Coleman v. Alderman

• Decision Date: 12 April 1948
• Docket Number: 40390
• Citation: 210 S.W.2d 994,357 Mo. 758
• Parties: Roy Coleman, Appellant, v. Anna A. Alderman and Mason C. Alderman
• Court: Missouri Supreme Court

210 S.W.2d 994

357 Mo. 758

Roy Coleman, Appellant, v. Anna A. Alderman and Mason C. Alderman

No. 40390

Supreme Court of Missouri

April 12, 1948

Rehearing Denied May 10, 1948.

Appeal from Jackson Circuit Court; Hon. Emory H. Wright Judge.

Affirmed.

Claude L. Schenck for appellant.

(1) The court erred in sustaining defendant's motion to dismiss plaintiff's petition when the evidence affirmatively disclosed that the defendant, Mason C. Alderman, enhanced and enriched the value of the property held in the name of his wife. George v. Surkamp, 76 S.W.2d 368; Kirby v Bruns, 45 Mo. 234; Wolfsberger v. Mort, 78 S.W. 817; Gray v. McCormick, 23 S.E.2d 803; Secs. 3506-07, R.S. 1939; Bishop on Prior Equities (4th Ed.), p. 312. (2) The court erred in failing to view the transactions between Mason C. Alderman and Anna A. Alderman, husband and wife, with suspicion. Graveman v. Huncker, 139 S.W.2d 494; Belleville Casket Co. v. Brueggeman, 182 S.W.2d 555; Green v. Wilks, 109 S.W.2d 859; Glenn on Fraudulent Conveyances and Preferences, p. 534, sec. 307. (3) The court erred in its judgment in failing to find that Mason C. Alderman was engaged in a hazardous occupation, to-wit, aborting pregnant healthy women in violation of law and in failing to find for the plaintiff that the conveyances to Anna A. Alderman were made for the purpose of defrauding Mason C. Alderman's subsequent creditors. Cole v. Cole, 132 S.W. 734; Sec. 4079, R.S. 1939. (4) A creditor's bill is an equitable proceedings by which the creditor seeks to satisfy his debt from the debtor's equitable estate which is not liable to levy and sale under execution or out of property fraudulently conveyed by the debtor. Coleman v. Hagney, 158 S.W. 829. (5) Where land is fraudulently purchased by debtor and held in the name of a third person for debtor's benefit, there arises a resulting trust for creditor's benefit. Bobb v. Woodward, 50 Mo. l.c. 101; Wolfsberger v. Mort, 78 S.W. 817. (6) Pre-existing debts raise a reasonable inference of a fraudulent intent. Lander v. Ziehr, 51 S.W. 742; 24 Am. Jur., p. 286. (7) The fact that grantor contracted large debts shortly after a voluntary conveyance is strong evidence of an actual fraudulent intent, and the same is true of the fact that he immediately thereafter engaged in an extensive or hazardous business. Lander v. Ziehr, 51 S.W. 742. (8) As against an existing creditor of her husband, a conveyance for and to her obtained with his means would be constructively fraudulent, in the absence of any satisfactory showing to the contrary. Jordan v. Bushmeyer, 10 S.W. 616. (9) A mere change of creditors while the debt continues will not cheat the statute. Lander v. Ziehr, 51 S.W. 742; Bump on Fraudulent Conveyances (4th Ed.), sec. 296. (10) A voluntary conveyance by one against whom there was a pending suit in tort is a badge of fraud and is void as to creditors. McCollum v. Crain, 74 S.W. 650.

Cowgill & Popham and Sam Mandell for respondents.

