Benne v. Schnecko

CourtUnited States State Supreme Court of Missouri
Writing for the CourtSherwood, J.
Citation13 S.W. 82,100 Mo. 250
PartiesBenne, Appellant, v. Schnecko et al
Decision Date24 February 1890

13 S.W. 82

100 Mo. 250

Benne, Appellant,

Schnecko et al

Supreme Court of Missouri

February 24, 1890

Appeal from St. Louis County Circuit Court. -- Hon. W. W. Edwards, Judge.

Reversed and remanded.

J. W. McElhinney for appellant.

(1) The deed to Mrs. Schnecko's trustee was fraudulent, because there was actual fraud. Bump on Fraud. Conv., pp. 31, 56, 306, 311; Besson v. Eveland, 26 N.J.Eq. 468; Humes v. Scruggs, 94 U.S. 22. Under pretense of paying a debt, the law will not permit a debtor to assign more property than is reasonably sufficient for that purpose, to the prejudice of creditors. Kuykendall v. McDonald, 15 Mo. 416, 420; Potter v. McDowell, 31 Mo. 62, 75; McVeagh v. Baxter, 82 Mo. 518; Robinson v. Stewart, 10 N.Y. 189, 195. And such a conveyance, when the grantor is indebted, is evidence of an intention to defraud. Butler v. Stoddard, 7 Paige, 163, 165; Bullett v. Worthington, 3 Md. Ch. 99. (2) But if there were no intentions to defraud the conveyance was voluntary and void as against an existing creditor. Terry v. Wilson, 63 Mo. 493; Bump, 307, 311. It cannot be presumed that the money obtained from the lots sold in Memphis was the wife's separate estate. Sloan v. Terry, 78 Mo. 623; Tillman v. Tillman, 50 Mo. 40. Voluntary transfers as against existing debts are constructively fraudulent whether fraud was intended or not. Potter v. McDowell, 31 Mo. 62, 69; Lionberger v. Baker, 88 Mo. 447, 453; White v. McPheeters, 75 Mo. 286, 294; Patten v. Casey, 57 Mo. 118; Bohannon v. Combs, 79 Mo. 305, 312. And, even if any of this money appropriated by the husband were a good consideration, the transfer would be voluntary to the extent of the excess of the property conveyed over the amount of the consideration, and to that extent void. Bump, Fraud. Conv., p. 294; Bullett v. Worthington, 3 Md. Ch. 99; Herschfeldt v. George, 6 Mich. 456; Allen v. Marchand, 78 Ky. 105. (3) The purchase at the sheriff's sale was likewise fraudulent and void. It was in furtherance of the original fraudulent scheme. Bump on Fraud. Conv., pp. 261, 263; Dallam v. Renshaw, 26 Mo. 533. The creditor has the right to proceed to set aside the fraudulent conveyance before sale under execution so that he or the purchaser may know what is sold. Bobb v. Woodward, 50 Mo. 95; Lionberger v. Baker, 88 Mo. 447; Zoll v. Soper, 75 Mo. 460; Dunnica v. McCoy, 24 Mo. 167. (4) The sureties on the payment of the judgment had a right to take an assignment to a third party as their trustee to retain the lien. Brandt on Sureties, sec. 272; Hanner v. Douglas, 4 Jones (N. C.) Eq. 262; Copas v. Middleton, 1 Turn. & Russ. 224; Fernold v. Bank, 44 Mo. 336; Berthold v. Berthold, 46 Mo. 557; Bispham's Equity, sec. 366. (5) The trustee could properly bring the suit in his own name. Rogers v. Gosnell, 51 Mo. 466; Wright v. Tinsley, 30 Mo. 389; R. S. 1879, sec. 3463. Besides defect in the parties could only be taken by demurrer, or answer. Rogers v. Tucker, 94 Mo. 346; Pike v. Martindale, 91 Mo. 268; St. Louis v. Anthony, 73 Mo. 431; Thompson v. Railroad, 80 Mo. 521.

M. F. Taylor and R. L. McLaran for respondents.

(1) Contracts or agreements between husband and wife, in regard to the disposition of the wife's property, acquired prior to the marriage, are valid, and will be upheld. Tennison v. Tennison, 46 Mo. 77; Tillman v. Est. of Tillman, 50 Mo. 40; Sloan v. Terry, 73 Mo. 626. (2) The conveyance was not fraudulent, and there was no intent to hinder or delay Bittner in the collection of his debt. Schnecko says he had arranged with Benne for the payment of this note. A court of equity will, in order to ascertain whether fraud existed, look into all the circumstances surrounding the whole transaction to see if it is consistent with fairness and honesty, and fraud will not be presumed when all the facts consist as well with honesty and fair dealing as they do with an intention to defraud. Dallam v. Renshaw, 26 Mo. 553; Rumbolds v. Parr, 51 Mo. 592; Henderson v. Henderson, 55 Mo. 555. (3) The agreement of Mrs. Schnecko to loan the money derived from the sale of the house and lot in Memphis, in 1865, to her husband, was valid, because it was a chose in action, and, therefore, the conveyance to Mrs. Schnecko was for a valuable consideration. Tennison v. Tennison, supra; Tillman v. Tillman, supra; Sloan v. Terry, supra. (4) The loan of five thousand dollars ($ 5,000) for sixteen years was a sufficient consideration for the property conveyed, and, if there had been no consideration, its conveyance was good as to subsequent creditors. Babcock v. Eckler, 24 N.Y. 626; Dygert v. Schneider, 34 N.Y. 648; Holden v. Branham, 63 Mo. 74. (5) Benne, having agreed to pay the Bittner note and then settle up with Schnecko, cannot maintain this action until such settlement is had. He is only entitled to the lien obtained by Bittner's judgment till he proves an existing indebtedness. Harrison v. Phillips, 46 Mo. 520; Berthold v. Berthold, 46 Mo. 557. (6) In an equity case, where the trial court has the witnesses personally before it, and there is sufficient evidence to sustain its finding of facts, the supreme court will not interfere and reverse such findings, unless it is shown it should have been otherwise. Erskine v. Loewenstein, 82 Mo. 301; Judy v. Bank, 81 Mo. 404; Parke v. Thompson, 81 Mo. 565; Royle v. Jones, 78 Mo. 403; Chapman v. McIlwrath, 77 Mo. 39.

Sherwood, J. Barclay, J., dissents.

OPINION [13 S.W. 83]

[100 Mo. 254] Sherwood, J.

-- This is a proceeding in equity to set aside,...

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