Stevens Lumber Co. v. Kansas City Planing Mill Co.

Ellison, J. In considering this case, we may concede much of the contention upon which plaintiff seeks to sustain its judgment. The charge made here, when considered in connection with the evidence, is, that the defendant sold the lumber to the garnishee for the purpose and with the intent to cheat and defraud plaintiff, and that the garnishee participated in such purpose and intent. We shall address ourselves to the question whether the garnishee participated in the fraud. If there is a failure of proof in this respect, the case against the garnishee must fail, since whatever fraud upon plaintiff may have been intended, and actually practiced by the defendant in making the sale of the lumber to the garnishee, if the latter had no part in it, its purchase must be upheld. Alberger v. White, 117 Mo. 347. The case shows, indeed it is not disputed, that the garnishee was a bona fide creditor of the defendant. As such, it was its right and privilege to seek the payment of its claim as best it could, and so long as its sole object was to secure payment of the claim it is of no consequence that it may have had knowledge that it would thereby deprive other creditors of the means of securing theirs. And the known insolvency of defendant, so strongly insisted upon by plaintiff, while not inappropriate, as a circumstance, when properly connected with other matters of" substance, in making out a charge of fraud under certain connecting facts, in this case may be called to the aid of the garnishee. The fact that the garnishee knew or feared defendant’s insol [384] vency is certainly among the very best of reasons for-wanting, to a degreei of anxiety, to secure the claim. These two things, tíren, appear prominently in the case, viz.: The fact that the garnishee had a bona fid& claim, and the legal right to secure it. We must look, then, for evidence which shows fraud on the part of the garnishee, or a participation in the fraudulent purpose of the defendant. We find none, and are, therefore, of the opinion that the demurrer to plaintiff’s evidence should have been sustained. There is a greal deal of' matter put before us to establish fraud on the part of' the garnishee, but when the suspicions, which may be implied from the questions asked by counsel, are subtracted there remains nothing of substance. There is scarcely a pretense of fraud being directly shown, and circumstances are claimed to establish it. We have-not been able to discover a single fraudulent circumstance in the- evidence, when separated from the coloring which it receives from counsel. The insolvency of defendant stands as much for the garnishee as. for the plaintiff. The fact that defendant’s general manager and the garnishee’s president were acquaintances of several years’ standing, and that their places, of business were four hundred feet apart, are too trivial for serious consideration. We freely concede that, when it is shown, as was done in this case, that the lumber which plaintiffs sold these defendants was material gotten out by plaintiff on the order of defendant-according to certain specifications, andwasto be used in the construction of a building in Kansas City, and that some days after it had arrived in the city, while yet in the cars, it was sold and delivered by defendant to the garnishee, who, in a few days thereafter, sold it at an advance -of $300 over what it paid defendant, to the owner of the building in which it was originally designed to go by defendant, the owner putting it in the [385] building under the specifications which were given in the first instance, and that, by this means, defendant being insolvent, plaintiff has lost the price it was to receive, a case is made sufficient to put a just man in a mood of inquiry. But when it appears, as a result of that inquiry, that plaintiff sold the lumber on the credit of defendant without knowing what building it was designed for (whether this avoided their mechanics’ lien, as contended by the garnishee, need not be considered now), that the garnishee had a valid claim, which it was anxious to secure, and that it did not know that the lumber was not paid for; that it did not know, at the time of purchasing from defendant, that the lumber was designed for the Thorne building, and when it is considered that upon learning the lumber was designed for the Thorne building, being cut according to specifications for that building, the most natural thing for the garnishee to do would be to try to utilize such lumber at the place it was found to be designed for. When this information is gained, there is nothing in the case of an illegal or even an immoral color. But it appears that the garnishee got from Thorne, as before stated, a profit of some $300. That is shown to have resulted in this way: When the garnishee demanded payment from the defendant of its claim, the defendant had no money, but offered garnishee a choice of enough of the lumber yet unincumbered at cost price to cover a large portion of the garnishee’s claim. That this was .a fair price %vas conceded ly plaintiff, since the testimony showed that plaintiff would have duplicated the bill for the same money to the garnishee. But when the garnishee went to sell to Thorne it sold at the price which defendant had bargained; that is to say, Thorne paid this garnishee the same price defendant was to have been [386] paid. If defendant had carried out its contract, and delivered to the Thorne building, it would have made a profit of $300 on the lumber which plaintiff sold them; as it was, the garnishee made this profit. We fail to see how this can taint the garnishee’s action as fraudulent. Keeping in mind that the garnishee had a bona fide debt, that it paid full value for the lumber—paid the very price plaintiff was to get—we are of the opinion that the profit realized by the sale to Thorne was legitimate. The profit on the deal with Thorne might have been great or small—depending on the bargain—but the fact that it was a profit, or that it was the same which defendant was to realize, is of no consequence. Before all the lumber was delivered to the garnishee, defendant gave it an order for $1,000, which was owing to defendant by the contractor for the Thorne building, this order was accepted by the garnishee as collateral on the entire debt, which was more than the amount here involved. The testimony was, that the garnishee did not place any value on this order, since Jones was insolvent, and that it was cancelled about the time of the sale. We can not see where any reasonable inference against the garnishee can be drawn from this. Nor is there anything of substance to be drawn from the conduct of the garnishee in concluding to take the cars of lumber on the track instead of that in the yard. If the garnishee had chosen the reverse and taken that in the yard instead of that in the car, we can well see where and how a case could be urged against it by some creditor interested in the former of quite as much substance as the one here made. We have not found in the record a single motive to actuate this garnishee in assisting the defendant to defraud the plaintiff. It had an honest claim of its own. It suddenly discovered that defendant had placed an incumbrance upon its (defendant’s) property, and [387] it immediately began to look out for itself, as it legitimately might do, even though it knew the consequence of securing the claim would operate to defraud others. “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 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.” Covanhovan v. Hart, 21 Pa. St. 495; Mayburg v. Jacobs, 40 Mo. App. 128. There were some other matters dwelt upon by plaintiff which we have considered, but which are of too tedious a nature to examine or discuss in an opinion. There has been gotten together by the combined effort of counsel for each party a mass of matter occupying, as mere statement, more than thirty-two printed pages. An exceedingly lengthy case has been made out of little material. Twenty-nine instructions were asked by the garnishee; nine were given and twenty were properly refused. To maintain this judgement, we would have to make a rule far too circumscribed for the natural, as well as business, course of an honest creditor struggling to make himself whole out of the assets of his failing debtor. The result is, we must reverse the judgment. Smith, P. J., assents; Gill, J., dissents.