(1) Plaintiff could not prevail without proof of actual fraud and the participation of Mrs. Alderman therein. McKinney v. Hutson, 336 Mo. 867, 81 S.W.2d 951; Cole v. Cole, 231 Mo. 236, 132 S.W. 734. (2) Plaintiff's evidence did not overcome the presumption of the innocence of Dr. Alderman of the crimes charged. State ex rel. Detroit Fire & Marine Ins. Co. v. Ellison, 268 Mo. 239, 187 S.W. 23; Sec. 4079, R.S. 1939. (3) Plaintiff's action was commenced more than ten years after the deeds conveying the property to Mrs. Alderman were recorded, and his action is barred by Section 1002, R.S. 1939. Thomas v. Matthews, 51 Mo. 107; Rogers v. Brown, 61 Mo. 187; Hughes v. Littrell, 75 Mo. 573; Lackland v. Smith, 5 Mo.App. 153; Sec. 1002, R.S. 1939. (4) Prior transactions, if any, between Dr. Alderman and his wife will not be viewed with suspicion in the suit of subsequent creditors. 27 C.J., Fraudulent Conveyances, p. 521, sec. 198; Same, p. 567, sec. 279.

OPINION

Douglas, P.J.

This is an action to set aside a conveyance of real estate for fraud of creditors. It differs from the usual action of this character in that plaintiff did not become a creditor until some six years subsequent to the conveyance of the real estate, instead of being a creditor at the time the land was transferred.

The first question presented here is whether plaintiff made a prima facie case of fraud as the trial court dismissed plaintiff's petition with prejudice at the close of plaintiff's case.

Stronger evidence of fraud is required in a case brought by a subsequent creditor because ordinarily a person is free to dispose of his property as he sees fit if he is not indebted at the time. Therefore, a subsequent creditor must prove actual fraud in the conveyance rather than mere constructive fraud which is usually held to be sufficient in the case of an existing creditor. Payne v. Stanton, 59 Mo. 158; Fisher v. Lewis, 69 Mo. 629; Snyder v. Free, 114 Mo. 360, 21 S.W. 847; Lander v. Ziehr, 150 Mo. 403, 51 S.W. 742; Cole v. Cole, 231 Mo. 236, 132 S.W. 734; Coleman v. Hagey, 252 Mo. 102, 158 S.W. 829; Clapp v. Kenley, 277 Mo. 380, 210 S.W. 10; May v. Gibler, 319 Mo. 672, 4 S.W.2d 769; Stierlin v. Teschemacher, 333 Mo. 1208, 64 S.W.2d 647.

There is a second question presented on the statute of limitations. We will consider this question first because if the statute has run, the question whether or not plaintiff proved fraud is not controlling.

Plaintiff recovered judgment on June 16, 1939 for $ 5,000 against defendant Dr. Mason C. Alderman for the death of his wife which he alleged was caused by a criminal abortion performed upon her by Dr. Alderman. In the present action plaintiff seeks to set aside for fraud two deeds conveying residence lots in Clay County to Mrs. Alderman, wife of the doctor. The deeds were from third parties but plaintiff alleges Dr. Alderman, the judgment debtor, caused the grantors to convey the lots to his wife. Both deeds were dated and recorded on January 20, 1933. This suit was filed on June 19, 1943 or more than ten years after the deeds were recorded.

The section of the statute of limitations pertaining to actions for fraud does not apply to cases of this kind. Section 1014 R.S. 1939, Mo. R.S.A. provides that actions for fraud must be brought within five years from the discovery of the fraud by the aggrieved party, and that such party has ten years within which to discover the fraud. But it has been consistently ruled by this court that this section is not applicable to cases involving the title to real estate.

An action to set aside a fraudulent conveyance has been held to be governed by the section of the statute of limitations governing actions for the recovery of lands. Section 1002 R.S. 1939, Mo. R.S.A. imposes a limitation of ten years on such actions While other jurisdictions hold that an action to set aside a fraudulent conveyance is not an action for recovery of land within the purview of a statute of limitations, the contrary rule has become well fixed in this state and we adhere to and follow it. cf. Annos. 76 A.L.R. 864, 128 A.L.R. 1289.

The earliest case on this point we find in this state is Rogers v. Brown, 61 Mo. 187 which was an action to set aside a conveyance for fraud of creditors. The facts show the conveyance was recorded on October 26, 1857. The creditors obtained judgments on their debts subsequent thereto on March 12, 1862. They filed their action to...