no breach of a legal-duty and does not affect his title to the goods in question.
We do not declare the law quite in the fullness of the language of the learned counsel for appellant, that “inter-pleader was under no obligation to stop the payment of the draft, but had a right to assist the defendants in getting it cashed and the proceeds beyond the reach of creditors,” because we do not think “that he had a right to assist the defendants in getting it cashed and the proceeds beyond the reach of creditors;” but we do hold that he was under no obligation to stop the payment of the draft because he had
The judgment of the .circuit court is affirmed.