Farmers' Bank v. Worthington

• Decision Date: 08 June 1898
• Citation: 145 Mo. 91,46 S.W. 745
• Parties: FARMERS' BANK OF CONCORDIA v. WORTHINGTON et al.
• Court: Missouri Supreme Court

46 S.W. 745

145 Mo. 91

FARMERS' BANK OF CONCORDIA v. WORTHINGTON et al.

Supreme Court of Missouri, Division No. 1.

June 8, 1898.

FRAUDULENT CONVEYANCES — KNOWLEDGE OF GRANTEE — CONSIDERATION — EVIDENCE — BURDEN OF PROOF — WITNESSES — DEEDS — PLEADING.

1. A transfer which is fraudulent as regards the grantor's creditors is not fraudulent as regards the grantee, unless he knew of the grantor's intent, and participated in it.

2. Where, in a creditor's suit to set aside a conveyance, plaintiff alleges fraud on the part of grantor and grantee, which allegation is denied by the grantee, the burden of proving the fraud rests on plaintiff.

3. Where the facts surrounding a transaction alleged to be in fraud of creditors consist as well with honesty as with fraud, honesty will be presumed.

4. No knowledge of a fraudulent intent on the part of a debtor in disposing of his property can be imputed to the grantee because he bought property for $40 an acre, for which the grantor had formerly asked $50.

5. The fact that it is improbable that a grantee had in his possession on the day of a transfer attacked by creditors the amount of a cash payment which he said he made on the property is not, standing alone, an evidence of fraud.

6. A grantee testified that he made a cash payment of a certain amount on land bought by him on the day of the transfer; that a part of it he borrowed from his son, and the remainder he had accumulated during the preceding four months. Held, that the falsity of the statement was not established by evidence of the receipts of the grantee and his son during a portion of that time, and that his property returned for taxation over five months before did not show his possession of such a sum of money.

7. A failure by defendant to produce a witness whom plaintiff was equally able to produce is not ordinarily ground for any presumption against defendant.

8. Where a deed is executed, but no person is named therein as grantee, and it is delivered with parol authority to insert the grantee's name, the grantee whose name is afterwards inserted takes a good title; and this although the blank was filled in the absence of the grantor.

9. In an action to set aside a conveyance as fraudulent as to creditors, the fact that the name of the grantee and the consideration were put in after execution will not be considered, where the pleadings do not question the deed on that ground.

Appeal from circuit court, Lafayette county; Richard Field, Judge.

Suit by the Farmers' Bank of Concordia against Eliza J. Worthington and others. The bill was dismissed, and complainant appeals. Affirmed.

Wallace & Chiles, for appellant. Alex. Graves and John Welborn, for respondents.

MARSHALL, J.

