Cook v. Mason

• Decision Date: 05 March 1945
• Docket Number: 39236
• Citation: 185 S.W.2d 793,353 Mo. 993
• Parties: Belle Cook v. B. A. Mason et al., Fred L. Taylor, Appellants
• Court: Missouri Supreme Court

185 S.W.2d 793

353 Mo. 993

Belle Cook v. B. A. Mason et al., Fred L. Taylor, Appellants

No. 39236

Supreme Court of Missouri

March 5, 1945

Appeal from St. Clair Circuit Court; Hon. Dewey P. Thatch Judge.

Affirmed.

Waldo P. Johnson and Lee E. Cook for appellants.

(1) A court of equity will not set aside a conveyance made to prevent or obstruct the collection of an anticipated judgment. Derry v. Fielder, 216 Mo. 176; Leeper v. Kurth, 163 S.W.2d 1031; Stierlin v Teschemacher, 64 S.W.2d 647, 333 Mo. 1208; Chambers v. Chambers, 227 Mo. 262; 30 C.J.S. 484, sec. 95. (2) The conveyance to be in fraud of creditors need not prevent or obstruct the collection of an actual liability. It is sufficient if made with the intent to prevent collection of a liability or an anticipated liability. Jones v Jefferson, 66 S.W.2d 555, 334 Mo. 606; Creamer v. Bivert, 214 Mo. 473; Keener v. Williams, 307 Mo. 682, 271 S.W. 489.

John M. Belisle and Ralph P. Johnson for respondent.

(1) Before a conveyance can be in fraud of creditors there must be some cause of action against or liability on the part of the grantor. 15 C.J., p. 1371, sec. 1. (2) The clean hands doctrine does not apply in this case since there were no creditors of, nor cause of action against, nor liability of respondent at the time the conveyance was made. Cook v. Cook, 124 S.W.2d 675, 232 Mo.App. 994; Bovard v. Bovard, 180 S.W.2d 592; Stephenson v. Stephenson, 171 S.W.2d 565, 351 Mo. 8. (3) In equity and good conscience the deed should be set aside. Janssen v. Christian, 57 S.W.2d 692; Thierry v. Thierry, 249 S.W. 947, 298 Mo. 25; Bovard v. Bovard, 180 S.W.2d 592; Stephenson v. Stephenson, 171 S.W.2d 565, 351 Mo. 8.

OPINION

Douglas, J.

This is a suit in equity to set aside plaintiff's voluntary conveyance of land and to vest title to the land in plaintiff.

Belle Cook, plaintiff, had adopted a daughter, Virginia. She claimed Virginia, aged fifteen years, was disobedient so she whipped her. Virginia claimed the whipping was a willful and malicious assault. The rumor spread over the town of Collins where Belle lived that Virginia was going to sue Belle for damages because of the assault. It reached Belle's ears and her brothers' ears. So Belle and her two brothers, defendant Ben A. Mason and Bill Mason, now deceased, drove to the abstracter's office in Osceola, the county seat, where a deed was prepared conveying the land to Ben and Bill Mason. Belle signed the deed and directed the abstracter to record it. She received no consideration. She retained possession of the land, collected the rents, paid the taxes and expenses. The purpose of making the deed was "to protect herself", "to keep down the suit", "to keep down trouble" in face of the threatened suit for damages. "She wanted them [the grantees] to deed the place back to her when this was settled."

Several days after the deed was made Virginia sued Belle for one thousand dollars actual and one thousand dollars punitive damages. She recovered judgment for one thousand dollars actual damages which was cut to six hundred dollars by the trial court. Belle appealed to the Springfield Court of Appeals which reversed the judgment on the ground Virginia never had a cause of action against Belle because of the doctrine an unemancipated minor child has no right of action in tort against a parent or a person standing in the place of a parent. Cook v. Cook, 232 Mo.App. 994, 124 S.W.2d 675.

Belle's brother Bill Mason died and later his widow died. Belle brought this suit against defendant, Fred L. Taylor, who holds an undivided one-half interest by conveyances from the heirs of Bill's widow, and against her brother Ben who holds the other one-half interest. The trial court found for Belle, ordered the deed to her brothers cancelled and the title to the land vested in her. Defendant Taylor has appealed.

The question for decision is whether Belle's conveyance to her brothers was fraudulent even though the threatened suit for damages was based on a claim not authorized by law, so that she is now precluded from seeking the aid of a court of equity to set aside the conveyance.

Courts of equity are chary of reaching out a helping hand to those litigants who voluntarily convey their land in order to hinder, delay and defraud creditors. Chambers v. Chambers, 227 Mo. 262, 127 S.W. 86. The rule is well established that a court of equity will not set aside a conveyance made in fraud of creditors. Jones v. Jefferson, 334 Mo. 606, 66 S.W.2d 555; Leeper v. Kurth, 349 Mo. 938, 163 S.W.2d 1031. When a party makes a conveyance for the purpose of hindering or defrauding a creditor, equity will ordinarily leave him where it finds him. Keener v. Williams, 307 Mo. 682, 271 S.W. 489. This rule has been applied where a conveyance is made in anticipation of a suit for damages. Creamer v. Bivert, 214 Mo. 473, 113 S.W. 1118; Jones v. Jefferson, 334 Mo. 606, 66 S.W.2d 555; George v. Surkamp, 336 Mo. 1, 76 S.W.2d 368.

"Persons having a right to sue for damages for tort are generally regarded as within the protection afforded by statutes relating to fraudulent conveyances, and entitled, when the claim has been reduced to a judgment, to maintain a suit to have such a conveyance set aside, where made after the cause of action arose." Anno. 39 A.L.R. 179.

Our statute affords such protection. It voids conveyances made with intent to hinder or defraud "creditors of their lawful actions, damages, forfeitures, debts or demands." Sec. 3505, R.S. 1939, Mo. R.S.A. It has been held in this state that for the purposes of relief under this statute a person who has been assaulted became a creditor at the time the assault conferred on him "a valid demand for damages" against his assailant. Carrel v. Meek, 155 Mo.App. 337, 137 S.W. 19. An early English case ruled such a statute extended to all who have "a cause of action." Twyne's case (1601), 3 Coke 82, 76 Eng. Reprint, 815.

It must be noted that the general rule above quoted refers to persons having a lawful right to sue; our statute to creditors with lawful actions; the decision in Carrel v. Meek to a person having a valid demand for damages; and in Twyne's case to all...