Donk Bros. Coal & Coke Co v. Stevens

— Plaintiffs sued defendants by attachment before a justice of the peace in the city of St. Louis. An attachment writ was issued and several horses, wagons and other personal property was seized as the property of Erank E. and Charles A. Stevens. Eor this property John J. Stevens interpleaded. Erom a judgment of the justice an appeal was taken to the circuit court, where on a trial de novo interpleader recovered a judgment, from which plaintiffs duly appealed.

Erank and Charles Stevens were coal dealers, became indebted to the plaintiffs and to others, and were being pressed for money, they also owed the interpleader, who was their father, $700 for borrowed money. On May 8, 1896, they executed to the inter-pleader their note for $700 and to secure the note gave him a chattel mortgage on all the property attached. This mortgage was recorded on May 11, the day the attachment suit was begun.

*42„ , *41It seems that at the time the mortgage was given, that it was agreed between the parties that the mortgage should be withheld from record, unless, to use the language of one of the witnesses, the plaintiffs in this case should undertake to “squeeze” Erank and Charles Stevens. An arrangement of this kind between the mortgagor and mortgagee, the mortgagor retaining possession of the property, would give the mortgagor the indicia of ownership of the property and suppositious credit, and would be fraudulent as to future creditors and as to those who might give credit upon faith that the mortgagor was the owner of mortgaged property. Bump on Fraudulent' Conveyances [4 Ed.], sec. 52; Bank v. Doran, 109 Mo. 40. The plaintiffs are not creditors o f Frank and Charles Stevens under such circumstances; their account accrued prior *42to the execution of the mortgage, and the mortgage was recorded on the very day the attachment writ was sued out, May 11, only three days after its execution. The interpleader was not bound to have his mortgage recorded; the risk he took by agreeing to withhold it from record, and by so withholding it, was not that existing creditors might be defrauded thereby, but that future credit might be given on the supposition that defendants were the owners of the property and that it was unencumbered. The defendants had a lawful right to prefer the debt due their father and to secure it by the mortgage. Shelly v. Boothe, 73 Mo. 77; Alberger v. White, 117 Mo. 347. So far. as the evidence discloses this was done in good faith and to secure a Iona fide debt. The effort to organize the business of Frank and Charles Stevens into a business corporation was not consummated, nor was the agree- . ment of interpleader to accept shares in the corporation, when organized, in payment of his debt of $700 ever effectuated.

The corporation scheme was probably blocked by the attachment. At any rate it proved abortive and cuts no figure in this case. Discovering no reversible error in the trial, we affirm the judgment.