Cogin v. Herman

• Decision Date: 16 February 1918
• Docket Number: No. 18842.,18842.
• Citation: 202 S.W. 552
• Parties: COGIN v. HERMAN et al.
• Court: Missouri Supreme Court

202 S.W. 552

COGIN v. HERMAN et al.

No. 18842.

Supreme Court of Missouri, Division No. 2.

February 16, 1918.

Rehearing Denied April 9, 1918.

Appeal from Circuit Court, Jackson County; W. O. Thomas, Judge.

Action by Mary Cogin against Simon Herman and another. Judgment for defendants, and plaintiff appeals. Affirmed.

O. J. Chapman, John J. Hyde and C. R. Leslie, all of Kansas City for appellant.. Chas. M. Bush and R. W. Crimm, both of Kansas City, for respondent Herman.

WHITE, C.

The plaintiff, as judgment creditor of the defendant Leo Rice, brought this suit to set aside two warranty deeds, alleged to be fraudulent, whereby the defendant Leo Rice had conveyed certain property in Jackson county to the defendant Simon Herman. The judgment was for the defendants, and the plaintiff appeals.

In July, 1912, while several suits were pending against the defendant Rice, among them the suit of plaintiff for breach of promise of marriage, in which she afterwards obtained judgment, Rice executed the two deeds. The first was dated July 1, 1912, acknowledged July 6, 1912, recorded on the latter date, and conveyed several pieces of real estate for a recited consideration of $16,296. The second deed, dated and acknowledged on the same day, but recorded about an hour later, conveyed a single tract of land for a recited consideration of $4,500. Herman explained this transaction by saying that the consideration, $16,296, mentioned in the first deed, was the amount of debts which Rice owed him, and that he took the property in settlement of the debts. He found out that Rice was being sued for damages by various parties, who likely would get judgments against him, and he went to Rice and demanded his money, which Rice could not pay, but conveyed him his property in settlement. After the first deed was executed he found out that one piece of property which

Rice owned had been omitted, and he demanded a conveyance of it, whereupon Rice made him another deed covering that tract. The consideration in the second deed was an arbitrary sum; there was no additional amount nor other consideration paid; but it was included as a part of the indebtedness mentioned in the first deed. Herman claimed the entire property covered by both deeds was worth no more than the consideration mentioned in the first.

The plaintiff in attacking these conveyances sought to show that Herman could not have loaned Rice the money which Herman claimed was due him as a consideration for the deeds. The deposition of defendant Rice was offered by the plaintiff, and the defendant Herman was sworn as plaintiff's witness.

A number of officials of banks in Kansas City were offered with their records to show the accounts and the relative standing of the two defendants for several years prior to the transaction under consideration. It appears that Herman's deposition previously had been taken in the case, and it was used in examining him by the plaintiff. It developed that at the time the deeds were made Herman held several notes of Rice, each of which drew 6 per cent. per annum, and was payable on demand as follows:

                January 12, 1909 ............ $  500 00
                February 1, 1909 ............    600 00
                March 20, 1909 ..............    500 00
                May 21, 1909 ................  1,300 00
                August 28, 1909 .............  2,000 00
                January 31, 1910 ............    900 00
                March 9, 1910 ...............    150 00
                October 8, 1910 .............    600 00
                October 17, 1910 ............  1,000 00
                December 14, 1910 ...........    600 00
                July 20, 1911 ...............  1,500 00
                January 9, 1912 .............    750 00
                January 27, 1912 ............    600 00
                April 16, 1912 ..............  3,000 00
                April 18, 1912 ..............  1,000 00
                

These notes, totaling $15,000, amounted, with interest, to $15,296 at the time the deeds were made. Across the face of each of the notes was written: "Paid. S. H." Herman testified that these notes were surrendered by him and delivered to Rice at the time the deeds were made. To show that he really loaned Rice the money represented by each of the notes, checks were introduced by Herman, a check bearing the date of each note, indorsed by Rice, with the stamp "Paid" by the bank on which it was drawn. Each check also had passed through the Kansas City Clearing House, as shown by the stamp upon its back. It was not questioned by plaintiff that the money really was paid by Herman to Rice of the amount and date of each note, as indicated by the checks. In fact, that matter hardly could be questioned, because the indorsement of Rice, no other Indorsement appearing on the checks, and the stamp of the bank on each check showed that Rice in each case had got the money. The claim of the plaintiff is that these checks had been given for some other purpose, were dug up among Herman's canceled checks after the above-mentioned suits were brought, when Herman and Rice conceived the plan to defeat any beneficial result in the suits, manufactured the notes, and gave them dates to correspond with the checks.

That Herman was amply able to loan the money to Rice is apparent from the bank records and passbooks which were used in evidence. Herman came to Kansas City, it is said, in 1889. He was a tailor by trade. After working a number of years for weekly wages, in 1904 he commenced business for himself as a tailor on money which he had saved. His business, apparently, was prosperous from the start. He testified without contradiction that when he first started in business he employed four or five men, and by 1910 he had six or seven men employed in his shop besides about 25 men outside doing his work. In 1912 his business amounted to $40,000 or $50,000 for the year. He lived inexpensively, never went in debt, discounted all his bills for goods, and had money to loan. His bank passbooks extending over a period from 1907 up to the time the deeds were made, covering all the different times when the loans to Rice were said to have been made, show large balances ranging from a few hundred dollars up to $4,000 or $5,000.

Bank records were introduced showing the condition of Rice's bank account at different times for the years 1908. 1909, and 1910. These statements of his deposits and daily and monthly balances show much smaller sums than shown by the statements of Herman. Occasionally his account would run up to above $1,000, but usually it was much below that sum. It was shown also that Rice was a persistent borrower. He was a cattle dealer, and plaintiff introduced the records of one bank showing in the neighborhood of a dozen loans made by it to Rice in 1 he years 1912 and 1913, ranging from $150 up to $2,500.

Stress is placed upon the fact that Rice was unable to account for some of the money he received. With some derision appellant's counsel says he carried large sums of money around in his pocket, and seeks in this way to discredit any showing that he got the money. From the bank records it does in fact look as if Rice carried large sums around in his pocket. On two different occasions he borrowed $2,500 from the German National Bank, about which there is no dispute, but his own bank account shows no corresponding increase at or near the same dates. On one or two occasions when he got money from Herman, Rice's bank account showed a corresponding increase, but on other occasions it showed no increase whatever. The checks above mentioned show that he cashed them within a day or two of their dates, in each instance, and got the money. They bear no individual indorsement except his own, and he could not, therefore, have transferred them to any one else. So he must have carried the money around in his pocket or must have kept it somewhere else besides depositing it. It was said by Herman that Rice was gambling and used up his money in that way, and circumstances of the above character corroborate that statement.

Herman was a brother-in-law of Rice, having married his sister in 1895. Their relations seem to have been very confidential, and Herman explained that he took no...