Bank v. Richmond
| Decision Date | 04 December 1919 |
| Parties | MILAN BANK, Appellant, v. HENRY RICHMOND et al |
| Court | Missouri Supreme Court |
Appeal from Sullivan Circuit Court. -- Hon. Fred Lamb, Judge.
Affirmed.
J. B Painter and E. B. Fields for appellant.
(1) Every conveyance of real estate to hinder or defraud creditors either prior or subsequent is clearly and utterly void. R. S. 1909, sec. 2881. (2) It has been held sound doctrine that actual (as contradistinguished from constructive) fraud participated in by both grantor and grantee, will vitiate a conveyance as to subsequent as well as to existing creditors. Cole v. Cole, 231 Mo. 260. (3) Fraud is rarely ever susceptible of positive proof. Its vermiculations are chiefly traceable by covered tracks and studious concealments. It is not to be presumed; but anything which satisfies the mind and conscience of its existence is sufficient. Massey v. Young, 73 Mo. 260; Burgert v. Borchert, 59 Mo. 80; State to use v. Estel, 6 Mo.App 6; Groschke v. Bordenheimer, 15 Mo.App. 353; Frederick v. Allgaier, 88 Mo. 598; Gordon v Ismay, 55 Mo.App. 322; Martin v. Estes, 132 Mo. 402; Howard v. Zweigart, 197 S.W. 46. (4) Want of consideration, or insufficiency of consideration for a sale of land or other property, by a debtor is always an element of fraud. Childers v. Pickinpaugh, 219 Mo. 376; Bank of Boonville v. Vollrath, 135 Mo.App. 63; Jones v. Hogan, 135 Mo.App. 347, 211 Mo. 45; Kennedy, Admr. v. Duncan, 157 Mo.App. 212; Johnson v. Mason, 178 Mo.App. 109; Lionberger v. Baker, 88 Mo. 447; Gentry v. Field, 143 Mo. 399. (5) A sale by an insolvent debtor not to pay his debts but to turn his seizable property into cash or notes that may be easily withdrawn from the reach of his creditors, if the purchaser had knowledge of such proposition, will be set aside. First National Bank v. Fry, 216 Mo. 24. (6) Knowledge of circumstances which would place an ordinary prudent man on inquiry may authorize the jury to find that the purchaser had knowledge that the property was sold in fraud of creditors. Johnson v. Mason, 178 Mo.App. 109; Bank of Commerce v. Brunswick Tobacco Co., 155 Mo. 602. (7) Persons who having means of inquiring knowledge of fraud shut their eyes to the incriminating circumstances for the purpose of obtaining advantage through the fraudulent acts, under the plea that they had no knowledge thereof, are chargeable with fraud. Veney v. Furth, 171 Mo.App. 678. (8) Where both the grantor and grantee of land intend to defraud the creditors of the grantor the conveyance should be set aside regardless of the adequacy of the consideration. Aull v. Galgin, 234 Mo. 171; Burgert v. Borchert, 59 Mo. 80; McDonal v. Hoover, 142 Mo. 484.
D. M. Wilson for respondent.
(1) He who comes into equity must come with clean hands. Modern Horse Shoe Club v. Stewart, 242 Mo. 421; Robinson v. Siple, 129 Mo. 208; Jarrett v. Morton, 44 Mo. 275. And this doctrine may be invoked by the appellate court on its own motion. Creamer v. Bivert, 214 Mo. 485. Morris paid the circuit clerk $ 3400.77. The clerk retained the costs (some $ 40), and paid the rest, say $ 3360, to the Milan Bank, and its attorneys satisfied the judgment rendered in the suit on the $ 3280, on the margin of the record. This money was part of the purchase price paid by Morris for the 280 acres, as the bank well knew. It accepted the money, thus recognizing the legality of the sale by Henry Richmond to Morris, and then, retaining the money, and never even offering to pay it back to Morris, brings this suit to set aside that very deed on the ground of fraud. (2) However clear Henry Richmond's fraud may be, the conveyance to Morris cannot be declared fraudulent unless Morris knew of Richmond's intent to defraud the bank and participated in it. Ryan v. Young, 79 Mo. 30; Bank v. Worthington, 145 Mo. 91; Dougherty v. Cooper, 77 Mo. 528.
WHITE, C. Railey and Mozley, CC., concur.
