42 Mo. App. 171 | Mo. Ct. App. | 1890
This an action by attachment. The facts out of which the action arose are that the plaintiff sold and delivered .to defendant Rinehart a bill of California wines amounting to four hundred dollars on four months’ time. The defendant being indebted to the interpleader bank in the sum of four thousand dollars, and in order to secure said indebtedness, executed to it a chattel mortgage, whereby he conveyed to it all of the goods in his store, which included the goods which had been sold and delivered to the defendant by the plaintiff, and which had not been paid for. The plaintiff brought its suit against defendant, and caused the goods which it had sold defendant and which were then in the hands of the interpleader to be levied upon under the writ of attachment. The interpleader interposed its claim to the goods under the mortgage which the defendant had executed to it. The court, being requested by the parties to make a finding of the facts in the case and conclusions of law thereon, thereupon made the following special finding of the facts and conclusions of the law thereon •
*177 “First. That the plaintiff sold to the defendant in attachment suit, James H. Rinehart, the goods levied on by the sheriff under the' writ in said suit, the purchase price of which is sued, for in said suit, and that the goods have not been paid for, and that there is due plaintiff for them the amount claimed in the petition.
‘‘ Second. That the title and right of the interpleader depends upon the mortgage read in evidence by said Rinehart which was given simply to secure a pre-existingdebt, viz., a debt existing prior to the sale of the goods by the plaintiff, and that possession was given to inter-pleader by Rinehart of the goods, for the price of which suit is brought, under the mortgage, prior to the issuing and levying of the writ, and that no other consideration passed from the interpleader to said Rinehart for said mortgage. The court concludes the law to be, that, upon the facts above found, the judgment should be against the interpleader.”
The finding and judgment were for the plaintiff. The interpleader appealed.
I. The first question presented by the record before us for our decision is : “ Can the right of a seller conferred by section 4914, Revised Statutes, 1889, to subject the personal property sold by him to the payment of the purchase price thereof, be enforced by attachment under circumstances justifying a suit by attachment against'the vendee?” Upon the authority of Parker v. Rodes, 79 Mo. 91, and State ex rel. v. Mason, 91 Mo. 132, this question must be answered in the affirmative.
II. The second and decisive question in the case is, whether a mortgage of the vendee in possession of the personal property sold by the vendor to the vendee, where the sole consideration of the mortgage was a debt, which existed at the time of the sale of the property on which the mortgage was afterwards given, is an innocent purchaser for value without notice within the
In Goodman v. Simmonds, 19 Mo. 107, it was said that “we do not say that a bill of exchange passed to a person, in payment of a pre-existing debt, would be liable in Ms hands, without notice to the equities or defenses of the original parties; but that the holders of a bill merely as collateral security for a pre-existing debt, having given no value for it, no consideration for it, hold it liable to such equities.” In Feder v. Abrahams, 28 Mo. App. 454, it was said that “plaintiffs claim that the decision in Deere v. Marsden, 88 Mo. 512, questions the rule stated in Hess v. Clark, 11 Mo. App. 492. This is, however, an obvious mistake. The supreme court in that case simply reaffirms a proposition which has been the law of this state since Goodman v. Simmonds, supra, that one who takes collaterals for a pre-existing debt, without any new consideration to support the transfer, is not a purchaser for value of such collaterals. A similar ruling was made in Terry v. Hickman, 1 Mo. App. 123, and in Brainard v. Reavis, 2 Mo. App. 490. In Logan v. Smith, 62 Mo. 455, it was said : “ Logan took Smith’s note as a collateral security, not for a pre-existing debt, but for a debt created at the time and in the faith thereof, with notice of no equities and he thereby undoubtedly became a holder for value.”. In Deere v. Marsden, 88 Mo. 512, it is declared that “ As to a pre-existing debt, if there is an express agreement on the part of the creditor to forbear suit until the collateral shall mature, the agreement to delay constitutes the transferee a holder for value. The extension of time for the payment of past indebtedness, if for a day only, constitutes a new and sufficient consideration.” Daniel Neg. Inst. [3 Ed.]829 ; Oates v. Bank, 100 U. S. 247 ; Smith v. Worman, 19 Ohio St. 148.
