Benne v. Schnecko

• Decision Date: 24 February 1890
• Citation: Benne v. Schnecko, 13 S.W. 82, 100 Mo. 250 (Mo. 1890)
• Parties: BENNE v. SCHNECKO et al.
• Court: Missouri Supreme Court

13 S.W. 82

100 Mo. 250

BENNE v. SCHNECKO et al.

Supreme Court of Missouri.

February 24, 1890.

FRAUDULENT CONVEYANCES — SUBROGATION — JUDGMENT — ACTION BY ASSIGNEE — EQUITY.

1. In an action to set aside a conveyance by a husband in trust for his wife, as in fraud of creditors, it appeared that the conveyance embraced all of the husband's land as well as his personalty, consisting of farming implements, household furniture, farm stock, etc.; the expressed consideration being $12,000. The evidence showed that the land was worth only $5,000 or $6,000, and that it was incumbered by a deed of trust for $2,500. The husband and wife testified that on their marriage in 1865, 15 years before the conveyance was made, the wife had $3,000 in money, and also land which she then sold for $2,000; that the husband borrowed this money; and that he made the conveyance to repay her for the loan. Held that, in view of the discrepancy between the actual value of the land and the price mentioned in the deed, and of the fact that the transfer embraced all of the husband's property, as well as of the further fact that in 1865 the husband acquired title to all the wife's personalty in possession by virtue of the marriage relation, as at common law, the conveyance would be set aside.

2. On the same day that plaintiff's judgment by default was recovered against the husband, a third person, by "mutual consent," also recovered a judgment against him. A motion to set aside the default in plaintiff's case was made in behalf of the husband, and matters were so managed that the "consent" judgment obtained a priority over plaintiff's. Held, that the wife's purchase of the land for $145 at the execution sale under the "consent" judgment was in furtherance of and tainted with the original fraud.

3. In equity, payment of a debt by a surety does not extinguish it, but operates as an assignment to the surety, with all the creditor's rights.

4. One to whom a judgment has been assigned for the benefit of himself and another may sue thereon in his own name.

5. In equity cases, the supreme court is not concluded by the chancellor's findings of fact; and remarks in former cases that the supreme court will defer somewhat to his findings, where the witnesses testify orally, apply only where the testimony is conflicting or evenly balanced, and the finding of the chancellor appears to be correct.

BARCLAY, J., dissenting.

Appeal from St. Louis circuit court; W. W. EDWARDS, Judge.

Action by William Benne against Mary Schnecko and others, to set aside two conveyances alleged to be fraudulent. The petition alleges that on the 17th of September, 1879, the defendant Richard C. Schnecko as principal, and Herman Benne and William Benne as securities, executed their promissory note for $700 to Jacob Bittner, payable one year after date; that the security William Benne died in 1881, and the other security, Herman Benne, is his administrator; that Bittner had his note allowed against the estate of the deceased security, and also sued Schnecko and the other security in the circuit court upon the note, and obtained judgment against them, November 19, 1883, for $821.35, which was a lien on all Schnecko's real estate in St. Louis county; that Schnecko, at the time of the execution of the note, was the owner of a tract of about 33 acres of land in said county, which he and his wife, by a deed made on the 23d day of August, 1881, conveyed to the defendant Koeser in trust for her; and that said conveyance was without any valuable consideration, and was made and accepted to hinder, delay, and defraud Schnecko's creditors. The petition further alleges that one Holthaus obtained a judgment against Schnecko for $114.60 on the same day that Bittner's judgment was obtained; and Schnecko and his wife, contriving further to hinder, delay, and defraud Bittner, prevented the issue of an execution upon his judgment by a motion to set the judgment aside, and while the motion was pending caused an execution to be issued on the Holthaus judgment, and the said real estate to be sold at execution sale to Mrs. Schnecko for $145, while Schnecko's title was under the cloud of the former fraudulent deed; and by reason thereof she was enabled to purchase said real estate at much less than its full value, and to place the same still further beyond the reach of Schnecko's creditors; and that said purchase, although in her name, was in fact made for Schnecko, and with his means. The petition further alleges that thereafter the security Herman Benne, for himself and as administrator of the deceased security, was compelled to pay to Bittner the amount of the judgment, and at the time of paying the same he caused the judgment to be assigned to the plaintiff in this suit, in trust for him individually and as such administrator, for the purpose of retaining the lien of the same against the said real estate. The answer denies the allegations of fraud, and alleges that Mrs. Schnecko purchased at the sheriff's sale with her own means, "to buy her peace." At the trial the plaintiff proved the execution of the note by Schnecko with the Bennes as securities, the payment of the judgment on the same to Bittner by Herman Benne, for himself and as administrator of William Benne, and the assignment of the judgment by Bittner to plaintiff, to keep the judgment alive and retain the lien, for the protection of the securities. Plaintiff then offered documentary and record evidence, as follows: The note; the allowance of the same against William Benne's estate; the judgment on the same against Schnecko and Herman Benne, November 19, 1883; the motion to set aside default and judgment, filed November 23d; order overruling the same; the assignment of the judgment, and allowance to plaintiff; the assignee's acknowledgment of the trust; the deed by which Schnecko acquired the property in controversy, February 26, 1879; and the deed (alleged to be fraudulent) by which he and his wife conveyed the same to her trustee. The consideration expressed in this deed was $12,000, and it conveyed, besides the land here in controversy, all the personal property of the said Richard C. Schnecko, whatsoever, consisting of horses, mules, cows, hogs, wagons, plows, farming implements, and farm machinery, 50 tons of hay, and all the household and kitchen furniture contained in the house occupied by him. The evidence showed that the land was worth $5,000 to $6,000. This was not disputed. Plaintiff then offered the judgment of Holthaus against Schnecko, with an order staying execution for 60 days, November 19, 1883; an order setting aside the stay of execution, December 7, 1883; an execution issued on said judgment; and sheriff's deed under the same to Mrs. Schnecko for $145.

Mr. Broadhead, the attorney for Holthaus, testified that Mr. Taylor, representing Schnecko, requested that the stay of execution be set aside, and an execution issued at once, and the stay of execution was set aside by consent; that Mr. Taylor bid for the property at the execution sale, and bought it in the name of Mrs. Schnecko; and she was not present, but Schnecko was. Mr. Garrett, the deputy-sheriff at the sale, testified that Mr. Taylor was there representing Schnecko, and purchased the property for Mrs. Schnecko; that Schnecko was present, but his wife was not; and that Taylor and Schnecko instructed him not to set aside homestead. Defendant Schnecko, on behalf of plaintiff, testified that the deed in question conveyed to his wife all the property he owned. J. W. McElhinney, attorney for plaintiff in this case, testified that on the "law-day," when the motion to set aside default in the case of Bittner v....