Pomeroy v. Selmes

| Mo. | Jul 15, 1844

Tompkins, J.,

delivered the opinion of the Court.

This was an action of assumpsit, brought by George Pomeroy against Selmes, in the Court of Common Pleas of St. Louis county. The declaration contained three counts, on three several notes, purporting to be made by one James McFarlane, to Selmes, the defendant, and by Selmes assigned to the plaintiff, Pomeroy, all bearing date in May, 1842. The common counts were also contained in the declaration. The plaintiff made affidavit, that he believed Selmes had fraudulently disposed of his property and effects, so as to defraud and delay his creditors, and procured an attachment to issue. The sheriff returned, that he had attached certain property as belonging to Selmes, the defendant, and read the writ to him, &c. At the return term of the writ, judgment by default was entered upon the instrument of writing sued on, for $913 49.

One Charles K. Dickson claimed the property attached, and interpleaded. Verdict and judgment for Dickson, the interpleader. Execution was issued by Pomeroy against Selmes on the judgment obtained against him, and it was returned, “No goods, chattels, lands or tenements found,” &c.

Dickson, the interpleader, claimed the property attached, under a deed of assignment made to him by the said McFarlane, the maker of the notes, on which action is founded. The deed sets out, that McFarlane, being unable to meet all his debts, &c., and deeming it just and reasonable to give all his creditors an equal chance of payment, a general assignment of all his goods, Sec., for the benefit of creditors, pro rata, See., grants, bargains, conveys, assigns, transfers, &c., unto Dickson, &c., all his stock in trade, g.oods, wares and merchandize, debts, choses in action, &c., upon condition that Dickson sell and dispose of them; first, for the benefit of McFarlane’s creditors, and then, if any balance be left, to refund it to McFarlane. After reading the deed of assignment, Dickson, the interpleader, examined seven witnesses, the object of whose testimony appeared to be, to prove that Selmes commenced business in St. Louis in 1839, and continued it about one- and-a-half years, with'McFarlane as his clerk; that, in the Spring of the year, 1841, McFarlane’s name was used in the business; Selmes’ sign was taken down, the goods removed to a house on the opposite side of the street, and ■McFarlane’s name used, and his sign put up about the same time; that Selmes stated, that he sold out to McFarlane, and he also stated, as his reason for so doing, that he, Selmes, was greatly indebted in New York; that he wished to protect his St. Louis creditors with his property here; that he had been befriended in St. Louis, by persons to whom he was then indebted, and had made much money in his business there. One of these witnesses stated, that, “After the sale from Selmes to McFarlane, Selmes generally transacted the business, especially of buying goods, &e.; that whenever notes were given for the purchase of goods, after McFarlane’s name was used in the business', McFarlane’s name was generally signed as maker of the notes, and Selmes endorsed them.” This witness stated,'that he sold goods to Selmes for McFarlane; that he took notes from McFarlane to Pomeroy, the plaintiff, for goods sold, Sfc., which notes were endorsed by Selmes; the witness also stated, that after McFarlane had put up his sign as aforesaid, he had informed Pomeroy, the plaintiff, that Selmes had told him (the witness) about his affairs and business arrangements with McFar■lane. Much other evidence was given by Dickson, thp interpleader, to show that McFarlane bought much merchandize in his own name, for which he gave notes not endorsed by Selmes, and that he paid for goods also. It was also in evidence, that Selmes, after the sale of his stock in trade to McFarlane, acted as clerk to McFarlane. It was also in evidence, that the firm of Ruggles & Chase, before the sale by Selmes to McFarlane, had sold goods to Selmes, to the amount of $2,000, which was paid by him, and that after the transfer of the stock in trade by Selmes to McFarlane, the same firm had sold "goods to McFarlane, and had received therefor McFarlane’s notes endorsed by Selmes, and that the said firm had refused to sell to Selmes, on his own credit, after he had transferred his goods to McFarlane.

