Ellis v. Clippard
| Decision Date | 27 August 1924 |
| Docket Number | 24066 |
| Citation | 264 S.W. 819,305 Mo. 234 |
| Parties | E. P. ELLIS, Trustee in Bankruptcy of Estate of BROWN CLIPPARD, Appellant, v. BROWN CLIPPARD, CORA A. CLIPPARD and ANNA KIEHNE |
| Court | Missouri Supreme Court |
Motion for Rehearing Overruled August 27, 1924.
Appeal from Cape Girardeau Court of Common Pleas; Hon. John A Snider, Judge.
Affirmed.
A M. Spradling and Hardesty & Limbaugh for appellant.
(1) This conveyance is void by reason of the grantor's fraudulent intent and the grantee's knowledge thereof. Sec. 2276, R. S. 1919. (a) The grantee is the wife of the grantor. Storage Co. v. Kuhlman, 238 Mo. 685. (b) As she claims to be his grantee merely for a fresh consideration and not to protect any antecedent debt, she can enjoy no protection as to her claim if she had prior knowledge of his fraudulent intent. Gust v. Hoppe, 201 Mo. 300; Lockran v. Rustan, 9 N.D. 43; 20 Cyc. 643. (c) The background of his intent in the conveyance shows fraud. Otto Stifel Co. v. Saxy, 273 Mo. 159. (d) His prior and subsequent statements and conduct in evidence are competent proof of his fraudulent intent. Baldwin v Short, 125 N.Y. 553; Meyer v. Mayo, 187 N.Y.S. 346; Holmes v. Braidwood, 82 Mo. 610; Bump's Fraud. Con. (3 Ed.) 582, 583; 27 C J. 468, 817; Bennie v. Schnecko, 100 Mo. 250; Blue v. Penniston, 27 Mo. 272; Zehnder v. Stark, 248 Mo. 39; Cole v. Cloe, 231 Mo. 236; Snyder v. Free, 114 Mo. 376. (e) The background of her part in the conveyance shows badges of fraud and her knowledge of his fraudulent intent. Black v. Epstein, 221 Mo. 286; Mason v. Perkins, 180 Mo. 702; Bennie v. Schnecko, 100 Mo. 250; Snyder v. Free, 114 Mo. 376; 29 Cyc. 1115; Dismukes v. Johnson, 199 F. 319; 20 Cyc. 465, 115; Henderson v. Bank, 123 Ala. 547; First National Bank v. Maxwell, 123 Cal. 360; Byer v. Taylor, 50 Ark. 314. (f) Her knowledge of his fraudulent intent is further shown by their badge of fraud in "overacting the part" by having her assume active management of the lands he had been handling exclusively for more than twenty years. State to use v. O'Neill, 151 Mo. 67. (g) Her knowledge of his fraudulent intent is further shown by their badges of fraud in trying to bolster up the deal with an appearance of honesty by setting up her prior release of dower as a consideration for this conveyance, and by having the deed recite "one dollar and other considerations." Woodson v. Pool, 19 Mo. 340; State to use v. O'Neill, 151 Mo. 158; Baldwin v. Whitcomb, 71 Mo. 651. (h) The evidence reveals the motor company as the chief cause of their mutual fears on May 24, 1920, and these fears are confirmed by the amount and character of the claims allowed against his estate at the time of the trial and before the one-year period for filing had expired. Bankruptcy Act of 1898, sec. 57 (n). (i) In this transaction he made an absolute conveyance to her in consideration of her merely securing with her property a loan to him, and she knew that to no grantee but herself, as his wife, would he have made such absolute conveyance prior to the grantee either paying or assuming his said loan or debt. (2) As to his creditors this conveyance to his wife was without consideration. (a) She did not become his creditor but merely became his surety. Barrett v. Davis, 104 Mo. 556; Gore v. Townsend, 105 N.C. 228, 8 L. R. A. 443; Hearne v. Keath, 63 Mo. 84; Taylor v. Fuqua, 203 Mo.App. 581; Citizens Bank v. Burrus, 178 Mo. 716. (b) No conveyance to a surety can be upheld against the creditors of the principal where the surety has neither paid nor assumed the debt. Kendall v. Baltis, 26 Mo.App. 411; Felder v. Ervin, 36 L. R. A. 345; Albert v. Besel, 88 Mo. 150; State to use, Kramer v. Mason, 96 Mo. 559; 20 Cyc. 494, 495; Craft v. Schlag, 61 N.J.Eq. 567; Concord Const. Co. v. Plante, 121 N.Y.S. 1026; 18 C. J. sec. 43, p. 163; Rollin v. Ross, 120 Mo. 208; National Tube Works v. Mfg. Co., 118 Mo. 635; Seger's Sons v. Thomas Bros., 107 Mo. 365; State ex rel. v. Hope, 102 Mo. 410; Ball v. O'Neill, 64 Mo.App. 380; Pattison v. Letton, 56 Mo.App. 331. (c) Her dower that had been previously assigned must be deemed voluntary and insufficient as a consideration for this conveyance, as against his existing creditors. Woodson v. Pool, 19 Mo. 340.
James A. Finch and Oscar A. Knehans for respondents.
