DocketNumber： No. 4254; No. 4255; No. 4256
Citation Numbers： 98 Mo. 297
Judges： Brace
Filed Date： 4/15/1889
Status： Precedential
Modified Date： 9/9/2022
— These three cases are submitted on one record.
At the April term, 1885, of the circuit court of St. Louis, and on the morning of the twentieth of said month, defendants, Ralph R. Foster and James R. Ryan, partners doing business under the firm name of R. R. Foster & Company, at St. Louis, confessed judgment in favor of their co-defendants, Henry C. Ward and Charles G. Foster, partners doing business under the firm name of Ward & Foster in New York, for the sum of $15,440.92 and in favor of the Bank of Commerce for the sum of five thousand dollars, and the said defendant, Ralph R. Foster, confessed judgment in favor of his said co-defendant, Charles G. Foster, for the sum of $5,882.41. Executions were immediately issued on these judgments and levied as follows : The one in favor of Ward & Foster, at 10:55, a.- m., on all the teas and cigars on the first floor, and all the cigars on the second iloor of 809 North Second street as the property of R. R. Foster & Company; the one in favor of the bank at 11:15, a. m., on all the teas on the second, third and fourth floors of number 311 North Second street as the property of the said R. R. Foster & Company ; and the one in favor of Charles G. Foster at 12:10, p. m., on a
At 10:30, a. m., a few minutes before these levies were made, a deed and mortgage were filed in the office of the recorder from Ralph R. Poster conveying his real estate to his brother, William M. Foster, and a mortgage on all his household property, the consideration in the deed being fifteen hundred, dollars, and the note in the mortgage being for the same amount. At 12:53, p. m., a few minutes after the last of the levies was made, there was filed in the office of the recorder a general deed of assignment from said R. R. Poster & Company, to R. D. Lancaster, of all their property, subject to-existing liens for the benefit of their creditors. At the time these judgments were confessed and levies and transfers made, Poster & Company and R. R. Poster were insolvent, and they covered the whole of their property.
On the twenty-third of April, 1885, plaintiffs Hard & Rand sued out a writ of attachment in an action against R. R. Poster & Company, in which judgment was afterwards rendered for $9,061.43 and, on the same day, caused the same to be levied upon the property held by the sheriff under the execution in favor of Ward & Poster against R. R. Poster & Company. On the same day, plaintiffs Chase & Weir sued out a writ of attachment in an action against R. R. Poster & Company in which judgment was afterwards rendered for $11,519.58, and, on the same day, caused the same to be levied upon the same property theretofore levied upon under the execution in favor of Ward & Foster and the-attachment in favor of Hard & Rand, and also upon the property theretofore levied upon under the execution in favor of the bank, and on the eleventh of May ensuing, upon all the property upon which the execution on the judgment of Charles Q-. Poster against R. R. Poster had been levied, as the individual property of said R. R. Poster.
On the twenty-fifth of July, the individual property of R. R. Foster, levied upon by virtue of the execution on judgment confessed in favor of Charles G. Foster, was sold by the sheriff for the net sum of $6,270.94 ; and on the twenty-seventh of July, the property of R. R. Foster & Company, levied upon by virtue of the execution on the judgment confessed in favor of Ward & Foster, was sold by the sheriff for the net sum of $21,664.19, and these amounts are in the hands of the sheriff awaiting'the decisions of these cases.
Revised Statutes, 1879, section 448, provides that: “Any attaching creditor may maintain an action for the purpose of setting aside any fraudulent conveyance, assignment, charge, lien or incumbrance upon any property attached in any action instituted by him.” The parties in these actions confine their attack to the two judgments confessed in favor of Ward & Foster, and Charles G. Foster. The property conveyed in the deed and mortgage was not attached by them, and the judgment confessed in favor of the Bank of Commerce and
A careful consideration of all the evidence in the case leads to the following conclusion of facts: That on the first of January, 1885, the concern of R. R. Poster & Company was insolvent, and that their condition was known to the members of the firm ; that while Ryan was nominally a member of the firm, he had no real interest in the concern and was in fact a mere employe, upon a salary,' of Poster, who owned the whole concern ; ■that about that time, they conceived and commenced carrying out a scheme to defraud their creditors by buying on credit large amounts of goods, and selling them for cash at reduced prices; that they worked the scheme assiduously, successfully and continuously from that time during the months of January, February and March and until about the eighth of April, when Poster mailed to his brother, the defendant Charles G-. Poster, a member of the firm of Ward & Poster, commission merchants in New York City, the following letter :
“St. Louis, April 8th, 1885.
“ Dear Charles : — Everything in the way of business seems to be going wrong, and as we have lots of big payments before long, I am afraid we won’t pull through. I expect most likely that we will make an assignment, but I want to secure you first, both what is due W. & P. and what is due you also. We have a note, $1,044.38 due the fourteenth inst., and then one the sixteenth for seven thousand dollars, which I shall have Pred renew and send the money to you to pay it, but don’t expect to go much longer than that. I shall secure him also. Wire me that you have received this and return papers. Don’t say anything to Henry or anybody else about this, except if you see Pred you can talk with him about it, as I shall advise him also.
