Balz v. Nelson

• Decision Date: 18 February 1903
• Citation: 171 Mo. 682,72 S.W. 527
• Parties: BALZ et al. v. NELSON et al.
• Court: Missouri Supreme Court

72 S.W. 527

171 Mo. 682.

BALZ et al. v. NELSON et al.

Supreme Court of Missouri, Division No. 1.

February 18, 1903.

FRAUDULENT CONVEYANCES — TRANSFERS AFTER SUIT BROUGHT — DEED TO HOMESTEAD — APPEAL — SUPREME COURT — JURISDICTION — TITLE TO REAL ESTATE.

1. Where, pending an action against defendant, he conveyed certain land to a third person, who thereafter conveyed the same to the defendant's wife, a suit to set aside such conveyances as fraudulent against defendant's creditors is an action involving the title to real estate, of which the Supreme Court alone has appellate jurisdiction.

2. Where, pending an action against defendant, he conveyed his homestead, in which he had an equity of redemption amounting to only $1,200, through a third person, to his wife, such conveyance was not fraudulent as to his creditors.

3. Defendant received from his wife $1,000 in 1885 and $2,350 in 1887. No note was given, nor time specified when the money was to be repaid, and no interest was ever paid, but defendant promised to protect her if he got into any trouble. In 1896 defendant's property was damaged by a cyclone, when his wife asked for her money or security, but she obtained neither until January 19, 1897, three days after suit was brought against defendant for injuries resulting in the death of plaintiff's intestate, when he conveyed certain property to a third person, who thereafter conveyed the property to the wife. Held, that such conveyances were fraudulent.

Appeal from St. Louis circuit court; Jas. E. Withrow, Judge.

Action by Jacob Balz and others against Nels Nelson and others to set aside certain fraudulent conveyances. From a judgment in favor of plaintiffs, defendants appeal. Modified.

This is a bill in equity to declare fraudulent and void and to cancel two deeds to certain real estate in the city of St. Louis — one from Nels Nelson and Sophie, wife, to her sister Emma Decker, and the other from Emma Decker to Sophie Nelson — and thereby to divest the title to said real estate out of Sophie Nelson and leave it in Nels Nelson, as it was before said deeds were made, and to have the land sold to satisfy a judgment in favor of the plaintiffs and against Nels Nelson. The circuit court entered a decree as prayed, and the defendants appealed to the St. Louis Court of Appeals. That court transferred the case to this court on the ground that title to real estate was involved, and hence this court alone had appellate jurisdiction. Balz v. Nelson, 86 Mo. App. 374. The case made is this: In 1884 Sophie Nelson was the wife of William Kleddick. He died, and she received $2,000 life insurance. She then married Nelson, and in 1885 she loaned him $1,000. About two years thereafter she sold some real estate she owned before her marriage to Nelson, and received therefor $1,350; and this, with the remaining $1,000 insurance money, she also loaned Nelson. They both say he verbally agreed to pay her 8 per cent. interest, but he never did so. They both further say there was no note or other evidence given for the money borrowed, and no time specified when he should repay her. But they say he "promised if he got into any trouble he would protect her." She made no demand on him for the interest, nor for the loan, nor for security or protection, until after the cyclone which struck St. Louis on May 27, 1896, and which damaged his property to the extent of about $3,500; and he paid no attention to that demand, and she did not then further insist. About four months after that time he was building a house, and through his negligence the plaintiff's child was killed. On the 16th of January, 1897, the plaintiffs began suit against him for $5,000 damages for the death of their child. Three days after this suit was begun, and after the summons had been served, and after she knew of the suit, he and his wife conveyed three parcels of land that stood in his name on the records to her sister Emma Decker, and she conveyed the same to Mrs. Nelson. The consideration expressed in these deeds was nominal. Their deed to Emma Decker was immediately recorded, but her deed to Mrs. Nelson was not recorded until November 19, 1897. In the meantime, on September 1, 1897, and before the judgment in favor of the plaintiffs was rendered, and before the deed from Emma Decker to Mrs. Nelson was put upon record, Emma Decker made a quitclaim deed to Nels Nelson for a portion of one of the tracts or parcels of land, and he sold it to an innocent third person for $4,100. Both Nels Nelson and Sophie Nelson testified that he had no other property than that covered by the deed to Emma Decker, and he admitted that for six years prior to the date of the trial of this cause, which was on May 15, 1899, he had done no work. Emma Decker acted in the matter simply to oblige her sister and brother-in-law. She paid nothing and received nothing for the land. The Nelsons say the conveyances were made in pursuance of his promise that "if he got into trouble he would protect her," made at the time she loaned him the money. Thereafter, on January 4, 1899, the plaintiff recovered on judgment against him for $600, and it remained unsatisfied. The plaintiffs claim that the conveyances were fraudulent and void, and intended to hinder, delay, and defraud them as creditors of Nels Nelson, and that, while an insolvent has a right to prefer any of his creditors, still a conveyance that was intended to hinder, delay, and defraud creditors is void, even if made to one who is a bona fide creditor, if the creditor knew the conveyance was intended to defraud the grantor's creditors, and if the creditor participated in the fraud, and that even conceding that the $3,350 in money was a loan, and not a gift, from Sophie to Nels Nelson, still the deeds in question here were intended to defraud his creditors, and not as a preference to Mrs. Nelson. The trial court found the deeds to be fraudulent, and entered a decree for the plaintiffs, and the defendants appealed.

S. T. G. Smith, for appellants. C. S. Broadhead and Percy Werner, for respondents.

MARSHALL, J. (after stating the facts).

1. The primary question in this case is whether this court has jurisdiction. It is a bill in equity to declare fraudulent and void the deeds of Nels and Sophie Nelson to Emma Decker, and from Emma Decker to Sophie Nelson, and for an order of sale of the real estate to satisfy the plaintiffs' judgment. Those deeds are muniments of title. They constitute the public record which declares to the world that the title is in Sophie Nelson. Without them, the title would in fact, and according to the record, be in Nels Nelson. The judgment to be rendered, if the plaintiffs succeed, will therefore strike down and cut out, root and branch, these muniments of title, and the effect of a judgment in plaintiffs' favor will be to divest the title out of Sophie Nelson and revest it in Nels Nelson. The fact that after this is done the land can be sold, as the land of Nels Nelson, to satisfy the plaintiffs' judgment, does not change the character of the action, nor take out of the case the main issue in controversy, to wit, the question whether the land belongs, of right, as to these creditors, to the wife or the husband; nor does the fact that if the husband should pay the plaintiffs' judgment, and thereby take away the plaintiffs' right to question or controvert the title that is now in Mrs. Nelson, affect the matter. No such issue is raised, and no such condition presented, in this case. The only controverted issue is over the title. The subsequent sale of the land will follow, of course, if the deeds that vested the title in Mrs. Nelson are set aside, and the title is thereby revested in Nels Nelson. The title to real estate is thereby directly and necessarily involved in this case, and therefore the appellate jurisdiction is in this court, and not in the Court of Appeals. Price v. Blankenship, 144 Mo., loc. cit. 209, 45 S. W. 1123; May v. Trust Co., 138 Mo. 275, 39 S. W. 782; Hanna v. Land Co., 126 Mo. 9, 28 S. W. 652; Bank v. Ins. Co., 145 Mo. 127, 46 S. W. 615; Edwards v. Railway, 148 Mo., loc. cit. 516, 50 S. W. 89. See, also, Beland...