LaCkland v. Smith

• Decision Date: 22 January 1878
• Citation: 5 Mo.App. 153
• Parties: HENRY C. LACKLAND, Appellant, v. THOMAS F. SMITH ET AL., Respondents.
• Court: Missouri Court of Appeals

5 Mo.App. 153

HENRY C. LACKLAND, Appellant,

v.THOMAS F. SMITH ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Jan. 22, 1878.

1. One cannot so tie up his real estate under a deed of trust as to secure to himself an income and protect the property from future creditors. Equity will apply the rents and profits of the land to the satisfaction of debts accruing either prior or subsequent to the execution of the conveyance.

2. A conveyance without consideration, with intent to protect the property conveyed from future creditors, is fraudulent in law as to those creditors.

3. A bill in equity framed with a double aspect is not necessarily bad. Where there is but one substantial demand, the bill is not bad because it asserts the claim in two forms.

4. Where the case is one of equity cognizance, the parties cannot demand a jury to try any issue of fact which may arise. A court of equity rightfully in possession of the cause will determine all questions arising in the cause, whether of law or of fact.

5. Where a debtor has removed from the State, the creditor may resort to equity to set aside a fraudulent conveyance before reducing his claim to a judgment at law.

6. A creditor seeking the removal of a fraudulent obstruction to levy or sale may file his bill in equity as soon as he has obtained a specific lien upon the property in question.

7. The Statute of Limitations ceases to run in favor of a debtor when he leaves the State to reside in another, and the time of his absence must be counted out. The fact that the debtor left property in the State subject to attachment will not keep the statute running.

8. An attaching creditor may file his bill to set aside a conveyance on the ground of fraud, at any time within five years of the date of his attachment suit, provided it be within ten years of the recording of the conveyance. He is not an “aggrieved party,” within the meaning of the statute, until his attachment suit is commenced.

9. One is not barred from instituting a proceeding in equity to set aside a fraudulent deed by the fact that he might have sued by publication.

APPEAL from St. Louis Circuit Court.

Reversed and remanded.

MARTIN & LACKLAND, for appellant: A conveyance made with the intent to avoid the payment of debts is void; and this intent may be proved by facts and circumstances happening prior and subsequent to the conveyance.--Bump's Fr. Conv. 321, 322, 542; Larkin v. McMillan, 49 Pa. 29; Bowling v. Bishop, 29 Beav. 417; Case v. Phelps, 39 N. Y. 164; Pappan v. Butler, 7 Bosw. 480; Dick v. Hamilton, Deady, 322; Partridge v. Gupt, Amb. 599; Winchester v. Carter, 12 Allen, 606; 97 Mass. 140; 102 Mass. 272. A debtor hinders and delays his creditors when he places his assets beyond the reach of process.-- Kimball v. Thompson, 4 Cush. 441; Borland v. Mayo, 8 Ala. 104; Wheldon v. Wilson, 44 Me. 1. A man cannot tie up his estate so as to enjoy it exempt from the claims of his creditors.-- Young v. Hermans, 66 N. Y. 374; McIlvain v. Smith, 42 Mo. 45; Waddingham v. Loker, 44 Mo. 132; Hamilton v. Zimmerman, 5 Sneed, 39; Trip v. Childs, 14 Barb. 85; Patterson v. Campbell, 9 Ala. 933. In such a case equity will apply the rents and profits of the estate to the payment of debts.-- Lackland v. Garesché, 56 Mo. 271. Where the debtor is a non-resident, a creditor's bill in equity may be entertained before he has reduced his claim to a judgment at law.-- Anderson v. Bradford, 5 J. J. Marsh. 76; Scott v. McMillen, 1 Litt. 302; Kippen v. Glancy, 2 Blackf. 356; Peay v. Morrison, 10 Gratt. 149; Pope v. Solomon, 36 Ga. 541; Greenway v. Thomas, 14 Ill. 271. Equity does not require a judgment where it would be unavailing.-- Pendleton v. Perkins, 49 Mo. 567; Beal v. McVicker, 3 Mo. App. 592; Luthy v. Woods, 1 Mo. App. 167; State Assn. v. Kellogg, 52 Mo. 583. Bills in equity framed with a double aspect are not necessarily bad.-- Bennett v. Wade, 2 Atk. 324, 335; Strong v. Watson, 11 Ala. 324; Peyton v. Rose, 41 Mo. 257; Crawford v. Kisky, 50 Ala. 590; Cuyler v. Moreland, 6 Paige, 273. Limitations.-- Whittelsey v. Roberts, 51 Mo. 120; Fike v. Clark, 55 Mo. 105; Scruggs v. Clark, 53 Mo. 497; Veuici v. Cademartori, 59 Mo. 352; Miller v. Tyler, 61 Mo. 401; Gates v. Andrews, 37 N. Y. 637; Jones v. Read, 1 Humph. 355; Blanton v. Whittaker, 11 Humph. 355; Hancock v. Hough, 1 Mo. 678; Fisher v. Fisher, 43 Miss. 212.N. HOLMES and A. J. P. GARESCHE, for respondents: In order that a creditor may, in equity, have an equitable trust-estate, which cannot be reached at law, applied in satisfaction of his debt, he must first establish his claim by a judgment at law.-- Neal v. Duke of Marlborough, 3 Myl. & Cr. 415; Merry v. Freeman, 44 Mo. 518; Alnut v. Leper, 48 Mo. 321; McIlvaine v. Smith, 42 Mo. 49; 2 Spence's Eq. Jur. 40, 41. As plaintiff had elected to proceed upon this petition as one single count in equity, all those allegations of the petition which constituted a cause of action at law, and sought to obtain judgment or to establish an indebtedness on the notes described, should have been treated as surplusage, and the notes and other evidence offered to prove such indebtedness should have been disregarded as being inadmissible for that purpose.-- Peyton v. Rose, 41 Mo. 261; Bobb v. Woodward, 42 Mo. 486; Jones v. Moore, 42 Mo. 419; Gray v. Payne, 43 Mo. 204; Wyman v. Casey, 43 Mo. 303; Henderson v. Dickey, 50 Mo. 165; Myers v. Field, 37 Mo. 434. Equity jurisdiction; non-residents.-- Scott v. McMillen, 1 Litt. 302; Kepper v. Glaney, 2 Blackf. 357; Peay v. Morrison, 10 Gratt. 149; Farrar v. Haseldon, 9 Rich. Eq. 331; 2 Wag. Stat. (1870) 1008, sec. 13; 2 Blackf. 357; 9 Rich. Eq. 331; O'Brien v. Coulter, 2 Blackf. 423. Limitations.-- Rogers v. Brown, 61 Mo. 187; Smith v. McCutchen, 38 Mo. 417.