On the part of Pomeroy, the plaintiff, it was given in evidence that Selmes told two wholesale houses in St. Louis, while he was doing business in his own name, that he was much involved in debt in New York, and that he feared he should be interrupted on that account. On this account, he afterwards stated to them he had transferred his goods to McFarlane, in order to' protect his St. Louis creditors. To one of these two houses, he confessed judgment for a much larger amohnt than he owed, in order to secure them as well for moneys already due, as for future liabilities.. It was testified that Selmes and McFarlane, in a conversation held with Johnstone, a partner in one of these houses, stated that the change from Selmes’ name to MoFarlane’s was mere matte'r of form, to avoid Eastern creditors. This witness (Johnstone) stated, that he was a confidant and friend of Selmes, and was advised with in relation to this change. From the evidence, it appeared to be the practice of both of these wholesale houses to make both Selmes and McFarland responsible, after the business was done under the name of McFarlane. One of the witnesses, who had sold goods to Selmes before the transfer to McFarlane, took a confession of judgment from both Selmes and McFarlane, to the amount of $15,000, for the purpose of securing him for goods, sold after the transfer to McFarlane, as well as for the previous indebtedness of Selmes. Other testimony was given by the plaintiff, Pomeroy, the object of which was to prove, that Selmes was the principal person in the business of McFarlane, although the business was done under the sign of McFarlane, and Selmes professed to be the clerk of McFarlane.

The plaintiff then prayed the court to give the instructions following, to wit:

1st. If they believe, from the evidence, that the goods assigned to Dickson were, at the time, the property of Selmes, they will find for the plaintiff in attachment.

2d. If they believe, from the evidence, that Dickson, the interpleader, only claims the property as assignee of McFarlane, for the benefit of McFarlane’s creditors, he does not stand#in the character of a purchaser for a valuable consideration against the creditors of Selmes.

3d. That, although Selmes, in this transaction, might not be able to control or annul his own act in the transfer of the property in question to McFarlane, yet the creditors of Selmes are not included, and such creditors may pursue the property by attachment, in the hands of any person not a bona fide purchaser.

The court refu sed to give these instructions.

The court then instructed the jury as follows:

1st. The interpleader establishes a prima facie right to a recovery, by showing that the goods were in his possession at the time of levying the attachment, by virtue of an assignment from'McFarlane, and that the goods attached were goods which had been, previous to the assignment, in the store and apparent ownership of McFarlane.

2d. The fact, that McFarlane was not in fact the owner of the goods, but that they were put in his possession by Selmes, merely as a cover to protect them from the creditors of said Selmes, is not sufficient to defeat the interpleader’s right of recovery, unless the jury believe that the exact position which the parties, Selmes and McFarlane, occupied, was of such general notoriety as to be known to all those who traded with and credited McFarlane, and particularly the creditors for whose benefit the present interpleader is trustee.

3d. If a man, for the fraudulent purpose of protecting his property from his creditors, puts it into the hands of another, who holds himself out to the world as the owner thereof, and goes into business, and trades with this property, with, the consent of the real owner; and if such holder of the goods, while they are thus in his possession, makes a general transfer thereof, for the benefit of his creditors, which were creditors created in the course of such business, either entirely or partly, such transfer is good and valid, even as against the attaching creditor of the real owner.

The court gave these instructions as above-mentioned, and then it is added, “ to all which instructions, and decisions, and refusals, the plaintiff, by his counsel, excepts.”

The plaintiff moved the court for a new trial, for reasons eommon to all suits,: and therefore not necessary to be mentioned, and excepted to the overruling of his motion.

This suit was tried at the August term, 1842, and at the next term, to wit, at the November term of the said year, the hill of exceptions appears, from the record, to have been presented for the signature of the judge. In 1 Bacon, 530, it is said, that although no time be appointed by the statute, yet the bill must be presented at the same term. In 4 Peters, p. 107, the late Chief Justice Marshall says, "It would he dangerous to allow a bill of exceptions, of matters dependant on the memory, at a distant period, when they may not be accurately recollected, and the judge should not allow it.”

