Phillips & Co. v. Rule , 1907 Mo. App. LEXIS 250 ( 1907 )

BLAND, P. J.

(after stating the facts.) — 1. The interpleaders, at the close of all the evidence, moved the court for a peremptory instruction to the jury to find for them. Interpleaders contend that this instruction should have been granted. We think not. The circumstances of the transaction, we think, would warrant a jury to find the sale was not bona fide. The sale of a large stock of goods in bulk, by an insolvent, without invoice or appraisement and made in haste, is ’’certainly some evidence from which a jury might infer fraud.

2. The court gave all the instructions asked by interpleaders, but gave the following erroneous instructions for the attaching creditor, to-wit:

“1. The court instructs the jury, that although the bill of sale offered in evidence, was executed by W. P. Rule, to Keifer and Boltz and that they took possession under it, still if you believe from the greater weight of the evideuce the bill of sale was executed and the possession given by Rule for the purpose of hindering, delaying or defrauding any of the creditors of W. P. Rule in the collection of their debts, and that Keifer and Boltz, or either of them knew of such purpose of Rule, in making the bill of sale, and giving possession or had knowledge sufficient to put an ordinary prudent man on inquiry, and participated in such intent, in any manner, then such bill of sale and such taking possession are void, as to the attaching creditors of Rule, and it makes no difference as to what the consideration in the bill of sale was.

“2. The court instructs the jury that in order to 'determine whether Keifer and Boltz, the interpleaders, had knowledge of the intent of W. P. Rule to defraud, hinder or delay his creditors if such intention has been shown as to Rule, you may take into consideration the acts and conduct of Keifer and Boltz and Rule as well as all of the facts and circumstances surrounding the whole transaction between them in the matter of the sale and purchase of the store and the amount paid for the goods; and if the jury believe from the greater weight of the evidence that sufficient knowledge or information was obtained by Keifer and Boltz or either of them, to put a reasonably prudent man on inquiry, then the jury have a right to infer that Keifer and Boltz had knowledge of the fraudulent character of the transaction, if you further find that it was fraudulent.

“3. The court instructs the jury that if they believe from the greater weight of the evidence that the interpleaders, Keifer and Boltz purchased the stock of goods of W. P. Rule secretly, quickly and without fixing the amounts of the various kinds of goods and their value, then these are circumstances the jury may take into consideration in determining whether the said Keifer and Boltz participated in the fraudulent intent of the said W. P, Rule or had knowledge of such facts as would put a reasonable man upon inquiry, if you find that there was a fraud on the part of W. P. Rule as defined in these instructions.”

The error in these instructions consists in this: They told the jury if Rule, in making the sale, intended to hinder, delay or defraud his creditors, and the inter-pleaders had sufficient knowledge of Rule’s fraudulent intent, to put an ordinarily prudent person on inquiry, then the jury might infer they were participants with Rule in the fraud.

In Sammons v. O’Neill, 60 Mo. App. 1. c. 537, Judge Ellison said: “But this rule (in respect to laches) ■will not apply to the sale of personal property — it could not well apply without hampering the barter and sale of such property to an embarrassing extent. It is not usual for the purchaser to seek out the motive of the seller. A purchaser, though he is possessed of information which would put a prudent man on inquiry, can neglect to make the inquiry and yet be safe in his purchase. But the fact that he had such knowledge as would have excited the inquiry of a prudent man, may be considered by the jury, when they come to determine the question whether he did have actual knowledge of the fraud.” While knowledge of facts which would put a prudent person on inquiry, which if made would show a fraudulent intent, is not knowledge of such intent, it is, however, a circumstance to be considered by the jury as tending to show knowledge of such fraudulent intent. [Bank v. Tobacco Co., 155 Mo. 1. c. 608, 56 S. W. 283; Barrett v. Davis, 104 Mo. 549, 16 S. W. 377.] As said by Judge Macfaelane, in State ex rel. v. Purcell, 131 Mo. 1. c. 317, 33 S. W. 131; “While it may not be required of a purchaser of goods, in the usual course of business, to inquire into the motives of the seller, yet he c„annot be allowed to shut his eyes to facts and circumstances which indicate a fraudulent motive. He is bound to draw correct inferences from facts and circumstances of which he has knowledge, and which are consistent only with a fraudulent intent.” '

If Rule was guilty of fraud, the interpleaders are not affected by his fraud, unless they had knowledge of it; but such knowledge need not be shown by direct or positive evidence. It may be proven by the facts and circumstances leading up to and attending the sale. One of these circumstances may be knowledge of facts which would put a prudent person on inquiry, which if inter-pleaders had made would have shown Rule’s fraudulent intent; but the knowledge of such facts is not knowledge of Rule’s fraud, nor a fact from which knowledge can be inferred, as declared by plaintiff’s instruction.

For the error noted, the judgment is reversed and the cause remanded.

All concur.