Cole v. Cole

• Decision Date: 30 November 1910
• Citation: 231 Mo. 236,132 S.W. 734
• Parties: COLE v. COLE et al.
• Court: Missouri Supreme Court

132 S.W. 734

231 Mo. 236

COLE v. COLE et al.

Supreme Court of Missouri, Division No. 1.

November 30, 1910.

1. FRAUDULENT CONVEYANCES (§ 8)—TRANSFERS — INSOLVENCY OF GRANTOR — PRIOR CREDITORS.

A conveyance by which the grantor puts all property subject to legal process out of his hands, with intent to hinder and delay his existing creditors, is fraudulent as to them.

2. HUSBAND AND WIFE (§ 36)—DISABILITIES OF COVERTURE — CONTRACTS—WIFE'S CONTRACTS WITH HUSBAND.

Under the married women's enabling acts, a wife may contract freely with her husband.

3. FRAUDULENT CONVEYANCES (§ 118) — TRANSFERS—TRANSACTIONS BETWEEN HUSBAND AND WIFE.

If a wife be a bona fide creditor, of her husband, the debt to her stands on as sure a

footing as that to any one else, and he may prefer her, and although such preference will hinder and delay other creditors, it is valid, providing the wife is not a party to the fraudulent intent of the husband.

4. FRAUDULENT CONVEYANCES (§ 118)— TRANSFERS—TRANSACTIONS BETWEEN HUSBAND AND WIFE — PREFERENCE — PRESUMPTION.

A preference of a wife by an insolvent debtor, which hinders and delays other creditors will be closely scrutinized, for the marital relation affords a convenient cover for fraudulent transfers.

5. FRAUDULENT CONVEYANCES (§ 300)—REMEDY OF CREDITORS—EVIDENCE—WEIGHT AND SUFFICIENCY—CONSIDERATION.

In an action to set aside a conveyance by a husband to his wife, as in fraud of his creditors, evidence of the consideration held to be inconclusive.

6. FRAUDULENT CONVEYANCES (§ 95)—TRANSFERS BY HUSBAND TO WIFE—CONSIDERATION—CORROBORATION.

Where a transfer of property by a husband to his wife is attacked by creditors as fraudulent, and the parties claim that it is in payment of a just debt, the court will look for corroborative proof, or, failing that, for those badges of good faith arising from specification in details, date, amount, etc., of the debt.

7. FRAUDULENT CONVEYANCES (§ 87)—CONSIDERATION — VALUE OF PROPERTY CONVEYED.

Where an honest conveyance is made to pay a debt, there is generally a correspondence in value between the property and the debt, and an excess in value of the property over the amount of the debt is a badge of fraud.

8. FRAUDULENT CONVEYANCES (§ 299)—EVIDENCE—WEIGHT AND SUFFICIENCY—KNOWLEDGE AND INTENT OF GRANTEE—CREDITORS.

In an action to set aside a conveyance of property by a husband to his wife as fraudulent to creditors, evidence held to show that such a conveyance was received by her with intent to defraud both existing and subsequent creditors.

9. FRAUDULENT CONVEYANCES (§ 298)—EVIDENCE—INTENT OF GRANTEE—CIRCUMSTANTIAL EVIDENCE.

In the case of a fraudulent conveyance, intent to defraud may be deduced from circumstances, for, in the very nature of things, it is not susceptible of direct proof.

10. FRAUDULENT CONVEYANCES (§ 208)—VALIDITY OF TRANSACTION—ACTUAL FRAUD OF GRANTOR AND GRANTEE—PRIOR AND SUBSEQUENT CREDITORS—STATUTE.

Under the direct provisions of Rev. St. 1899, § 3398 (Ann. St. 1906, p. 1905) now, Rev. St. 1909, § 2881, actual fraud on the part of the grantor and grantee will vitiate a conveyance as to subsequent as well as to existing creditors.

11. FRAUDULENT CONVEYANCES (§ 208)—VALIDITY OF TRANSACTION — INTENT TO REMAIN IN BUSINESS—SUBSEQUENT CREDITORS.

Where property is conveyed by a husband to his wife, with the intent on the part of both that he shall continue in business, and that the conveyance shall screen the property from any debts that he may incur, it is void as to his subsequent creditors.

Appeal from Circuit Court, St. Francois County; Chas. A. Killian, Judge.

Action to quiet title by Sarah E. Cole against Charles E. Cole and Alpha Cole. From a judgment for plaintiff, defendants appeal. Reversed and remanded, with directions.

Edw. A. Rozier, for appellants. Pipkin & Swink, for respondent.

LAMM, P. J.

