Simmons Hardware Co. v. Fighting Flames Co.

135 Mo. App. 266 | Mo. Ct. App. | 1909

GOODE, J.

(after stating the facts.) — The defendant is a corporation which was organized January 8, 1906, with a capital stock of $36,000, to travel over the country and exhibit a spectacle depicting the fighting of a conflagration. It provided itself with the usual apparatus for extinguishing fires in cities, such as steam fire engines, hose reels, hook and ladder trucks, besides horses and cars to move the properties of the show, and tents, camping outfits, and cooking utensils designed for the use of the performers, of whom there would be .two or three hundred. An office Avas kept in St. Louis during the .promotion and organization of the company and thereafter, its mail address was the Columbia Theatre in said city, but it appears to have kept no business office there Avith an agent in charge on Avhom process could be served. The exhibition was projected on such a scale that tAventy or more freight cars and several passenger and sleeping cars Avere required to move the property and employees. The first intention Avas to start on a route about May 1, 1906, but because the scenery Avas damaged to the amount of several thousand dollars and several employees injured by a storm, the date of leaving St. Louis was postponed. The route contemplated included forty-odd points, beginning Avith Joplin, Missouri, and taking in cities in Kansas, Nebraska, IOAva, Illinois, Wisconsin, Minnesota, Indiana, Michigan and Ohio. St. Louis Avas to be revisited about the middle of June and the engagement there was to continue a Aveek. On May 3d plaintiff caused an attachment to be levied on a portion of defendant’s property, to-wit, two Pullman cars, just as the company was about to start on' its tour. Several grounds of attachment were laid in the affidavit, but the only one submitted to the jury or that we are concerned with on the appeal, is that defendant was about to remove its property and effects-out of the State with the intent to defraud, hinder and delay its creditors. The two sleeping cars were released from the attachment by defendant executing a forthcoming bond, and the company then proceeded on its tour; but it fell into financial embarrassment and, after exhibiting for eight days on the return to St. Louis, it executed on June 9, 1908, a general assignment for the benefit of its creditors. Plaintiff gave evidence which tended to prove the company was heavily in debt and, indeed, insolvent, before it left Missouri. Plaintiff’s account was presented for payment on May 1st, before the tour began, and some negotiations ensued looking to a compromise; but as the parties did not agree, the attachment was levied while the property was in process of loading on the cars for movement. The attorney who presented plaintiff’s account, testified the president of the company told him its indebtedness was about $40,000; that the proposed route covered twenty-three weeks and the company intended to winter somewhere in the south. This testimony was denied by the president. The■ attachment action was instituted to recover for merchandise sold and delivered, amounting to some nineteen hundred dollars. The trial of the plea in abatement resulted in a verdict for plaintiff sustaining the attachment on the ground we have recited, and after judgment had been given for plaintiff on the merits, this appeal was taken, in which the controversy is over the rulings on the requests for instructions at the trial of the plea in abatement.

