66 Mo. App. 40 | Mo. Ct. App. | 1896
In 1892 the defendant Bailey commenced a retail grocery business in Old Orchard. The plaintiffs, who are wholesale grocery merchants, sold him goods on credit. On the second day of February, 1894, he owed them a balance, on account, of $1,700, for which he executed seventeen notes of $100 each, payable respectively in that many months. To secure these notes Bailey executed a
The circuit court on its own motion gave the following instruction, to wit: “The court further instructs you that the mortgage read in evidence by the plaintiffs, and executed by the defendant, ¥m. L. Bailey, is as to these plaintiffs and defendant ¥m, L. Bailey a good,
One of the objections urged to this instruction is that it assumes as a matter of law that the plaintiffs’ mortgage was fraudulent as to creditors and purchasers. My associates are of the opinion that the mortgage as written is prima facie valid, and hence the instruction was [erroneous. However, for reasons hereinafter stated, in which we all concur, the error was a harmless one. Speaking on this point for myself only, I think that the mortgage, by necessary implication, conferred on Bailey an unrestricted right of sale and substitution, which, under all of the authorities in this- state, rendered the mortgage invalid as to creditors and subsequent purchasers in good faith. It has been universally ruled by the appellate courts of this state that a mortgage of goods, which permits the mortgagor to continue the business in the usual course of trade, is a conveyance to' the use of the grantor, thus bringing the conveyance within the inhibition of the statute. There is a line of decisions, however, commencing with the case of Metzner v. Graham, 57 Mo. 404, which hold that a clause permitting the mortgagor to sell is valid, provided the proceeds of the sales are agreed to be paid in liquidation of the mortgage debt. And there are other decisions, notably
Another objection urged against the instruction is that it failed to submit the question of the good faith of Joy in making the purchase. We do not find in the record any substantial evidence of bad faith on the part of either Joy or Bailey in the transaction. The evidence is abundant and undisputed that Bailey owed Joy largely in excess of the value of the goods, and that the goods were taken at a fair valuation. The only matter which even suggests a fraudulent purchase is that Joy employed Bailey as a clerk in the establishment. This fact standing alone amounts to nothing. There was also some evidence that, about the time of the purchase of the goods, Bailey conveyed to Joy a lot in satisfaction of a mortgage debt which Joy held against the lot. In connection with that transaction
Other objections are made to the instructions. Some of those given for respondent are open to criticism, if not serious objection, but, however erroneous they may be, the judgment will have to be affirmed as being for the right party. The evidence leaves no doubt that the contest between the plaintiffs and Joy was over the after-acquired property only. The latter denied the taking of the other property, and there was no effort made to prove that he had it in his possession or that he had at any time claimed to own it. While it has been settled in this state that a mortgage of after-acquired property is good in equity as between the parties, and as to third persons acquiring the property with actual notice of the existence of the mortgage (Barton v. Stitlington, 128 Mo. 164; Keating v. Hannenkamp, 100 Mo. 161; France v. Thomas, 86 Mo. 80; Rutherford v. Stewart, 79 Mo. 216; Wright v. Bircher, 72 Mo. 179; Thompson v. Foerstel, 10 Mo. App. 290), yet until the mortgagee or trustee in such a mortgage takes possession, his right to the property can only be enforced in a court of equity. That was the ruling in France v. Thomas, supra, where it is held that a mortgagee who has never been in possession can not maintain replevin for after-acquired property. The decision
It follows that the judgment of the circuit court must be affirmed.