In the Circuit Court of Grundy County, September 29, 1913, the plaintiff in this case recovered judgment against defendant Henry Richmond in the sum of $ 12,999.68, the amount of a note for seven thousand dollars, executed September 14, 1905, and interest. On March 26, 1914, plaintiff filed his petition in this case in the Circuit Court of Sullivan County for the purpose of enforcing the payment of said judgment against two hundred and eighty acres of land in Sullivan County, formerly owned by the defendant Richmond and conveyed by him to defendant Morris, and by defendant Morris conveyed to defendant Meeks, it is claimed in fraud of the plaintiff. The cause was tried and judgment rendered September 11, 1915, in favor of defendants, and plaintiff appealed to this court.
The salient facts leading up to the filing of the present suit are as follows:
On September 14, 1905, W. H. Richmond, son of defendant Henry Richmond, was indebted to the Milan Bank, plaintiff herein, on two notes, one for seven thousand dollars and one for three thousand two hundred and eighty dollars, with the defendant Henry Richmond as his surety; other persons also were sureties on the seven-thousand-dollar note. The incidents connected with the placing of this indebtedness are unimportant for our purpose here. Soon afterwards suit was brought on the three-thousand-two-hundred-and-eighty-dollar note and judgment obtained against the defendant Henry Richmond, his son having fled the country at the time, it appears a fugitive from justice. September 20, 1905, six days after the notes were signed, an attachment suit was brought by the plaintiff bank on the seven thousand-dollar note. Four hundred acres of land, including the land in controversy here, was attached; also the land of other defendants, sureties on the note. On January 3, 1906, this attachment suit was dismissed by the plaintiff. On the sixteenth day of January another attachment suit was brought on the same note and the same land was attached.
On the eleventh day of January, 1906, eight days after the dismissal of the first attachment suit, and five days before the second was brought, the defendant Henry Richmond sold the two hundred and eighty acres of land in controversy to defendant Morris for twenty dollars per acre, the total price amounting to five thousand six-hundred dollars, which was paid in cash and conveyance was made to Morris. Something like a year later Morris sold and conveyed the land to defendant Meeks for seven thousand dollars.
The second attachment suit was sent on change of venue to Macon County, where it was tried and judgment rendered in favor of the defendant Richmond. The case was appealed to this court, was reversed and remanded and is reported in 235 Mo. 532.
That case was again tried in the Macon County Circuit Court, January 13, 1912, and at the close of the defendant's evidence the plaintiff took a nonsuit and the attachment was dissolved. On the same day a third suit on the same note was brought in the Sullivan County Circuit Court, and the same four hundred acres of land were attached. This was taken on change of venue to Grundy County. There a peculiar proceeding was had. One of the sureties on the note, Amon Richmond, had been adjudged insane and was represented by defendant in the suit by a guardian. On motion of the guardian he was granted a separate trial. The trial proceeded against the defendant Henry Richmond, and judgment was rendered September 29, 1913, as stated.
In order to support its position that a fraudulent purpose attended the sale of Richmond's property, of which defendants Morris and Meeks had notice, plaintiff offered evidence attempting to show that when the conveyance by Richmond to Morris was made, eight days after the first attachment suit was dismissed and five days before the second was brought, Morris knew of the existence of the seven-thousand-dollar note and of the suit on it; that about the same time, Richmond sold the remainder of the land, a hundred and twenty acres, to his son Jesse Richmond; that he sold his personal property, including sheep and cattle, to other persons at the same time, and that Morris knew he was making disposition of his other property. It was further shown that the defendant Richmond, of the proceeds if the land, gave his wife nearly two thousand two hundred dollars, and gave his daughter various sums of money.
It was also shown by appellant that Morris was not a land buyer. He was seventy years old, too old to farm; that the trade was suggested to him and accepted by him on very brief notice, without looking at the land. Other facts of that character were proven to indicate the improbability of his caring to purchase the farm on his own account. He borrowed the entire fifty-six hundred dollars to pay for the land from the First National Bank. One Ike Guinn, president of the bank, and one Johnson, a saloonkeeper, who was a director of the bank, were sureties on his note and there seemed to be an effort on the part of plaintiff to connect the officers of the bank with the deal.
On the other hand, the defendant Morris testified that he was worth about eight thousand dollars at the time; that he had two thousand dollars stock in the First National Bank, and about eight hundred dollars in cash; so that the loaning of that amount of money to him was not so extraordinary.
Evidence also was offered by plaintiff to show that the land, two hundred and eighty acres, was worth from thirty to forty dollars an acre. Eight witnesses swore to values varying between those sums; all or nearly all of whom, however, had some connection with the plaintiff bank.
Eleven witnesses, sworn on behalf of defendant, put the value of the land at from seventeen to twenty-five dollars per acre, a majority of them placing it at twenty dollars per...
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