In our opinion the instructions granted for plaintiff are irreconcilable 'with the one given for defendant. The only theory on which it is sought to reconcile them, is by raising a- constructive intention on the part of defendant to hinder or delay its creditors, because the removal of its property out of the State would have that effect if the corporation was insolvent. This is the argument put forward by respondent’s counsel. Inr solvency cuts no important figure in the matter; for whether insolvent or not, the removal of all its property from the State would hinder and delay appellant’s creditors in a certain sense; that is to say, put the property out of the reach of the ordinary processes of our courts. The fifth ground of attachment afforded by section 366 of the Statutes (R. S. 1899) allows the remedy only Avhen the removal of property and effects out of this State is made with the intent to defraud, hinder or delay creditors. We have no doubt the word “intent” is used in the sense of “purpose,” and that the clause requires such a purpose or intent to be found as the condition on which a seizure will be upheld. There have been rulings rendered on the seventh, eighth and ninth clause of the section upholding attachments based on one or more of those statutory grounds, when a debtor had conveyed, assigned or disposed of his property or effects by some arrangement, usually an instrument in writing, the natural result of which was to defraud, hinder or delay creditors. Those decisions were put on a presumption that the debtor intended to defraud, hinder or delay his creditors, inasmuch as one or the other of those effects was the inevitable consequence of what he did. It will be observed said clauses do not use the words “with the intent to defraud, .hinder or delay creditors;” but instead the words “so as to hinder or delay his creditors;” and it is easier to interpret the latter words to refer to the consequence, rather than the purpose, with which the debtor disposes of his property, than it is to so hold in respect of the former words. However, the seventh, eighth and ninth grounds require a fraudulent disposition of property by a debtor in order to give canse for an attachment; but a disposition which inures to the benefit of the grantor in contravention of the statutes against fraudulent conveyances, is treated as cause for attachment; that is to say, fraud in law, so-called, as well as fraud in fact, will suffice when the attachment is sued out on those grounds. [Reed v. Pelletier, 28 Mo. 173.] But when the action is founded on the fifth clause of the section, to-wit, that a defendant is about to remove his property and effects out of the State with intent to defraud, hinder and delay his creditors, an actual purpose to defraud, hinder or delay must appear. [Reed v. Pelletier, supra; Douglas v. Cissna, 17 Mo. App. 4; Steele v. Dodd, 14 Neb. 496; Hunter v. Seward, 15 Neb. 215; Warder v. Thrilkeld, 62 Ia. 134; Mott v. Lawrence, 17 How. Pr. 554; Bernard v. Cohen, 56 N. Y. Supp. 271; Dunn v. Claunch, 13 Okla. 577.] It is true, as respondent contends, that in most of the cases just cited from outside jurisdictions wherein it was held the intent must be proved, and would not be legally presumed from the bare fact that the removal would prejudice creditors, the statute involved prescribed fraud as the ground of attachment. But if an attachment is allowed for doing an act with intent to hinder or delay creditors, as well as for doing one with intent to defraud, and the statute says the intention to do one or the other must exist, it then becomes essential for the triers of the facts to find the debtors had done the act (in this ease, moved out of the State) with intent either to defraud, hinder or delay. Respondent invokes the following cases in, support of the proposition that if appellant’s removal of its property from this State wrould necessarily operate to hinder or delay its creditors, an attachment would lie. [Montgomery v. Tilley & Sanders, 1 B. Mon. (Ky.) 155; Mingns v. McLeod, 25 la. 452; Lyons v. Mason, 4 Cold. (Term.) 525; Mack v. McDaniel, 4 Fed. 294.] Not one of those cases is in point because of the differences between the statutes involved in them and our attachment statutes. In the Tennessee case (Lyons v. Mason) the statute allowed an attachment if the debtor was about to remove himself and property out of the State, regardless of the intention with which he moved. In the Kentucky case (Montgomery v. Tilley) the statute on which the attachment was based was in one clause the same as the Tennessee case; while the other clause provided for a seizure if the debtor was attempting to sell, convey or otherwise dispose of his property with the intention of defrauding, hindering or delaying his creditors; that is to say, a ground like the seventh, eighth and ninth ground of our statute. The Towa case and the one passed on bv the Federal court in an Arkansas transaction, involved statutes allowing an attachment if a debtor was about to remove or had removed property out of the State without leaving enough property therein to satisfy the claims of his creditors. Two other decisions from Arkansas on the same statute are cited, and also two decisions from Mississippi. [Durr v. Hervey, 44 Ark, 301; Simon v. Assn., 54 Ark. 58; Myers v. Farrell, 47 Miss. 281; Crow v. Lemon, 69 Miss. 799.] The case in the 47th Mississippi discussed matters not relevant to the question before us; whereas the one in the 69th Mississippi was an attachment based on a statute granting said process when a debtor had removed or was about to remove his property out of the State; nothing being prescribed about the intention of the removal. Certain Missouri decisions are likewise cited as in favor of respondent’s position, but they all deal with other grounds of attachment than the one on which' respondent succeeded. [Potter v. McDowell, 31 Mo. 62; Crow v. Beardsley, 68 Mo. 435; Segers & Sons v. Thomas Bros., 107 Mo. 635; Hall v. Goodnight, 138 Mo. 566; State to use v. O’Neil, 151 Mo. 67.] The appellant corporation was organized for the express purpose of going out of the State with its property, and if not insolvent from the first, likely it would have been reduced to insolvency by preventing it from moving; for thereby the sole object of its existence would have been frustrated. We do not think, even if it was insolvent, a legal presumption would arise that its purpose in taking its paraphernalia out of the State was to hinder or delay creditors; for, perchance, if business wTas good, it might make money wherewith to meet its obligations and emerge from a condition of insolvency; and it might have had such a result in mind. Though the theory on which the instructions are defended is that appellant was insolvent, only the first instructions granted for respondent required the jury to find it was. Hence on respondent’s own theory the case was submitted on erroneous charges. The instructions granted for appellant stated the law of the case. -

It is insisted the second of the instructions requested by appellant and refused, should have been given, but we think it was properly refused, for this reason; it was in the nature of a running comment on certain facts.

The judgment is reversed and the cause remanded.

Nortoni, J., concurs; Reynolds, J., not sitting.