Alpha is the sister and Sarah the wife of Samuel I. Cole. Charles is his brother. Averring she has title as owner in fee of an undivided one-sixth of the S. ½ N. E. ¼, the S. E. ¼ N. W. ¼, the E. ½ S. W. ¼, the W. ½ S. E. ¼, all in section 16, and the N. ½ N. ½ N. W. ¼ of section 21, all in township 37, R. 4, containing 320 acres, in St. Francois county, Sarah sues Alpha and Charles to quiet title under section 650, Rev. St. 1899 (Ann. St. 1906, p. 667), now section 2535, Rev. St. 1909, as amended, alleging that the remaining undivided five-sixth interest is not in dispute, that she has no interest therein, that defendants claim adversely to her said estate in said undivided one-sixth, she prays the court to ascertain and determine her title and that of defendants, respectively, therein. Alpha answers separately. Her first defense is a misjoinder of parties defendant, in that Robert I. and Addie F. Cole are necessary parties as owners of an undivided, fee simple interest in the real estate, they being in joint possession and enjoying rents and income with Alpha and her codefendant, Charles; that no judgment can be entered determining the interest of plaintiff that will not affect theirs in each and every undivided portion thereof; that Robert and Addie acquired their interest by a deed, dated May 12, 1897, recorded in a certain named book and page of the land records of St. Francois. Her further answer, by way of affirmative matter and second defense, is that plaintiff claims under a conveyance from defendant, Charles; that such conveyance was a covinous contrivance, a part of a fraudulent scheme concocted by plaintiff and her husband, intended to hinder, delay, and defraud his existing and subsequent creditors; that he was insolvent on the 10th of January, 1895, prior thereto and ever since that time, owing sundry specified debts, and owning no other property, except his then interest in the said land, descended to him by inherittance from his deceased mother, Mary; that, being such owner and so indebted, he conspired and confederated with his wife with the intent aforesaid; that in pursuance and furtherance of such conspiracy, they persuaded Charles to join therein, as the conduit through which the husband's said title should pass to plaintiff, thereby putting it out of the reach of present or subsequent creditors on legal process to collect debts then existing or thereafter contracted; that on the 10th of January, 1895, in view of the scheme so concocted, Samuel and plaintiff, without consideration and fraudulently, conveyed to Charles, with the understanding then had that he would hold the property for the benefit of Samuel, and at some convenient, future season, in pursuance of the fraud so contrived, would convey to plaintiff. Charles was persuaded, by the solicitations and entreaties of grantors in said deed, to accept such conveyance to him for the fraudulent purpose named, and afterwards he, to further consummate such purpose, purchased the entire title to the land at a sheriff's sale, made in partition between the heirs of said Mary Cole, and presently executed and delivered a deed of date of May 12, 1897, purporting to convey to plaintiff an undivided one-sixth, which deed was voluntary, without consideration, fraudulent, and made for the sole purpose of furthering the fraud by placing Samuel's title in his wife, with the intent thereby to hinder, delay, and defraud his existing and subsequent creditors; that plaintiff was fully cognizant of the fraud as a party to the conspiracy, well knowing that her husband was insolvent and owned no other property; and that afterwards defendant Alpha became the owner of Samuel's said interest through a sheriff's deed under an execution levied thereon, which deed was executed on August 11, 1903, and put of record. Wherefore, she prays said several fraudulent conveyances be declared void and of no account, and that Samuel's title be determined to have passed to her through her sheriff's deed. For a third defense Alpha pleads substantially the same facts elaborated in her second defense, and avers the deeds from Samuel and plaintiff to Charles, and from Charles to plaintiff, purporting to convey Samuel's interest, were fraudulent contrivances intended to hinder and delay present and subsequent creditors, and were executed and spread of record to that end, are a cloud upon the title and interest of Alpha, so acquired through her sheriff's deed, and should be canceled and annulled to remove it. For such, and all other meet and proper relief, she prays, averring that Sarah has no title or interest whatever. The separate answer of Charles pleads the same misjoinder of parties defendant and in interest, set up in Alpha's answer, denies plaintiff has any legal or equitable right in the land, and asserts that the disputed interest is the property of his codefendant, Alpha. A conventional reply was filed.

The case made is this: Plaintiff, given the opening and close over objection made and exception saved, introduced a warranty deed, dated May 12, 1897, from Charles E. Cole and wife to Alpha, Sarah E. (wife of Samuel), Robert J., and Addie F. Cole, consideration $1,500, conveying to them an undivided two-thirds interest in the land described in the petition, share and share alike, subject to a deed of trust, dated four days prior, securing $1,925 to one McCormack, and rested. Thereupon defendants asked an instruction, viz., that a defect of parties defendant appearing, the case must abate until they (Robert I. and Addie F. Cole) are brought in. On its refusal, defendants introduced deeds, judgments, and oral testimony to establish the issues on their behalf as follows: A sheriff's deed, dated August 11, 1903, conveying to Alpha Cole all the right, title, interest, and estate of Samuel I. Cole in the land described. It narrates, inter alia, that on September 18, 1901, a transcript judgment was filed in the circuit court of St. Francois in favor of the St. Francois County Bank against Samuel and others for the sum of $184.53 and $21.52 damages, upon which execution was...