Meyberg v. Jacobs

Ellison, J. A trial in the circuit court resulted against the interpleader and she brings the case here for review. Jacobs was engaged in the mercantile business and had become insolvent. He owed a number of wholesale merchants for goods purchased of them. He also owed Mrs. Goldman, the interpleader, a sum amounting to $1,429.61. In order to collect her debt she purchased of Jacobs his entire stock, inventoried at $2,319.25, cost price, for $1,723.48,. turning in, in .payment, her debt of $1,429.61 and paying him in cash $293.87. The plaintiff Meyberg brought suit by attachment against Jacobs and attached the goods which had [134] been transferred to interpleader. She filed her inter-plea, claiming the goods as her property. Plaintiff’s answer to the interplea admitted the sale and transfer, but charged that it was in fraud of creditors. I: At the opening of the trial, before the testimony began, “the court, upon inquiry of parties, ruled that the burden of proof, under the pleadings, was upon interpleader to show, prima facie, the ownership of the goods attached.” As the sale and transfer of the possession of the goods to the interpleader, was admitted by plaintiff’s answer to the interplea, thus admitting interpleader to have been in possession claiming ownership, it may be conceded that the court’s ruling was erroneous, as under such state of the case interpleader was prima facie the owner, and her title could only be overthrown by proof of fraud; such proof to-be made by the party making the charge. But, notwithstanding this, did the ruling stated work any harm to interpleader. The cause-was tried with the aid of a jury and no instruction was given them asserting the proposition stated in the ruling. The evidence was submitted to them without guide as to the burden of proof, and they passed upon it without prejudice in that regard. Interpleader might, if she had so desired, or thought the jury needed instruction on that point, have asked a suitable instruction. This was not done, and we are not able to discover what harm could result from a mere direction given to the attorneys at the beginning of the trial. No evidence offered by interpleader was excluded; it does not appear which party opened and closed the case to the jury, and the action of the court was practically only directing the order of testimony, a matter largely in its discretion. II. The question put to interpleader’s husband, a witness in the cause, and who transacted .all the business, as to what he told Mr. Walker about this not [135] being the first sale he had had attacked as a “humbug sale,” was eminently proper, especially on cross-examination. Exception was taken to the action of the court in admitting a number of judgments of other creditors of Jacobs. The evidence was properly admitted, as it was an aid to plaintiff’s case to show there were creditors; and the judgments, while not binding upon those who are strangers to them, yet are proper evidence to establish the existence of debts owing by the parties against whom they are rendered. The point made that these judgments in favor of third parties should not have been entered until after the interplea in this cause was tried is nob tenable. If the point was good under any circumstances. (which we do not concede) it would not have availed interpleader in this cause, the object of the testimony being to show the indebtedness of Jacobs. We think it was competent to show, under the circumstances surrounding this case, as it has been developed by the testimony, that a portion of the goods transferred to interpleader by Jacobs were the goods sold to him by the creditors in the attachment suits. It was a circumstance properly admissible as tending to show fraud on the part of Jacobs. And notwithstanding that fraud alone, on the part of Jacobs, would not defeat interpleader’s title; yet such fraud on his part is a part of the case to establish, and, if shown to have been participated in by the interpleader, completes the case. The evidence was admissible, therefore, as tending to show the design of Jacobs, even though, standing alone, it did not connect interpleader. Desberger v. Harrington, 28 Mo. App. 632; Singer v. Goldenberg, 17 Mo. App. 549; Holmes v. Braidwood, 82 Mo. 610. It is next objected that the plaintiff’s answer to the interplea fails to allege any indebtedness to plaintiff. This was rendered unnecessary by the allegations of the interplea admitting plaintiff was a creditor. [136] III. The matter, then, resolves itself to this, which in reality is the principal question: Does the case connect interpleader with the fraud ? Without going into other circumstances shown in the cause, it is enough to justify the verdict against interpleader, to consider one phase of the case. The goods purchased by interpleader amounted, after the discount allowed, to $293.87 more than her debt, and this sum she paid in cash, knowing, as testified by her husband and agent, that her vendor “ was going down hill,” and that he was indebted to others and was unable to pay. We deem this evidence alone sufficient to uphold the verdict of the jury. The rights and privileges of a creditor of an insolvent debtor are pointedly stated in the following extract from an opinion of Judge Black in Covanhovan v. Hart, 21 Pa. St. 495: “One creditor of a failing debtor is not bound to take care of another. It cannot be said that one is defrauded by the payment of another. In such cases if the assets are not large enough to pay all, somebody must suffer. It is a race in which it is impossible for everyone to be the foremost. He who has the advantage, whether he gets it by the preference of the debtor or by his own superior vigilance, or by both causes combined, is entitled to what he wins, provided he takes no more than his honest due. To pay a creditor his just debt in law, at a fair valuation, is no more a fraud upon other creditors than to pay him in bank notes or silver dollars. Neither is it any worse or more fraudulent for a creditor to secure himself by taking a conveyance, than it would be to enter up judgment. He gets no greater advantage by the former means than by the latter. The notion of the defendants in error seems to be that the creditor of an insolvent, man cannot avoid the imputation of fraud in any way except by cheating himself.” While a creditor may thus lawfully seek and obtain a preference from his insolvent debtor over his fellow [137] creditors, lie must quit at that. Notwithstanding his debt may be tona fide, yet if he do more than obtain his debt and thereby put it in the power of his debtor to hinder, delay or defraud the other creditors and does it for such purpose, the act in going beyond what he legitimately might do will taint and vitiate the whole transaction. Oppenheimer v. Halff & Bro., 68 Tex. 409; Levy v. Williams, 79 Ala. 171; Leinkauff v. Frankle, 80 Ala. 136; Owens v. Hobbie, 82 Ala. 466; Mc Veigh v. Baxter, 82 Mo. 518. We think the judgment should be affirmed, and it is so ordered.