Davis v. A. W. Riewe Architectural Realty & Building Co.

• Citation: 145 S.W. 424
• Parties: DAVIS et al. v. A. W. RIEWE ARCHITECTURAL REALTY & BUILDING CO. et al.
• Decision Date: 21 March 1912
• Court: United States State Supreme Court of Missouri

145 S.W. 424

DAVIS et al. v. A. W. RIEWE ARCHITECTURAL REALTY & BUILDING CO. et al.

Supreme Court of Missouri, Division No. 2.

March 21, 1912.

CORPORATIONS (§ 542) — CONVEYANCE BY —CONSIDERATION—PRE-EXISTING LIABILITY.

Under Const. art. 12, § 8, which provides that no corporation shall issue stock or bonds, except for money paid, labor done, or property actually received, and all fictitious agreements as to stock or indebtedness shall be void, where a corporation and the wife of the principal stockholder agreed that in consideration of her joining in a conveyance of the homestead and other property in which she owned an inchoate dower interest, in payment for stock in the corporation, the company would return to her upon the sale of the property other property of equal value, the contract was illegal, and, as the wife was in pari delicto with her husband and the corporation in making it, she could neither enforce it against them or subsequent creditors, so that a conveyance of property to her thereunder was without consideration, and voidable at the instance of a creditor.

Appeal from St. Louis Circuit Court; G. H. Shields, Judge.

Action by Anna M. Davis and another against the A. W. Riewe Architectural Realty & Building Company and others. From a decree for defendants, plaintiffs appeal. Reversed and remanded, with direction.

This is an action to set aside a conveyance as being in fraud of creditors. It was tried in the circuit court of the city of St. Louis, resulting in a judgment for defendants, from which plaintiffs appeal.

In October, 1904, A. W. Riewe organized and incorporated the A. W. Riewe Architectural Realty & Building Company, with an ostensible capital of $50,000, of which he owned all but two shares. Riewe paid for his capital stock by the conveyance to the corporation of a lot of real estate. His wife joined in the conveyance. The testimony of Mrs. Riewe and her husband is to the effect that at the time of that conveyance she owned an interest in the homestead, which was part of the property conveyed. The title was in the husband. She had inherited about $2,000, and had made $1,000 or $1,500 by sewing and keeping boarders, all of which had gone into the property. She refused to sign the deed, unless she should have the value of her interest in the homestead, and the value of her inchoate dower interest in the other property reconveyed to her in other property whenever the homestead property should be sold by the company. In order to induce her to make that deed, the company, acting through her husband, agreed to her proposition. She and her husband and son and Mrs. Prante testified to such a contract. She with her son went soon after to California, and remained about 11 months. A part of the realty conveyed to the company was Riewe Terrace. On December 30, 1905, the company contracted with the plaintiff to build some flats for her to cost $9,800. She advanced it $8,000 on a note and deed of trust executed by the company. She did not record her deed of trust until June 9, 1906, by which time the property included therein had been incumbered to such an extent as to make her security worthless. The homestead was sold in October, 1905,...