Graveman v. Huncker

• Decision Date: 04 May 1940
• Docket Number: 36351
• Parties: August Graveman, Appellant, v. Edwin F. Huncker, Louise K. Huncker, J. George Diehr, Julia Emmons and August Wilhelmina Sandhaus
• Court: Missouri Supreme Court

139 S.W.2d 494

345 Mo. 1207

August Graveman, Appellant, v. Edwin F. Huncker, Louise K. Huncker, J. George Diehr, Julia Emmons and August Wilhelmina Sandhaus

No. 36351

Supreme Court of Missouri

May 4, 1940

Appeal from Circuit Court of Franklin County; Hon. R. A Breuer, Judge.

Affirmed.

John E. Corvey and Wilbur Schwartz for appellant.

(1) A party litigant refusing to give his deposition may have his answer stricken on motion. The Statute of Limitations had long since run on any offense for fraudulent transfer of property; defendants have immunity under Section 1729, Revised Statutes 1929; defendant Edwin F. Huncker had waived his right to claim the privilege. Secs. 1729, 1730, R. S 1929; 28 R. C. L., p. 440, sec. 27; Hadley v. Standard Oil Co., 218 Mo. 375, 116 S.W. 902; Jones v Mallinckrodt, 249 Mo. 739, 156 S.W. 967; State v. Strack, 316 Mo. 600, 292 S.W. 63; Ex parte Buskett, 106 Mo. 609; Glickstein v. United States, 32 S.Ct. 71, 222 U.S. 1939, 56 Law Ed. 129. (2) Defendant Edwin F. Huncker is a necessary party to this proceeding, he and his wife Louise K. Huncker having encumbered all of his real estate by deeds of trust securing notes in large sums, all payable to a "straw" party, and without consideration as to such party. Different rule prevails where grantor parts with legal title. Springfield v. Ransdell, 305 Mo. 43, 264 S.W. 773; 41 C. J., 275, 277, p. 276. (3) Admissions contained in documents and proceedings of a court of record are admissible against a party litigant, under the statute. This testimony would also be admissible as evidence preserved in a bill of exceptions under provisions of Section 1714, Revised Statutes 1929. Sec. 1700, R. S. 1929; Pulitzer v. Chapman, 85 S.W.2d 411; Southern Bank v. Nichols, 202 Mo. 309, 100 S.W. 613; 22 C. J. 343, sec. 391. (4) Judgment fixing title to real or personal property is admissible in evidence, both against parties to the suit and strangers, although same has been appealed from, where material to the issues on trial. Plaintiff offered in evidence a judgment rendered by the Circuit Court of St. Charles County, Missouri, which had been appealed from, which fixed the title to two notes and deeds of trust which are involved in this action in Edwin F. Huncker. The judgment was rejected by the lower court because it had been appealed from. (a) The judgment is admissible even though appealed from. Mann v. Doerr, 222 Mo. 18; Vantine v. Butler, 250 Mo. 450. (b) The judgment fixing title to real or personal property is admissible in evidence for or against strangers as well as parties to the original suit. State ex rel. Kirby v. Trimble, 32 S.W.2d 571; Thomason v. Allen, 26 S.W.2d 611. (5) The good faith of transactions between husband and wife must so clearly be shown that there can be no reasonable doubt of the honesty of the transaction. Conrad v. Diehl, 129 S.W.2d 877; Spratt v. Early, 169 Mo. 357, 69 S.W. 13; Glasgow Milling Co. v. Burnes, 144 Mo. 192, 45 S.W. 1074; Wilcoxson v. Darr, 139 Mo. 660, 41 S.W. 227; Van Raalte v. Harrington, 101 Mo. 602, 14 S.W. 710. (6) The bare showing of use of wife's money is insufficient as against creditors of the husband to create the relationship of debtor and creditor between husband and wife. Plaintiff contends that the evidence clearly shows that Edwin F. Huncker and his wife, Louise K. Huncker did not deal together as debtor and creditor. Cole v. Cole, 231 Mo. 236; Churchill & Alden Co. v. Ramsey, 208 N.W. 406; Farmers & Traders Bank v. Kendrick, 341 Mo. 576, 108 S.W.2d 62. (7) If part of consideration for execution of deeds of trust is fraudulent and without consideration, "the fact that some of the notes may be bona fide will not save the deed." New England Natl. Bank v. Montgomery, 192 S.W. 941; Klauber v. Schloss, 198 Mo. 502, 95 S.W. 930; State ex rel. Robertson v. Hope, 102 Mo. 431; Cordes v. Straszer, 8 Mo.App. 61; Gregory v. Sitlington, 54 Mo.App. 60; Implement Co. v. Jones, 143 Mo. 284. (8) Wife who participates in fraudulent scheme by accepting excess of property over her claim, and joining in the execution of deeds of trust to a "straw" party, securing notes made to such party without consideration, all of which render the husband insolvent, is precluded from asserting her claim in equity. Piekert v. Repple, 114 S.W.2d 1003; Lomax & Stanley Bank v. Peacher, 30 S.W.2d 44; Riley v. Vaughan, 116 Mo. 176, 22 S.W. 707; Snitzer v. Pokres, 324 Mo. 386, 23 S.W.2d 155; Munford v. Sheldon, 320 Mo. 1077, 9 S.W.2d 907; Bank v. Trimble, 315 Mo. 966, 287 S.W. 432. (9) Conveyances which include all of debtor's property and leave him without means to pay existing debts, are fraudulent as to creditors. Hendrix v. Goldman, 92 S.W.2d 736; May v. Gibles, 4 S.W.2d 771; Citizens' Bank v. McElvain, 280 Mo. 505, 219 S.W. 75; Barrett v. Moote, 187 S.W. 67; Needles v. Ford, 167 Mo. 495, 67 S.W. 240; Snyder v. Free, 114 Mo. 360, 21 S.W. 847; 27 C. J., p. 550, sec. 249.

