Bostian v. Bono

• Decision Date: 13 April 1959
• Docket Number: No. 1,No. 46914,46914,1
• Citation: 322 S.W.2d 813
• Parties: William B. BOSTIAN, as Trustee in Bankruptcy for Josephine C. Bono, Respondent, v. Josephine C. BONO, Louis N. Bono and Virginia M. Bono, Appellants
• Court: Missouri Supreme Court

Page 813

322 S.W.2d 813

William B. BOSTIAN, as Trustee in Bankruptcy for Josephine C. Bono, Respondent, v. Josephine C. BONO, Louis N. Bono and Virginia M. Bono, Appellants.

No. 46914.

Supreme Court of Missouri, Division No. 1.

April 13, 1959.

Joseph N. Miniace, Louis J. Pelofsky, Kansas City, for appellants.

Nelson E. Johnson, Kansas City, for respondent.

HYDE, Presiding Judge.

Action by a judgment creditor to set aside a deed to real estate in Kansas City as a fraudulent conveyance. After defendant Josephine C. Bono (hereinafter called Mrs. Bono) was adjudged a bankrupt, her trustee in bankruptcy was substituted as plaintiff, under the provisions of Sec. 110, Title 11, U.S.C.A. The Court entered a decree, declaring the deed void and vesting title in the trustee, from which defendants have appealed.

In 1946, Mrs. Bono, a widow, mortgaged her home to borrow $5,000 to buy a tavern business with Fred Naccarato. The business was not profitable and she became indebted with her partner to Howard Middleton for rental of refrigerating equipment, for which indebtedness Middleton filed suit June 13, 1947; and upon which Middleton obtained judgment against Naccarato and Mrs. Bono, on December 12, 1952, for $2,954.95. Mrs. Bono filed a petition in bankruptcy and was adjudged a bankrupt on April 23, 1954; but while the Middleton suit was pending, on January 17, 1951, Mrs Bono made a deed to her home to her son Louis Bono and his wife. The consideration stated in this deed was 'one dollar and other valuable considerations,' and there were no revenue stamps on the deed. Mrs. Bono and Louis testified about this transaction both in depositions (admissions from which were put in evidence) and at the trial. Their account was that Mrs. Bono was unable to continue the monthly payments on the mortgage (none had been missed up to that time), the tavern business having failed and monthly amounts paid her by the Veterans Administration having been reduced from $60 to $42. Mrs. Bono also owed Louis $750 borrowed at the time she went into the tavern business. Louis knew there was litigation with Middleton at the time the deed was made but did not know the exact nature of it. Mrs. Bono had employed a lawyer who had filed a pleading in the case in 1947; and the case was tried after the deed herein involved was made.

Both Mrs. Bono and Louis said no money was paid for the deed but that he agreed to furnish the money to make the monthly payments on the mortgage and that she was to live in the house without payment of rent but was to pay the taxes. There was no recital in the deed of assumption of the mortgage debt but it was paid off by the end of $1956 and Mrs. Bono had paid all taxes. Mrs. Bono said they did not go into the matter of the $750 she owed Louis or its cancellation. Louis said: 'I figured * * * the monthly payments as a loan'; and also said: 'I just would forget the $750.00 she owed me previously if she would deed the house to me, and I would continue the monthly payments.' Plaintiff's evidence was that the fair market value of the property was $14,500, in 1951, when the deed was made. The amount then due on the mortgage was $3,136.62. Defendants offered no evidence as to value. In 1954, Mrs. Bono had obtained judgment for $3,400 against the parties to whom the tavern had been sold in 1948, apparently for the balance due on a note given for the purchase price but had collected nothing on it.

Defendants' answer admitted the allegations of the petition concerning the judgment against her, the ownership of the real estate and the relationship of the parties and denied all other allegations but asked no affirmative relief of any kind. The Court made the following findings about the transaction in its decree: 'that on the 17th day of January, 1951, the said Josephine C. Bono, with the intent to hinder, delay and defraud her creditors, attempted * * * to convey Lot 266 Kingston, an addition to Kansas City, Missouri, by a warranty deed, to Louis N. Bono and Virginia M. Bono, his wife, (her son and his wife), * * * that no consideration passed from Louis N. Bono or Virginia M. Bono to Josephine C. Bono for said deed, and that said conveyance made Josephine C. Bono insolvent and was voluntary and that said Louis N. Bono at the time thereof, knew of the pendency of said suit by Howard A. Middleton against Josephine C. Bono.'

Defendants' contention on this appeal is that plaintiff's evidence failed to make a case of fraud. Defendants say the evidence failed to show Mrs. Bono was insolvent at the time of the transaction because of her claim against the purchasers of the tavern. However the testimony of Mrs. Bono and her son was to the effect that she had no other property at that time, was unable to make the payments on the mortgage, and was living on the Veterans Administration payments. Mrs. Bono said that the purchaser 'was to pay me $150.00 a month. He just paid a few months. Then he closed down.' She thereafter filed suit but it is not shown that she collected anything more prior to obtaining judgment and there is no evidence that her claim was then collectible or ever has been since. It also appears that nothing was collected on the judgment prior to the trial herein in December, 1957. We must therefore hold that the evidence shows the finding of the Court, that her conveyance to her son in 1951 made Mrs. Bono insolvent, was correct.

'A voluntary conveyance is fraudulent in law and void against existing creditors regardless of intent, if it includes so much of the debtor's property that it leaves him without the means to pay his debts to them.' Friedel v. Bailey, 329 Mo. 22, 44...