“ (Signed ' Yours truly,
“Ralph.”
“ Office of Ward & Poster, 42 Pearl Street,
“ New York, April 10th, 1885.
“Messrs. B. B. Foster & Go. — Bear Sirs: In reference to what you say about your business troubles, I consent to your confessing judgment in my favor, for the amount due me, and wish you to have everything done for me that is necessary to secure' me in that or any other way. Yours truly,
“(Signed) Charles Gr. Foster.”
“ Office of Ward & Poster, 42 Pearl St.,
“New York, April 10, 1885.
‘‘Messrs. B. B. Foster & Go. — Bear Sirs: in reference to what you say about your business troubles, we consent to your confessing judgment in our favor for the amount due us, and wish you to have everything done for us that is necessary to secure us in that or any other way. Yours truly (signed), Ward & Poster.”
These letters, it appears from the evidence, were copies of memorandums sent in the letter from Ralph to Charles Gr. Poster, and by mistake the one signed Charles Gr. Poster was addressed to R. R. Poster & Company, instead of R. R. Poster, as it should have been, which led to the following telegrams :
“ New York, April 20, 1885.
“ Balph B. Foster : — I want you to have everything dope that you think is necessary for my protection. (Signed) Chas. Gr. Foster.”
“New York, April 20, 1885.
“ BalpTi B. Foster: — Have wired in my individual name. Is the dispatch right, and do you want anything in firm’s name ? (Signed) Chas. G. Poster.”
The amount for which the judgment was confessed by R. R. Poster & Company, in favor of Ward & Poster,
I. The trial court found that these were honest, Iona-fide debts, due from the judgment debtor to his said judgment creditors at the time the judgments were confessed; that Ward & Foster and Charles Gf. Foster consented to the confession of judgment in their favor without knowledge of, or participation in, the scheme of R. R. Foster & Company, to defraud their creditors, and for the purpose of securing their own debts and not for the purpose of hindering, delaying or defrauding other creditors of the said Foster or Foster & Company, and the evidence sustains this finding of the court, and leads us to the same conclusion, even if we were not in the habit of deferring somewhat to that reached by the chancellor, which, however, has been the invariable practice of this court. Broughton v. Brand, 94 Mo. 169 ; Snell v. Harrison, 83 Mo. 651; Ershine v. Loewenstein, 82 Mo. 301. And under the law of this state which permits a debtor to prefer one creditor to another, when such creditor is not guilty of a fraud in securing such preference, these judgments and the lien of the executions thereunder must stand, unless, as matter of law, the judgments in themselves are defective, of by reason of the attendant circumstances are fraudulent, or the levies have become*
II. As required by Revised Statutes, 1879, section 3697, the statements upon which the judgments were confessed, were in writing, signed by the defendant and verified by his affidavit, and in each stated the amount for which judgment might be rendered, and authorized the entry of judgment thereon, and that it was for money due, and stated in detail the facts out of which the indebtedness arose. But it is urged that the statement is in each case fatally defective, in that it does not show that the whole of the sum confessed for judgment is justly due, in this: That in the statement of Foster & Company’s indebtedness to Ward & Foster for judgment in their favor, in the schedule is included an item charged at $702.76, which, according to the evidence, ought to have been only $302.76, and five items of interest, amounting in the aggregate to $1152.88, which it fails to show were based upon any prior demand, or agreement to pay interest, and four items amounting in the aggregate to $7,184.33, between the twenty-second of February, 1883, and November 1, 1884, which it is charged was the individual indebtedness of R. R. Foster, on account of a cattle transaction.
(a) The discrepancy of four hundred dollars between the schedule charge and the evidence contained in one of the depositions, the trial judge was satisfied, was the result of a clerical error, either in the schedule or in the deposition, and was of the ojnnion, from other evidence in the case, that the error was in the deposition, and the evidence in regard thereto is insufficient to avoid the judgment.
(b) The charges for interest are annual charges, at the end of the respective years during the currency of the account, on the average balances due from the defendants to their correspondents, for moneys advanced beyond their remittances, as appears by the
(c) Judge Thayer, before whom these cases were tried, thus satisfactorily disposed of the third objection urged against this judgment: “There is no merit in the point that- the Ward & Foster confession is void because it includes an individual debt of R. R. Foster. In the first place, the evidence shows that Ward & Foster were ordered to pay for the cattle and to charge the amount to the account of R. R. Foster & Company, and that the charge was so made. The firm of R. R. Foster & Company appear to have treated this item as properly charged to their account, and no doubt exists in my mind that the last-named firm became bound to Ward & Foster for the full amount. In the second place, there is no evidence of the insolvency of R. R. Foster & Company at the date of the cattle transaction, and furthermore, the evidence shows that remittances were made" to Ward & Foster to cover that particular expedition.” This would seem to be a sufficient answer, leaving out of view the fact that R. R. Foster alone really constituted the firm of R. R. Foster & Company, and that his consent was Ryan’s consent. Sexton v. Anderson, supra, and authorities cited.