In Hodges v. Black, 8 Mo. App. 389, it is said that “if negotiable paper be taken without notice, before
The rule it announces was expressly invoked and applied in Terry v. Hickman, 1 Mo. App. 119, and in Hodges n: Black, 8 Mo. App. 389. In the latter of these cases the former is cited with approval, and the supreme court, on appeal in the latter to that court, adopted the conclusions of the court of appeals, and affirmed the judgment. 76 Mo. 537, already cited. In Tufts v. Thompson, 22 Mo. App. 564, the rule laid down in Goodman v. Simmonds was quoted with approval. So that the case in 38 Mo. has been passed by in the more recent cases just as it passed by unnoticed the previous case in the 19 Mo. This diversity of judicial opinion has involved the law on the subject of commercial paper in this state in what is a seeming inextricable confusion. But we think in the course of judicial decision on the subject the appellate courts 'have recognized Goodman v. Simmonds, and to it we must look for the rule of law now prevailing in this state applicable to negotiable paper taken as collateral security, where there is no consideration other than a pre-existing debt. Prom these decisions we deduce these conclusions :
First. That the rule as to the taking of negotiable paper for an antecedent debt is applicable to the taking of personal property for that purpose ; second, that the holder of negotiable paper as collateral for a pre-existing debt, having given no consideration for it, holds it liable to the equities existing between the original parties; third, that the taking of negotiable paper as collateral security for a debt, created at the time on the faith thereof, without notice of equities, renders the taker a holder for value. So, the taking of negotiable paper as collateral for a pre-existing debt where there is an express agreement that the creditor will forbear suit until the maturity of the collateral. So, where
Applying these rules to the facts of this case, and it becomes apparent that the interpleader was not an innocent purchaser of the property in question for value. The property was not taken from the defendant in consideration of the satisfaction or extinguishment of a pre-existing debt, nor was there an extension of time or forbearance, or anything parted with or lost by the interpleader. He occupies the attitude of a holder of a negotiable note merely as collateral security for a pre-existing debt; having given no value nor consideration for it he holds it subject to the equities of the original parties. The result under the rule applicable to this case is just the same as if the defendant instead of transferring to the interpleader wines had transferred to him a negotiable note made to him by plaintiff and not due, one which was subject to certain equities of which the interpleader had no knowledge. ’ The transfer in either case being to secure a pre-existing debt would not cut off the plaintiff’s equities. Whether commercial paper or personal property the rule in such cases is identical. The interpleader in this transaction cannot be held, within the meaning of any of the rules referred to, a purchaser for a valuable consideration, and, therefore, he is not protected against the equities of the plaintiff.
The established rule of the supreme court of the United States, in respect to the taking of commercial paper as security for a pre- existing debt, is exactly the conversé of that which has been declared, as we understand it, by the supreme court of this state. In that court it has been held that a tona fide holder, taking a negotiable note as a security for a pre-existing debt, is a holder for a valuable consideration, entitled to protection against all equities between the antecedent parties.
And it is stated by Mr. Pomeroy, in his work on equity jurisprudence, volume 2, section 749, that “ A conveyance of real or personal property as security for an antecedent debt does not, upon principle, render the transferee a bona fide purchaser, since the creditor parts with no value, surrenders no right, and places himself in no worse legal position than he was before.” This author notes the distinction between the transfers of commercial paper and other property which we have already referred to. And in this state, in respect of the conveyance of land, “subject, in the hands of the grantor, to prior unrecorded conveyances, vendor’s liens, resulting trusts, or other secret equities,” it has been uniformly held that, “ in order to entitle the innocent grantee to protection against a prior unrecorded conveyance, vendor’s lien or other equity, he must have parted with something of value as a consideration, before receiving notice of the prior conveyance or equity.” Conrad v. Fisher, 37 Mo. App., loc. cit. 412; Aubnchon v. Bender, 44 Mo. 560; Halsa v. Halsa, 8 Mo. 303; Choteau v. Burlando, 20 Mo. 482 ; Paul v. Fulton, 25 Mo. 156; Digby v. Jones, 67 Mo. 107; Bishop v. Schneider, 46 Mo. 482; Rice v. Bunce, 49 Mo. 235 ; Fox v. Hall, 74 Mo. 317.
Whether we apply the rule in relation to the taking of commercial paper as security for a pre-existing debt,
It follows from these considerations that the circuit court did not err in its rulings and finding, and, therefore, its judgment is affirmed.