BAKEWELL, J., delivered the opinion of the court.

This is an action by a creditor for equitable relief against the estate of his debtor. The petition alleges that the debtor has created a trust upon his own estate, and is framed with a double aspect. It asks the court to sweep away the trust if it be regarded as fraudulent, or to sequestrate the rents if the trust-deed is found to be valid. On hearing, the trial court dismissed the bill, and plaintiff appeals.

The original petition was filed Nov. 11, 1872. The allegations of the bill are that defendant Smith executed seven promissory notes, which are fully described, and which are owned by plaintiff. These notes are of various dates, from March 28, 1860, to Feb. 21, 1861, and mature at various periods from July 2, 1860, to Nov. 12, 1861. That on Oct. 18, 1871, judgment for $2,892.05 was rendered on these notes in a proceeding in attachment commenced by plaintiff in the St. Louis Circuit Court, in which proceeding the real estate described in this petition was attached as the property of defendant Smith. Service upon Smith in the attachment suit was by publication only, and the execution was returned unsatisfied. The petition further alleges that Smith, at the date of the attachment, and before, was seized of the real estate described in the petition, and that the same is encumbered, embarrassed, and covered by certain conveyances in the petition described; that on Oct. 10, 1855, Smith, being seized of said real estate, free of all encumbrances, conveyed the same to Charles Gibson; that this conveyance was without consideration, and the property remained in the name of Gibson, but subject to the control of Smith, who had the beneficial enjoyment of it; the deed to Gibson was recorded Feb. 11, 1856; that afterwards, Gibson, at the instance of Smith, by deeds dated April and May, 1857, conveyed said property to Riggin, on certain trusts fully set out in the petition; that defendant Garesché was, on June 6, 1865, substituted as trustee of Smith, and has ever since remained trustee, receiving and transmitting the rents to Smith, who is a non-resident; that the net income thus received is more than $5,000 per annum; that among the trusts declared in these deeds was one in favor of Smith, of an equitable nature, and such that it could not be levied on or sold under attachment or execution, and could be reached only in equity; that the conveyances in question were made to defraud both prior and subsequent creditors of Smith, and are to his use, and void; that Smith has no other property in Missouri; and plaintiff prays that the demand proceeding from said notes, and the judgment upon said demand by attachment, be adjudged a valid lien in equity upon said real estate, and the rents, issues, and profits thereof; that the conveyances be inquired into, and, if found null and void, so much of said real estate as shall be sufficient to satisfy the demand of plaintiff be divested and declared free of said trust, and be vested absolutely in said Smith, and be ordered sold for the purpose of satisfying said demand; and if said conveyances be found to be valid as against creditors, that the profits of said real estate be sequestered and held by order of court for the satisfaction and payment of said demand, and the trustee be enjoined from paying any of the rents to Smith, and be ordered to pay the same to plaintiff until satisfaction of his demand.

Defendants filed separate answers, denying all the allegations of the petition, and averring that plaintiff's cause of action did not accrue within ten years; and plaintiff replied that Smith, before the expiration of ten years, left Missouri, and has ever since resided out of the State.

At the hearing, the plaintiff claimed that his proceeding was in equity alone, and offered in evidence the notes described in the petition. To this evidence defendant objected on the ground that the issue of indebtedness was triable at law, and that defendants were entitled to a jury; and also that these allegations, being blended with a count in equity, should be rejected as surplusage. The objection was overruled. The petition and record in the attachment suit of the present plai...