Parker v. Roberts
| Decision Date | 19 June 1893 |
| Citation | 22 S.W. 914,116 Mo. 657 |
| Parties | Parker, Appellant v. Roberts, et al |
| Court | Missouri Supreme Court |
Appeal from Buchanan Circuit Court. -- Hon. Henry M. Ramey, Judge.
Affirmed.
Reed James & Randolph for appellant.
(1) The personal judgment against Abbott rendered by the Harrison circuit court in Kentucky, 1875, was not barred when sued upon, May, 1888, in the Buchanan circuit court, Revised Statutes, Missouri, 1889, sec. 6796. (2) The plaintiff's judgment May 19, 1889, was a valid judgment of a court of general jurisdiction, and cannot be assailed collaterally. (3) Abbott being insolvent and having no property available on execution, plaintiff, a judgment creditor, is allowed to bring his bill to remove incumbrances without execution and return, nulla bona; there being no adequate remedy at law. Merry v. Freemon, 44 Mo. 521; Turner v Adams, 46 Mo. 99; Humphreys v. Milling Co., 98 Mo. 548. (4) The mortgage executed for the purpose of hindering and delaying plaintiff in the collection of his claim, was fraudulent and void. (5) The mortgage executed for the benefit of the mortgagor's family and for the purpose of "hindering and delaying the mortgagor's creditors, is void as to such creditors, although it secures a valid debt, and was made with the purpose, in part, of securing such debt in good faith." Manufacturing Co v. Steele, 36 Mo.App. 496; Nasse v. Algermissen, 25 Mo.App. 186.
Rush & Rush for respondents.
(1) The mortgage was given to secure a bona fide indebtedness from Abbott to Roberts upon a settlement of their partnership. If Abbott was over-reached in his settlement of the partnership, it would be a matter of which Abbott or his representative could complain, but Abbott's creditors cannot bring suit to have the settlement set aside. Colbern v. Robinson, 80 Mo. 541; Bump on Fraudulent Conveyance [2 Ed.], pages 17 and 18; Eaton v. Perry, 29 Mo. 96 loc cit. 97, 98. (2) There must be an actual intent upon the part of the insolvent and that intent must be joined in by the defendant to cheat and defraud creditors, before conveyance will be set aside the instance of creditors. Colbern v. Robinson, supra, pages 546 and 547. (3) Abbott being a party to the chattel mortgage, his testimony, in order to be made the basis of a decree, should be consistent, clear and convincing. Colbern v. Robinson, supra, page 546. (4) If the actual value of the property was less than the amount due upon the note at the time of the private sale by Roberts, it is immaterial that Roberts was in fact the purchaser if he took it in satisfaction of the debt. 3 American and English Encyclopedia of Law, page 206, section 19, and cases cited in note.
-- This is a suit in equity to set aside, for alleged fraud, a certain chattel mortgage, executed September 27, 1887, upon a lot of horses and wagons, made by one W. W. Abbott, deceased, to defendant Roberts, to secure a note for $ 6,887.73. Defendant Driver is the administrator of the said Abbott. The suit is prosecuted by the plaintiff, who obtained a judgment in the circuit court of Buchanan county against Abbott on the nineteenth day of May, 1888, for the sum of $ 3,400. The judgment was obtained upon the transcript of a judgment of a court of record in the state of Kentucky, rendered in the year 1875 in favor of one B. F. Pullen, and assigned to plaintiff.
Plaintiff charged that the judgment was unpaid and since its rendition the said Abbott nor his estate had any property out of which the same could be collected by process of law; that all the property Abbott had was included in said mortgage to defendant Roberts; that at the date of the mortgage defendant Roberts, well knowing of the existence of said judgment, fraudulently conspired with said Abbott to cheat and defraud plaintiff and to hinder, delay and prevent him from collecting the same, made said chattel mortgage purporting to secure a note of $ 6,887.73, which was wholly fictitious. He charged further that on the date of the mortgage said Abbott was suffering from cancer, and, while under the influence of opiates, and wholly incapable of transacting business, and not knowing what he was doing, the said defendant Roberts fraudulently induced him to execute the mortgage, with the fraudulent intent of defeating, hindering and delaying plaintiff in the collection of said debt; that after the said Abbott recovered from the influence of said opiates, with the fraudulent intent to hinder, delay and defraud, he ratified and affirmed his act in executing said mortgage and then conspired with said Roberts to carry out such fraudulent intents; that the property mortgaged was reasonably worth $ 18,000; that the mortgage was duly recorded the day after its execution; and that Roberts took possession of said property which he still retains; that after the date of said mortgage the said Roberts as mortgagee made a pretended sale of the property under the powers therein contained and fraudulently purchased it himself. The prayer was to set aside the mortgage and pretended sale and to require Roberts to account for said property and its increase and proceeds.
The following facts were undisputed. Abbott was a dealer in blooded horses in Kentucky and later moved to Missouri, dying in St. Joseph, January 8, 1889. When in Kentucky judgments were rendered against him. One in favor of Pullen, upon which plaintiff obtained his judgment as charged in the petition. Another was in favor of a man named Emerson. Prior to January 1, 1887, Abbott and Roberts had dealings by which the former was indebted to the latter in the sum of $ 2,630. On that day they entered into a partnership for the purpose of raising and dealing in fast horses, Abbott putting in his horse stock at an agreed valuation of $ 12,000, Roberts putting in a stock farm. Abbott becoming unable to attend to the business, the partnership was dissolved in September, 1887, when a settlement was made by which Abbott took back the horses, etc., and gave Roberts a note and mortgage on the property for $ 6,887.73, the amount they agreed was due him. This is the note and mortgage which plaintiff seeks to set aside. The mortgage authorized a private sale of the property by the mortgagee. Afterwards Abbott gave Roberts written authority to sell the property at private sale, which he did, making sales to persons from whom he previously agreed to take it himself at the agreed prices; this he did. Part of the property he had sold and part he still retained.
The evidence tended to prove that the real value of the mortgaged property did not exceed the debt secured. Under the sale made, the proceeds were insufficient to pay the amount due on the note. After hearing the evidence the court found for defendant and dismissed the petition, and plaintiff appealed.
I. Much of the evidence offered by plaintiff, particularly that of Abbott himself, was in support of the theory that in the settlement of the partnership affairs, Abbott was suffering physically from disease, was under the influence of morphine, and in consequence was mentally incapable of transacting the business in hand, and was by reason of these disabilities overreached and defrauded by Roberts.
While we do not think the weight of the evidence bears out this theory, we are satisfied that the court altogether disregarded this evidence so far as it tended to prove a fraud perpetrated upon Abbott by Roberts in obtaining the note and mortgage, and the question is one of law whether creditors can take advantage of such fraud. It is very evident that the statute against fraudulent conveyances is directed against the acts of the grantor done with the intent to hinder, delay or defraud creditors, and not to the acts of the grantee in fraudulently inducing the grantor to make the conveyance.
In Eaton's Adm'r v. Perry, 39 Mo. 96, it is said: "The defense of drunkenness, like that of infancy duress, imbecility, etc., is a personal one, and if the party whose interest is affected by a contract made when drunk chooses to abide by it when sober, third persons are not permitted to interpose," citing Cole v. Gibbons, 3 P. Wms. 290. In Colbern v. Robinson, 80 Mo. 541, it is held that though a creditor is overreached and defrauded by another, the fact is not a matter of which the creditors could take advantage....
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