(1) There is a resulting trust in the wife's favor and she is the equitable owner of the land where same is purchased by her or conveyed to her as a gift with no intention that any interest in it should be conveyed to the husband, although by mistake his name is included as one of the grantees in the deed. Turner v. Home Ins. Co., 195 Mo.App. 138; Alkire Grocer Co. v. Ballenger, 137 Mo. 369; Hudson v. Wright, 204 Mo. 412; Johnston v. Johnston, 173 Mo. 118; Donovan v. Griffith, 215 Mo. 149, 166; Haguewood v. Britain, 273 Mo. 89; Blake v. Meadows, 225 Mo. 1. (2) Though the title to land has been in the name of husband and wife for twenty-four years, a conveyance by husband to a son, and by the son to the mother, will not be set aside as fraudulent, where it appears that the mother purchased and paid for land with her own money. Gill v. Newhouse, 192 S.W. 431; Ingalls v. Ferguson, 138 Mo. 358; Dull v. Merrill, 69 Mich. 49; McClain v. Abshire, 72 Mo.App. 390; Garner v. Findlay, 110 F. 123; Blake v. Meadows, 225 Mo. 1. (3) Fraud as to creditors in a conveyance cannot be shown by a mere inference, but must be proved, and if the facts shown are equally consistent with an honest purpose, fraud will not be inferred. Ulrich v. Price, 233 S.W. 401; Garesche v. McDonald, 103 Mo. 1. (4) The voluntary conveyance by a person in debt is not, as to a subsequent creditor, fraudulent per se, but there must be proof of actual or intentional fraud. An insolvent person may make a conveyance to his wife, which will be good against subsequent creditors, unless made with the intent to hinder, delay and defraud subsequent creditors. Loy v. Lorick, 100 Mo.App. 105; Payne v. Stanton, 59 Mo. 158; Krueger v. Vorhauer, 164 Mo. 156; Wallace v. Penfield, 106 U.S. 260. (5) Fraud cannot be inferred from the mere fact that the seller was in debt. State ex rel. v. Merritt, 70 Mo. 275. (6) Fraudulent intent on the part of the debtor is not sufficient to defeat a preference. It must be shown that the transferee or creditor participated in it. National Co. v. Machine Co., 118 Mo. 365; Hill v. Taylor, 125 Mo. 342. (7) "While courts are astute to discover fraudulent schemes to defraud creditors, and will scrutinize very closely all transactions between husband and wife when it is charged that the husband is covering his property in his wife's name, they have not yet put an embargo upon the wives of unfortunate debtors which will prevent them from securing homes for themselves and families, when the husband has failed." Gruner v. Scholz, 154 Mo. 415. (8) A debtor, though unable to pay all his creditors, may pay one or more to the exclusion of the others, either in money or the transfer of property; and the favored creditor or creditors may accept such preference. If the preferred creditor, in such cases, acts in good faith and takes the money or property for the sole purpose of saving a bonafide debt, mere knowledge that the debtor intended to hinder, delay or defraud his creditors does not render the transaction void as against the creditors taking the preference; for simple knowledge under such circumstances does not amount to a participation in the intended fraud. Bank v. Fry, 216 Mo. 34; Shelley v. Boothe, 73 Mo. 74; Albert v. Besel, 88 Mo. 150; Alberger v. White, 117 Mo. 363; Holmes v. Brainwood, 82 Mo. 610; Wall v. Beedy, 161 Mo. 625; Farmers' Bank v. Worthington, 145 Mo. 91; State ex rel. v. Rubber Mfg. Co., 149 Mo. 214.
Appellant as trustee in bankruptcy of the estate of Brown Clippard, bankrupt, brought this suit to set aside deeds whereby the equity in 197.22 acres of land, hereinafter referred to as the "home place," was conveyed by Brown Clippard to Cora A. Clippard, his wife. The petition alleges the conveyance was without consideration and was made to hinder, delay and defraud existing and subsequent creditors. It is admitted that respondent Alma Kiehne neither had knowledge of nor was in any way a participant in any wrongdoing, if any there was, but was a mere conduit of title and acted in all respects in good faith. The trial court refused to set aside the conveyances, and this appeal followed.
In 1894, the tract in question was conveyed to Brown Clippard by his father, J. C. Clippard. In 1898, Brown Clippard and Cora A. Hartle, now Cora A. Clippard, were married and went to live on this land and have made it their home ever since. In 1900, Emanuel Hartle, Cora A. Clippard's father, desired to give her a farm. At this time A. H. Clippard, a brother of Brown, was the record owner of a tract of 166.65 acres which adjoined the home place of Brown and Cora. He had exchanged this tract for a 208 acres owned by his father, but the deeds had not been recorded, and before they were Clippard, Sr., got an intimation of Hartle's wish to secure the 166.65 acre tract for his daughter. Hartle bought this land from Clippard, Sr., and presented it to Cora A his daughter. The unrecorded deed from A. H. Clippard to his father was destroyed, and a deed conveying the tract to Cora A. was executed by A. H. Clippard and wife and J. C. Clippard and wife and duly delivered and recorded. It apparently occurred to J. C. Clippard that it would be a good idea to have this deed made to his son and his wife, Cora A. Clippard, jointly, and at his suggestion this was done. He fully understood the effect of such conveyance. Neither Hartle, who was paying J. C. Clippard for the land, nor Cora A., for whom her father was buying it, nor Brown, the...
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