To avoid the evils anticipated by the English courts, as well as those of the United States, from the neglect of the law-makers to declare at what time the hill is to be presented for the signature of the judge, and to leave as little room as possible to judicial discretion, our statute expressly provides, that the exceptions shall be taken, and the hill presented, during the progress of the cause. ( See act to regulate practice at law, sec. 20, art. 4, p. 464 of Digest of 1835.) It would not, perhaps, be denied, that the hill might, by consent of parties, be presented for the judge’s signature, even at the next term; but no such consent appears on record. For the construction given to the act, Consaul vs. Liddel, 7 Mo. Rep., 253, may he consulted; there the subject is more fully treated of. But the plaintiff also moved for a new trial, for common reasons, one of which is, that the verdict is against evidence. Although the bill of exceptions is wanting, and we have, properly speaking, neither evidence, nor exceptions to instructions, nor a motion for a new trial before us, yet it may not be amiss to take a view of the case, as presented by the evidence irregularly spread before us.

The plaintiff, here appellant, has proved to us that Selmes, the defendant, came to St. Louis in the year 1839, and expressed great solicitude to protect his creditors there from the claims sent against him by creditors left by him in New York; and for this purpose he,tin the year 1841, sold, or offered to sell, to his clerk, McFarlane, all his stock of goods, and that stock being removed to another house, where McFarlane’s sign was raised, the defendant (Selmes) there officiated as McFarlane’s clerk. The notes here sued on were made by McFarlane to Selmes, and by him endorsed to the plaintiff, Pomeroy, probably for the very goods which Pine, a witness for Dickson, says that he sold to Selmes, for McFarlane; for he adds, that he took notes from McFarlane to Pomeroy, the plaintiff, for goods sold, &c., which notes were endorsed by Selmes. The witness further added, that after McFarlane put up his sign, as aforesaid, he had informed Pomeroy, the plaintiff, that Selmes had told him (the witness) about his affairs and business arrangements with McFarlane. It is not in evidence, that either Dickson, or those for whom he is trustee, were affected with any notice that Selmes had made his arrangement with McFarlane to sell his goods, merely to defraud his New York creditors; hut, on their part, all appears fair; whilst it appears that Pomeroy, the plaintiff, sold his goods to this same McFarlane, to he retailed out by him, in his own name, and as his own property, relying on Selmes as his security, If the evidence eyen copne.cted SsJmes with McFarlane, as an associate in a fraudulent design to cheat Pomeroy, lie lias no right to complain of Dickson, and those for whose benefit the assignment is made, so long as they are not proved to .be privy to the fraud. Pomeroy not only had the notice which all the rest of the world bad, that McFarlane was doing business apparently on his own account, and, consequently, could sell and dispose of the goods as he pleased, but lie was also informed of the fraudulent intention of Selmes to cheat bis New York creditors, through the instrumentality of McFarlane. The instructions asked by Pomeroy ought never to have been given, the evidence being such as it is; on the contrary, the instructions asked by the interpleader were correctly given. But the plaintiff seemed to believe that the verdict was against evidence. The verdict ought to have been against Pomeroy, on the proof furnished by himself, and his adversary, who labored with more understanding, placed the matter in a very clear light against him by the evidence of Pine, who' declared that he had informed Pomeroy of the business arrangements of Selmes and McFarlane. This Court is little inclined to weigh the evidence in a cause, after it has been left to a jury, with correct instructions. But if the evidence in this ease, instead ofbeing very abundant in favor of the appellee, were even very strong against him, the plaintiff, has precluded this Court from giving him any relief. When the plaintiff seeks to reverse a judgment, because the verdict is found against the evidence, he ought to set out all the evidence given in the cause, and to state in his bill of exceptions that all the evidence given in the cause has been set out. It does not appear in this case, that the appellant did set out all the evidence; on the contrary, it appears that there was evidence which he did not state in the bill of exceptions, such as it is, filed at the term after the trial of the cause.

The judgment of the Court of Common Pleas must be affirmed.

Scott, J.

In my opinion, Selmes and Pomeroy should have been regarded as partners, and the question would have arisen as to the right of one partner to make an assignment. About this, no opinion is given. The bill of exceptions not having been filed until a subsequent term, without the consent of parties, the judgment must be affirmed.