Lowrance ex rel. Allen v. Barker

ELLISON, J. Relator claimed to own. a stock of merchandise under the term§ of either a mortgage or a bill of sale or both, it being a matter of dispute whether the claim was one or the other. The mortgage and the bill of sale were executed by Mrs. Kate Hopkins to relator who was a former owner of the goods. Defendant is a constable and as such he levied several writs of attachment on the goods as the property of Mrs Hopkins who was a debtor of the attachment plaintiffs. He after-wards sold the goods and thereupon this relator, Mrs. Allen, brought this action on his bond and prevailed in the circuit court. It appears that relator owned the goods and sold them to Mrs. Hopkins, getting a cash payment of $50, and taking from her a chattel mortgage on the stock to secure notes for the balance of the purchase money. This mortgage was not recorded until the day of the levy of the attachment, a period of ten or eleven months. Mrs. Hopkins was in possession of the store selling the goods and purchasing others, the attachment plaintiffs having sold to her without knowledge of such mortgage and in the belief that her stock was not incumbered. It was shown that the goods would not have been sold to her on credit if it had been known there was a mortgage. Relator’s husband, who transacted her business, was Mrs. Hopkins’ brother and he testified as follows: “Q. "Well, did anybody say anything about recording the mortgage at the time ? A. No, sir; I run it of my own accord. “Q. You just held it upon your own accord? A. Yes, sir. “Q. And out of regard for your sister? A. Yes, sir. “Q. Just out of regard for her and you didn’t want to injure her credit by putting it of record ? A. I don’t think her credit was injured. “Q. But you withheld it from the record in order that her credit would not be injured ? A. No, sir, I did not. [129] “Q. It was from regard for her; you wanted the business to be a success ? “Plaintiff’s counsel objected. “The Court: I think the witness has answered that.” We ha.ve no doubt that the mortgage was fraudulent and void as to these creditors. Relator’s conduct in withholding the mortgage from record estops her from setting it up against them. We so decided in two cases where the reasons and authorities on the question may be found. Williams v. Kirk, 68 Mo. App. 457; Dry Goods Co. v. Brown, 73 Mo. App. 245. In addition to the authorities there cited, see Cutler v. Steele, 85 Mich. 627; Standard Paper Co. v. Guenther, 67 Wis. 101. But is is claimed that relator’s title is good against the attaching creditors under the bill of sale which Mrs. Hopkins-executed to her the morning of the day the attachments were levied. An examination of the record satisfies us that this claim has no real support. It appears that it was taken on the day the attachments were levied and about two hours after the mortgage was recorded and that afterwards, on the same day, before the levy of the attachments, she took possession of the store by locking the doors. It is apparent from the record that there was no abandonment of the fraudulent mortgage. It was, as stated, recorded that morning and relator’s husband testified that he all the time claimed under the mortgage arid that he then (at time of trial) claimed under the mortgage. Moreover, the original petition in the cause makes no pretense of a claim under the bill of sale; on the other hand, it affirmatively alleges the claim of right and title Under the mortgage and claims a right of action by reason of the mortgage. The amended petition simply claims title without alleging by what means. So conceding (merely as a concession for present purposes) that, this ease is one where repentance for the fraudulent mortgage would have been allowed at the time the bill of sale was [130] executed, thereby coming within the terms of Peters Shoe Co. v. Arnold (decided at this term), yet there was no repentance here, since there was no abandonment of the fraudulent transaction or claim. The claim in the original petition, persisted in by testimony at the trial, discloses a holding on to the fraudulent1 transaction and is wholly inconsistent with the theory of repentance of the fraud. There dhould be an abandonment of the fraud and a sole claim under a bona fide transaction in cases where such change is permissible. Peters Shoe Co. v. Arnold, supra, Wait on Fraud. Conv., sec. 357. From the foregoing it is clear that defendant’s demurrer to the evidence should have been sustained and the judgment will be reversed. All concur.