Reynolds v. Faust

• Decision Date: 23 December 1903
• Citation: 77 S.W. 855,179 Mo. 21
• Parties: REYNOLDS v. FAUST et al.
• Court: Missouri Supreme Court

77 S.W. 855

179 Mo. 21

REYNOLDS v. FAUST et al.

Supreme Court of Missouri, Division No. 1.

December 23, 1903.

FRAUDULENT CONVEYANCES—SUIT TO SET ASIDE.

1. As, under Rev. St. 1899, §§ 3398, 3399, a conveyance to defraud creditors may be set aside at the suit of a creditor, a complaint by a purchaser of land to set aside a prior mortgage, alleging merely that the mortgage was given to defraud creditors, and not alleging that he was a creditor, states no cause of action.

Appeal from Circuit Court, Cape Girardeau County; Henry C. Riley, Judge.

Suit by James G. Reynolds against Thomas M. Faust and others. Judgment for defendants. Plaintiff appeals. Affirmed.

Wilson Cramer, for appellant. Frank E. Burrough, for respondents.

MARSHALL, J.

This is a bill in equity to remove a cloud upon the title to a certain lot of ground in the city of Cape Girardeau, being a part of lot 1, range E, having a front of 42 feet on Broadway or Harmony street, by a depth northwardly of 99 feet, and for an injunction to restrain the defendants from foreclosing the deed of trust on the land, which is the cloud complained of. The petition alleges that the plaintiff is the owner in fee of the premises; that he acquired an undivided three-fourths interest therein from the former owners of that interest, Alfred Minton, William H. Minton, and James H. Thompson; that the other one-fourth interest was owned by Benjamin R. Hempstead, and that on March 12, 1896, he conveyed the same to his wife, Bettie D. Hempstead; that subsequently the plaintiff instituted a suit against Benjamin R. and Bettie D. Hempstead for the partition of the land; and that a decree in partition was entered, the land was sold, and the plaintiff became the purchaser thereof, and received a sheriff's deed, under which he claims title, and is now in possession of the land. The petition then charges that on January 13, 1896, Benjamin R. Hempstead, "for the pretended purpose of securing to the defendant Robert L. Taylor the payment of a certain promissory note for $3,000, alleged to have been executed by the said Benjamin R. and Bettie D. Hempstead to said Robert L. Taylor, payable twelve months after date, executed and delivered to the defendant Thomas M. Faust, as trustee, a certain deed of trust, conveying, among other parcels of land, the undivided interest in the premises heretofore described." It is then alleged that at the request of Taylor the trustee, Faust, advertised the property for sale under the deed of trust. The petition then proceeds as follows: "And plaintiff further states that the said deed of trust is fraudulent and void, and is a voluntary conveyance, without consideration, made and contrived by the said Benjamin R. Hempstead and the said Robert L. Taylor for the purpose of covering up the property of the said Benjamin R. Hempstead from his creditors; and said alleged promissory note is likewise without consideration, and was executed and delivered by the said Benjamin R. Hempstead and Bettie D. Hempstead to said Robert L. Taylor, and accepted by him, in pursuance of such fraudulent design and purpose. And plaintiff states that he purchased in good faith and for full value at said partition sale all of the right, title, and interest of the said Benjamin R. Hempstead and Bettie D. Hempstead in and to said premises; that the said deed of trust, which was recorded in the land records of said county on the 15th day of January, 1896, in Book T of Trusts and Mortgages, at page 68, is a cloud upon his title; that the contemplated sale by said trustee, Thomas M. Faust, of the undivided one-fourth interest in said premises so conveyed to him by the said Benjamin R. Hempstead, is for the benefit and at the instance of the said Benjamin R. Hempstead and Bettie D. Hempstead, and will operate as a fraud upon the rights of plaintiff, and cast a further cloud upon the title." The prayer of the petition is that the deed of trust be canceled as a cloud on the title, and that Taylor and Faust be enjoined from attempting to foreclose the same. The defendants interposed a general and special demurrer to the petition, the court sustained the demurrer, the plaintiff refused to plead further, judgment was entered for the defendants, and the plaintiff appealed.

The contention of the plaintiff is that the deed of trust from Hempstead to Taylor was intended to defraud Hempstead's creditors, and that the plaintiff is a subsequent purchaser from Hempstead, and, as such, has a right to have the fraudulent deed of trust canceled. The statute of 13 Elizabeth, c. 5, § 2 (2 St. at Large, p. 588), declared all conveyances, etc., made with intent to delay, hinder, or defraud creditors "to be clearly and utterly void, frustrate and of none effect," but limited it "only as against that person or persons, his or her heirs, successors, executors, administrators and assigns, and every of them, whose actions, suits, debts, accounts, damages, penalties, forfeitures, heriots, mortuaries, and reliefs by such guileful, covinous or fraudulent devices and practices, as is aforesaid, are, shall or might be in any ways disturbed, hindered, delayed or defrauded." This statute was passed in 1570, and it was provided that the act should "endure unto the end of the first session of the next parliament," but the act was afterwards made perpetual. 29 Eliz. c. 5. Afterwards, in 1585, the act of 27 Eliz. c. 4 (2 St. at Large, p. 636), was enacted, by which conveyances intended to delay, hinder, or defraud purchasers were declared "to be utterly void, frustrate and of none effect." Our statute (section 3398, Rev. St. 1899) declares every conveyance made to hinder, delay, or defraud creditors or purchasers, "as against said creditors and purchasers, prior and subsequent, to be clearly and utterly void." And section 3399, Rev. St. 1899, provides: "No such conveyance or charge shall be deemed void, in favor of a subsequent purchaser if the deed or conveyance shall have been duly acknowledged or proved and recorded, or the purchaser have actual notice thereof at the time of the payment of the purchase money,...