This is a proceeding in equity to declare void certain conveyances of real estate in Lafayette county, from Joab Worthington to Joseph L. Youngs, and to subject the same to the payment of the plaintiff's judgment. The facts essential to the determination of the case are these: Prior to April, 1893, Joab Worthington owned 1574/5 acres of land, worth $40 an acre. He was reputed and believed to be solvent, and his credit was good. On the 18th day of April, 1893, he indorsed a note for $1,550 made by his son-in-law, Brown, to the plaintiff, payable six months after date; on the 27th of April, 1893, he indorsed a similar note for $500, payable at five months after date; and on the 28th of June he indorsed another like note for $500, payable at six months. Brown was worth but little, and his credit was not good. On the 15th of November, 1893, Worthington conveyed 574/5 acres of land to his attorney, John Welborn, who at the same time conveyed it to Eliza J. Worthington, Joab's wife. There was no consideration for this transfer, and its purpose is admitted to have been to vest the title in Mrs. Worthington. On the 17th of November, 1893, Joab Worthington went to the bank, and informed its officers that Brown was not able to pay his note, and proposed to deed to the bank 60 acres of his land in discharge of his and Brown's indebtedness of $2,550 to the bank. Two of the directors of the bank went to see the land that day, to decide as to whether the bank would accept the proposition. When they reached the place Worthington withdrew his proposition, but proposed to let the bank have the 60 acres for $2,800, and to apply $2,550 in discharge of the debt, and pay him the difference. The directors arranged to meet him the next day to determine the proposition. Worthington did not keep the engagement, so the bank brought suit that day on the two notes first described; had the summons served on Brown at once, and on Worthington about 10 o'clock that night. On the 17th or 18th of November, 1893, Youngs and Worthington met at Aullville, and rode home together. Youngs had been trying for several years to buy Worthington's land, but was willing to give only $40 an acre, while Worthington demanded $50. Worthington owed Youngs about $1,500, and, while riding homeward, Youngs told Worthington he had heard that he (Worthington) had deeded a part of his land to his wife, and that he (Youngs) wanted a deed of trust to secure his debt. Worthington refused to give the security, but proposed to sell him the whole farm for $40 an acre, and asked him (Youngs) to go to Lexington the next day and complete the transaction. Youngs declined to go until the following Monday. On that day the parties met at Welborn's office, and after he had examined the title he drew two deeds, — one for 574/5 acres, and the other for 1574/5 acres; the consideration expressed being $6,280 in each. Youngs surrendered to Worthington his three notes, aggregating $1,500, paid him $2,500 in cash, and gave him two notes, — one for $1,200, at 30 days, and one for $1,080, at 60 days. On the 27th of December, 1893, plaintiff obtained against Brown and Worthington a judgment on the two notes previously sued on, and on the 27th of January, 1894, instituted suit against Worthington and wife and Welborn and Youngs to set aside the conveyances, and subject the land to the payment of its debt. On the 4th of April, plaintiff obtained judgment on the third note described. The equity case was tried in July, 1894, and it appeared that the three notes, amounting to $1,500, Youngs held against Worthington, were for borrowed money; that the $2,500 cash paid was made up of $1,600 Youngs had on hand in his home, cash accumulated from the sale of cattle since the July previous, and $900 he borrowed from his son, Elmer, who was also a farmer and stock dealer; that the notes for $1,200, at 30 days, and $1,080, at 60 days, were paid at or before maturity, — before the institution of that suit, and before Youngs knew that Worthington was indebted to the bank. Upon this showing the plaintiff took a voluntary nonsuit, but immediately instituted this suit, having a like purpose. Joab Worthington and wife in the meantime had removed from this state; and, before service was had, Joab died, and his heirs were made parties to this suit. The answer of Youngs admits the purchase, denies the allegations of fraud, and sets up that he purchased the property in good faith, and for a valuable consideration. Welborn admits the conveyance from Joab Worthington to him, and by him to Eliza Worthington, was without consideration, and for the purpose of vesting the title in Eliza J. Worthington. The other defendants made default. Upon the trial in addition to the facts above stated, the plaintiff showed, by the testimony of the shipping master of the Kansas City Stock Yards, and by that of the bookkeepers of two firms of stock dealers in that city, that between October 1, 1893, and April 1, 1894, Joseph L. Youngs' and Elmer E. Youngs' stock dealings in Kansas City were as follows: Elmer Young, October 20, 1893, one car load (72) hogs, $822.27, of which he drew $10 cash, and balance was sent to American Bank, in Higginsville; December 14, 1894, one car (16) cattle for Elmer, and two cars (38) cattle for Joseph, $1,807.93, of which Elmer drew $25, and the balance was sent to American Bank, at Higginsville; January 29, 1894, 73 hogs, $847, of which Elmer drew $25, and balance was remitted to the same bank; February 1, 1894, 18 cattle and 3 hogs, $601.68, of which Elmer drew $10, and the balance was remitted to the same bank; March 13, 1894, 59 hogs, account Joseph, $596.05, remitted to same bank. The books of the bank showed that all of these amounts, except the last, were credited to Elmer. The evidence further showed that the cattle of Joseph and Elmer were sometimes billed in one name, and sometimes in another. The returns for taxation made by Joseph for the years 1891, 1892, and 1893 showed no solvent unsecured notes, and no money on hand or on deposit. The return for 1893 showed he owned 17 hogs and 36 cattle. The evidence further showed that in 1889 Joseph gave a deed of trust on other land to secure the payment of $2,500, purchase money therefor, and paid the same April 28 and June 9, 1894, and that on June 19, 1894, he borrowed of Judge Richard Field $1,500, payable at two years, and secured it by deed of trust, and that in September, 1893, he borrowed $1,500 from A. Wade, secured it by deed of trust, and paid it seven or eight months later. It further appeared that on March 8, 1890, Elmer borrowed $2,484.30 from his father, Joseph, at two years, and secured it with his land, which he afterwards paid. Joseph explained his having...