The State ex rel. First National Bank of Milan v. Trimble

• Citation: 287 S.W. 432,315 Mo. 966
• Decision Date: 11 October 1926
• Docket Number: 26545
• Parties: The State ex rel. First National Bank of Milan v. Francis H. Trimble et al., Judges of Kansas City Court of Appeals
• Court: United States State Supreme Court of Missouri

287 S.W. 432

315 Mo. 966

The State ex rel. First National Bank of Milan v. Francis H. Trimble et al., Judges of Kansas City Court of Appeals

No. 26545

Supreme Court of Missouri

October 11, 1926

Writ quashed.

W C. Irwin, L. A. Chapman, U. A. House and Kitt & Marshall for relator.

(1) When an attachment is instituted under the seventh clause of the attachment act, the attachment will be sustained if it is shown that the conveyance is voluntary or not given to secure a bona-fide debt, without showing further the defendants had the intent or purpose of hindering or delaying creditors. State v. O'Neill, 151 Mo. 85; Reed v Pelletier, 28 Mo. 177; Potter v. McDowell, 31 Mo. 62. (2) If, on the other hand, the conveyance is given to secure a bona-fide debt, then before the attachment can be sustained it must be shown that the defendant had the intent or purpose to hinder or delay creditors; but in that case an instruction, which tells the jury that the intent or purpose of the defendants to hinder or delay creditors is a prerequisite to a fraudulent conveyance, to be proper, must also contain therein a submission to the jury that they must first find the conveyance to have been given to secure a bona-fide debt and if the jury finds it was so given, then before it could be fraudulent they must find that the intent or purpose of defendant was to hinder or delay creditors. Nat. Tube Works v. Machine Co., 118 Mo. 375. (3) The trial court gave Instruction 4, for defendants, which broadly stated the rule that before a conveyance could be fraudulent under the seventh clause of the attachment act, it must be shown that defendants had the intent or purpose, at the time of the execution of the conveyance, to hinder or delay creditors without first requiring the jury to find that the conveyance was given to secure a bona-fide debt. This was error because, under the authorities, supra, the intent or purpose of defendants to hinder or delay creditors is not an essential to a fraudulent conveyance, unless and until it is first shown, and found by the jury, that the conveyance was given to secure a bona-fide debt. The Court of Appeals approved that instruction, and held it was a prerequisite to a fraudulent conveyance, under the seventh clause of the attachment statute, that the defendants have an intent or purpose at the time to hinder or delay creditors; that holding conflicts with the above controlling decisions of this court.

Scott J. Miller and Roger Stone Miller for respondents.

Ragland P. J. All concur, except Graves, J., absent.

OPINION

RAGLAND

This is an original proceeding in certiorari, wherein relator seeks to have quashed on the ground of conflict of decision, the record of the Kansas City Court of Appeals in a cause lately pending before it on appeal from the Circuit Court of Livingston County, entitled: First National Bank of Milan, appellant, v. Oliver Kibble and Mary E. Kibble, respondents.

The opinion of the Court of Appeals, in so far as it states facts which have a bearing on the question raised in this proceeding, is as follows:

"This is an action by attachment in aid of a suit upon a promissory note of $ 4160 executed by defendants to plaintiff. . . .

"Plaintiff is a national bank of Milan, Sullivan County, Mo., and defendants are young married people living on a farm near Milan in that county. They had 160 acres of land, where they lived, against which there was a first mortgage of $ 7,000, a second for $ 3,000, and a mortgage to plaintiff given in security for the note which is the basis of this action. Besides the home farm Oliver Kibble leased from his father-in-law, W. H. Columbar, 200 acres adjoining the home place on the south, at a rental of $ 700 per year. For the first year's rent defendants issued their promissory note secured by a chattel mortgage covering certain chattels of defendants not covered by any previous pledge.

"At this time defendants' finances were considerably involved, including certain indebtedness to the plaintiff secured by chattel mortgage on thirty head of registered black cattle and some mules and horses. On or about August 12, 1922, plaintiff demanded as additional security a mortgage on defendants' growing crop, but this security was not given. . . .

"The suit on the note in question was instituted in the Circuit Court of Sullivan County, and by change of venue was transferred to Livingston County, where it was tried. In aider of the principal suit, plaintiff swore out an attachment in the Circuit Court of Livingston County, and thereunder attached and sold all of Kibble's property, including his registered cattle, horses, hogs and farm implements. . . . The attachment was taken out in the name of plaintiff bank, but was sworn to by Lenny Bladridge, its cashier. It contains the following statutory causes of action, to-wit: . . .

"'That the defendants have fraudulently conveyed or assigned their property or effects, so as to hinder or delay their creditors.' . . .

"There was a plea in abatement timely filed by defendants, denying specifically each cause of action stated in the affidavit for attachment. The cause of action was tried before a jury on the plea in abatement resulting in a verdict for defendants and a judgment thereon was accordingly entered. . . .

"In considering the peremptory instructions to sustain the attachment offered by plaintiff at the close of all the evidence, it is necessary to refer briefly to the evidence. Plaintiff attempted to show (1) that defendants fraudulently conveyed or assigned their property to one Columbar. This, of course, refers to the note and chattel mortgage in favor of Columbar, and to support the charge it must be shown that the property was fraudulently conveyed so as to hinder and delay defendants' creditors. The evidence of defendants was to the effect that the mortgage to Columbar was given in good faith to secure a note for a year's rent on 200 acres of land. Accepting this as true, it will not be insisted, we take it, that this evidence was not of sufficient substantiality to take the case to the jury on the question of fraudulent conveyance of the property, so as to hinder or delay creditors."

From the foregoing it appears that while the defendants Kibble were in straightened financial circumstances, owing to the fact that both their land and their registered cattle were mortgaged for sums in excess of their value, they gave a chattel mortgage on all their remaining property to their father, purporting to secure rent on land which he...