III. It is urged that the statement upon which judgment was confessed by R. R. Foster in favor of Charles Gf. Foster is insufficient m that it appears that, included in the amount confessed, is an amount for interest when none was due according to the statement, or if any was
(a) According to the statement, R. R. Foster, on the twenty-fourth day of June, 1878, borrowed of Charles Gr. Foster the sum of three thousand dollars, and on the first day of March, 1881, the further sum of two thousand dollars, which several sums, at the several dates aforesaid, the said R. R. Foster promised to pay to the said Charles Gk Foster with interest, on demand. The statement then goes on to give the purpose for which he borrowed the money. An express promise to pay interest is here alleged, but no rate having been agreed upon, the law fixes the rate at six per cent. R. S. 1879, sec. 2723. The plain import of the language is that he promised to pay the principal, with interest from the date of the loans on demand, and these principal sums bear interest from that date at the rate of six per cent. Pittman, Adm'r, v. Barrett, 34 Mo. 84; Green v. Kennedy, 6 Mo. App. 977.
(5) The substance of the statement in regard to the interest account on these loans, is that the defendant had paid all the accrued interest on these loans up to the first of November, 1881, except $297.88 according to an accounting had between him and the said Charles Gk Foster, on the eleventh of November, 1881 ; that upon the interest of these loans, accrued between the first of November, 1881, and the thirty-first day of December, 1884, he had paid all except $490.94, making the sum of $9,788.80 the amount of principal and interest found to be due the said Charles Gk Fost.er upon an accounting had with him at the last-mentioned date, and since that time, the further sum of $93.09 has accrued as interest on said loans, making the total sum for which he confesses judgment. It does not necessarily appear from the statement, that compound interest is charged in ascertaining the balance due, and in the absence of any proof it will not be presumed against the judgment that such was the fact. If any such interest is included, the
There are just three items of interest confessed in the judgment, one for $93.09 interest on the two loans from December 31,1884, to date of judgment, one for $490.94, unpaid interest on said loans from November 1, 1881, to December, 31, 1884; and one for $297.88, unpaid interest on said loans from date thereof to the first of November, 1881. The precise transaction oiit of which this indebtedness arose is pointed out so that the judgment creditors
IY. Prior to the twentieth of April, It. R. Foster had undoubtedly been engaged in a scheme to defraud his creditors. On that day he confessed judgments and made conveyance of every dollar’s worth of property, his scheme had left in sight for his creditors. In these conveyances he undertook to give a preference to some over other creditors. Thei'e is no evidence tending to show fraud upon the part of any of these creditors in accepting this preference. If Foster had any sinister purpose in making this preference, the evidence does not disclose it, but if he had, that purpose cannot be imputed to Ward & Foster or Charles Gf. Foster, because of their consent to his confessing judgment in their favor. Such consent does not create the relation of principal and agent but is a necessary condition of the bona-fide relation of plaintiff and defendant in the judgment, in which both are principals, and the guilty knowledge or purpose of the defendant cannot be imputed to the innocent plaintiff.
Y. As to the complaint in regard to excessive levy, and holding up .the execution, it is only necessary to say: The sales demonstrate that the levies were not unreasonably excessive under the circumstances and the delay in the sales was the result of the agreement of the
VI. On the oral argument of these cases, the appellants advanced the proposition “that the confession of judgment and assignment made by Ralph R. Poster & Company constituted together one transaction, viz., a voluntary assignment for the equal benefit of all creditors, and that the preference sought to be given by the confession of judgment must be held to be void) and the proceeds in the hands of the sheriff must go to all the creditors equally.” This presents an interesting and very important question, and one that has not yet been passed upon in this court, but one that is not embraced within the issues of the pleadings, not mooted in, or passed upon by, the trial court, and that plaintiffs are not in a position to urge, in these cases, and for the determination of which other parties are necessary and an entire change of front on the part of the plaintiffs. The position of the plaintiffs on the record here, is that of attaching creditors asking that the liens acquired under the confessed judgments be annulled for fraud, and the property subjected to their judgments in attachment to the extent of their whole claim. The position they assume in this last contention is necessarily that these judgments are not void for fraud but are valid parts of one transaction, which is a general assignment for the equal benefit of all the creditors in which they, as well as the defendant judgment creditors herein, would be included. When the assignee or they, as general creditors, come and ask that this property be administered under the general assignment law for the benefit of all creditors, they will have a standing in court that would authorize a decision of the question suggested, but for its complete determination, it is not seen how the judgments confessed in favor of Ward & Poster and Chas. Gr. Poster and the assignment to Lancaster can be considered as one transaction, without also including the deed and mortgage to William M.
As was said in- the case of Sexton v. Anderson, supra, in which a suggestion similar to the one made in the present case was made, “ on the case made the court committed no error,” and its judgment dismissing the plaintiffs’ bill in each of these cases is affirmed. All concur. '