Wm. Waye, Jr., and B. H. Dyer for respondents.

(1) Although this is an equity case in which this court may make its own finding of facts, yet it will defer to the findings of the trial court unless such findings, upon the printed record, are clearly erroneous or against the greater weight of the evidence. Norton v. Norton, 43 S.W.2d 1033; Fessler v. Fessler, 332 Mo. 665, 60 S.W.2d 17; Farmers & Merchants Bank v. Funk, 92 S.W.2d 587; Faber v. Bruner, 13 Mo. 541. (2) The burden to prove fraud is upon the party who alleges it. It must be established as an affirmative fact. Albert v. Besel, 88 Mo. 150; Bank v. Worthington, 145 Mo. 91; Wall v. Beedy, 161 Mo. 625; Stahlhuth v. Nagle, 229 Mo. 570; Bank of Brimson v. Graham, 76 S.W.2d 376. (3) A finding of fraud must be a reasonable inference from the circumstances and not a mere suspicion, because where facts comport as well with honesty as with fraud, the transaction will be held as honest. Waldingham's Executors v. Loker, 44 Mo. 132; Farmers & Merchants Bank v. Funk, 92 S.W.2d 587; Bank v. Worthington, 145 Mo. 91; Jones v. Nichols, 280 Mo. 664. (4) Where, as in the instant case, the chancellor has made no special finding of fact, but has made a general finding in favor of the defendant, the conclusion is that the court has found all issuable facts for defendant. The rule is: "If a special finding is silent on a material point it is deemed a finding against the party who has the burden of proof." Therefore, in the present case, the finding was against plaintiff upon every issuable and material fact of the case. Pendergast Const. Co. v. Goldsmith, 273 Mo. 196, 201 S.W. 354; Bank of Brimson v. Graham, 76 S.W.2d 382. (5) A debtor, whether solvent or insolvent, may prefer one or more of his creditors and to that end, by any suitable means, may appropriate the whole or any part of his property to the payment of his just debts to one or more of his creditors to the exclusion of others. Wall v. Beedy, 161 Mo. 625; Meyer Bros. Drug Co. v. White, 165 Mo. 136; Wood v. Porter, 179 Mo. 56; Stahlhuth v. Nagle, 229 Mo. 570. (6) A surety is a contingent creditor, and as such may be lawfully preferred as against other creditors. When Mrs. Huncker signed the Schnarre note she thereby became a contingent creditor of Edwin F. Huncker. Albert v. Besel, 88 Mo. 150; Peoples Bank of Memphis v. Jones, 93 S.W.2d 903. (7) A debtor has a right to prefer creditors, and even though he is actuated by an intent to hinder and delay other creditors, and such preferred creditor knows of such intent and takes the property for the purpose of securing and protecting himself, the transfer is legitimate and valid, even though its effect is to hinder and delay others. Sexton v. Anderson, 95 Mo. 373; Kincaid v. Irwine, 140 Mo. 615. (8) Family relationship of debtor to preferred creditor does not of itself affect validity of preference and is not a badge of fraud, but is a circumstance to be considered in connection with other circumstances, and given due weight in determining good faith of transaction. Stahlhuth v. Nagle, 229 Mo. 570; Hume v. Wright, 274 S.W. 741; Friedel v. Bailey, 329 Mo. 22, 44 S.W.2d 9; Farmers & Merchants Bank v. Funk, 92 S.W.2d 592; Green v. Wilks, 109 S.W.2d 859; First Natl. Bank of Monett v. Vogt, 126 S.W.2d 199; 27 C. J. 637.

Cooley, C. Westhues and Bohling, CC., concur.

OPINION

COOLEY

Action in equity to set aside deeds of trust on real estate and trustee's deeds made in foreclosure thereof, on the ground of fraud as against a creditor. The suit was filed September 13, 1933, in the St. Charles County Circuit Court, in which county the lands affected are situated. It went on change of venue to the circuit court of Franklin County, where it was tried, resulting in a judgment for the defendants, from which plaintiff has appealed.

Prior to the alleged fraudulent conveyances the real estate in question belonged to Edwin F. Huncker. Louise K. Huncker was his wife. [We are informed by papers filed here that Edwin F. Huncker has died since argument and submission of the case in this court and substitution of parties has been here made, so we shall refer to him as a party defendant.] Defendant Diehr was trustee in the deeds of trust involved and as such sold the properties, having no other interest in the case. Defendant Julia Emmons was named as payee in the notes secured by the deeds of trust and as cestui que trust in the deeds of trust. She has and claims no interest in the controversy here involved, as will more fully appear hereafter. Augusta Sandhaus holds a note secured by deed of trust on some of the property involved, the bona fides of which does not seem to be seriously disputed.

Plaintiff Graveman, filed a suit for damages for personal injuries against Edwin F. Huncker on July 1, 1931, which eventually resulted in a judgment in his favor of $...