Walsh v. Ketchum

• Citation: 84 Mo. 427
• Parties: WALSH, Plaintiff in Error, v. KETCHUM, et al.
• Decision Date: 31 October 1884
• Court: United States State Supreme Court of Missouri

84 Mo. 427

WALSH, Plaintiff in Error,

v.KETCHUM, et al.

Supreme Court of Missouri.

October Term, 1884.

Error to St. Louis Court of Appeals.

AFFIRMED.

G. M. Stewart for plaintiff in error.

(1) The deed of February 12, 1872, to Logan D. Dameron without any consideration is void as to plaintiff, who was an existing creditor. Hurley v. Taylor, 78 Mo. 238; Payne v. Stanton, 59 Mo. 159; Potter v. McDowell, 31 Mo. 69; Patten v. Casey, 57 Mo. 118; Sloan v. Torrey, 78 Mo. 633; City Nat'l Bk. v. Hamilton, 34 N. J. 160; Crawford v. Kirksey, 55 Ala. 282; Wait on Fraudulent Conveyances, sec. 93; Barhydt v. Perry, 57 Ia. 416; Lockhardt v. Bulkley, 10 W. Va. 87. (2) If the deed is valid, Ewing C. Ketchum has an interest in the property subject to sale for the payment of this debt to the extent of all payments he has made since said deed of February 12, 1872, for taxes, insurance, improvements, and the reduction of the deed of trust. Kesley v. Bruns, 45 Mo. 234; Tillman v. Tillman, 50 Mo. 40; Woodward v. Stephens, 51 Mo. 443; Burgess v. Carr, 52 Mo. 43; White v. McPheeters, 75 Mo. 286-294; Workman v. Price, 47 Ill. 22; Hackett v. Barley, 86 Ill. 74. (3) The case involves title to real estate. Baier v. Berberich, 77 Mo. 413.Pattison & Crane for defendants in error.

(1) An appeal does not lie to this court because the amount involved is less than $2500. (2) This is not a case involving title to real estate. State ex rel. v. Court of Appeals, 67 Mo. 199; Umbarger v. Watts, 25 Gratt. 167; Smith v. Bryan, 34 Ga. 53. (3) The deed to Mrs. Ketchum's trustee was not in fraud of creditors; the donation, if such it were, was very small in proportion to the aggregate of Mr. Ketchum's property. Chambers v. Sallee, 29 Ark. 407; Brown v. Spivey, 53 Ga. 155; Salmon v. Burnett, 1 Conn. 525; Bird v. Bolduc, 1 Mo. 701. Patton v. Casey, 57 Mo. 118. (4) A voluntary conveyance is not per se fraudulent as against creditors prior or subsequent, but the bona fides is a question of fact under all the circumstances attending its execution. Hindes' Lessee v. Longworth, 11 Wheat. 213; Lane v. Kingsbury, 11 Mo. 402; Howard v. Williams, 1 Bailey 575; Lloyd v. Fulton, 91 U. S. (1 Otto) 485; Priquet v. Swan, 4 Mason C. C. R. 443; Lusk v. Wilkinson, 5 Vesey 384. And that existing indebtedness does not render a gift, or voluntary conveyance, absolutely void as to creditors, if there is no intention on the part of the donor to hinder, delay or defraud creditors. Smith v. Yell, 8 Ark. 470; Gridley v. Watson, 53 Ill. 186; Hackett v. Bailey, 86 Id. 74. (5) It was not a donation, for ( a) every cent that it cost was borrowed. And the effect of this is not altered by the fact that a part of the money was put into Ketchum's business, and then drawn out in instalments for the purpose of paying off the debt. ( b) Ketchum received from his wife more money than he ever paid on this property. (6) If this conveyance should be set aside, respondent would be entitled to a homestead of much greater value than the equity of redemption now existing. R. S., sec. 2691; Vogler v. Montgomery, 54 Mo. 577; State exrel. v. Diveling, 66 Id. 475. (7) Plaintiff has not exhausted his legal remedies. There is no evidence even that an execution has been returned nulla bona.

NORTON, J.

This suit was instituted in St. Louis circuit court by plaintiff, a judgment creditor of defendant, Ewing C. Ketchum, to subject to sale for the satisfaction of the judgment, certain real estate, the legal title to which is invested in defendant, Dameron, as trustee for defendant, Louisa C. Ketchum, wife of said Ewing C. It is substantially averred in the petition, as the ground for the relief prayed for, that in February, 1872, Ewing C. Ketchum was indebted to plaintiff in the sum of money for which plaintiff's judgment was rendered in 1879; that said Ketchum in 1872 was the owner of the real estate in question, and at his request the deed conveying it to said Dameron in trust for his wife was made; that the deed was voluntary and without consideration, and made for the purpose of putting the property beyond the reach of creditors. It is also alleged that defendant, Ketchum, has no other property out of which plaintiff can make his judgment; that Ketchum had, out of his own money, put valuable improvements on the property conveyed, and that it was held in secret trust for him to defraud creditors. The answer was a general denial, and on the trial in the circuit court the bill was dismissed and judgment rendered for defendant, which, on appeal to the St. Louis court of appeals, was affirmed, and the case is before us on appeal from said court.

It is insisted by appellant that, inasmuch as Ketchum was indebted to him at the time the voluntary conveyance of the real estate in question was made, that such conveyance as to him is void, and that it should be so declared. We do not understand this to be the law. While such a conveyance is presumptively fraudulent, the presumption may be rebutted. Bump on Fraudulent Conveyances, pages 275-6, states the rule thus: “The presumption of an intent to delay, hinder, and defraud creditors arising from a voluntary conveyance by a person who is in debt is not conclusive, for such a conveyance is fraudulent only when it necessarily delays, hinders, or defrauds them. * * * The true rule by which the fraudulency or fairness of a voluntary conveyance is to be ascertained in this respect, is founded on a comparative indebtedness, or, in other words, on the pecuniary ability of the donor at the time to withdraw the amount of the donation from his estate without the least hazard to his creditors, or in any material degree lessening their then prospects of payment.” In such cases “the burden of proof rests upon the donee to establish the circumstances which will repel the presumption of a fraudulent intent. The conveyance stands condemned as fraudulent unless the facts which may give it validity are proved by him. If no evidence is given to show that the donor had ample means to meet his liabilities, then the transfer must be deemed void as against creditors.” So in the case of Lloyd et al. v. Fulton, 91 U. S., 479, when, after full examination of tne authorities, it is said: “The rule as now established is, that prior indebtedness is only presumptive and not conclusive proof of fraud, and this presumption may be explained and rebutted.”

It has never been held in this state, when the point was involved in the decision that a voluntary conveyance, as to existing creditors, is void, but the contrary has been affirmed in the case of Bird v. Bolduc, 1 Mo. 702, and Lane v. Kingsbury, 11 Mo. 402. In the latter case it...