Hoffman v. Nolte

• Decision Date: 05 March 1895
• Citation: 29 S.W. 1006,127 Mo. 120
• Parties: Hoffman, Appellant, v. Nolte et al
• Court: Missouri Supreme Court

29 S.W. 1006

127 Mo. 120

Hoffman, Appellant, v. Nolte et al

Supreme Court of Missouri, Second Division

March 5, 1895

Appeal from St. Louis City Circuit Court. -- Hon. L. B. Valliant Judge.

Reversed and remanded.

Carlisle & Ottofy for appellant.

(1) A creditor is not necessarily the holder of a debt merely, as that term is generally understood; for one having a legal right to damages capable of judicial enforcement is a creditor within the meaning of the statutes and law upon the subject of fraudulent conveyances. 8 Am. & Eng. Encyclopedia of Law, p. 750, and cases there cited under note 1. (2) Where a man creates a joint tenancy between himself and son, or takes title to property in the joint name of himself and wife, the conveyance being voluntary, if there is no other property to satisfy a judgment creditor, a court of equity will declare the conveyance fraudulent both as to antecedent and subsequent creditors and decree satisfaction of the judgment out of the property. Roberts on Fraud. Conv., *19 and following; Stileman v. Ashdown, 2 Atk. 478; Christ's Hospital v. Budgin, 2 Vern. 683. And even though thirty-seven years elapse between the conveyance and the judgment. Stileman v. Ashdown, Ibid. (3) If a debtor is in embarrassed or doubtful circumstances, and makes a voluntary conveyance, and is afterward unable to meet his debts owing at the time of the conveyance, in the ordinary course prescribed by law for their collection, or is reduced to that situation that an execution against him would be unavailing, such conveyance is void as to those debts and the property conveyed is subject to their payment. Potter v McDowell, 31 Mo. 73; Bucks v. Moore, 36 Mo.App. 535; State to use v. Laurie, 1 Mo.App. 378; Lionberger v. Baker, 88 Mo. 453; Walsh v. Ketchum, 84 Mo. 431; Jordan v. Buschmeyer, 97 Mo. 97; Bohannon v. Combs, 79 Mo. 312; Oberneier v. Tressler, 19 Mo.App. 522. First. Condition to pay debts in the ordinary course does not mean, as persons carrying on trade usually do. Potter v. McDowell, 31 Mo. 73. Second. And this is the rule, although the property reserved may have been deemed originally adequate to that purpose. Bump on Fraud. Conv. [3 Ed.], p. 285. Third. It is only where he had ample means at the time of the conveyance that it will be upheld against creditors. Walsh v. Ketchum, 84 Mo. 431; Warner v. Dove, 33 Md. 587. Fourth. In considering the question of ample means, even though solvent, the extent of his means and the nature and situation of his property must be considered; it must be such as in conveniently accessible to creditors, and as may be reached and subjected by process of law without his consent, without delay, difficulty or expense; it is not sufficient that he may have in some form or another enough property or money in his pocket to pay all his debts. Eddy v. Baldwin, 32 Mo. 374; Bump on Fraud. Conv. [3 Ed.], pp. 288, 289; Warner v. Dove, 33 Md. 587. Fifth. The imputation of.fraud is repelled only where a person of great wealth conveys a small property, or his debts bear a very small proportion to his actual means. 1 Story's Eq. Juris. [13 Ed.], sec. 355. (4) "It is not necessary to prove an actual intent to delay, hinder or defraud creditors. Intent is an emotion or operation of the mind, and can be shown only by acts or declarations." Bump on Fraud. Conv. [3 Ed.], p. 270, cases, notes 1 and 2; Cooper v. Standley, 40 Mo.App. 144; Douglass v. Cissna, 17 Mo.App. 64; Wait on Fraud. Conv. [2 Ed.], sec. 208, p. 299; Deering v. Collins, 38 Mo.App. 73; Snyder v. Free, 114 Mo. 362. (5) It is not necessary to show that one is insolvent, at the time of making a voluntary conveyance in order to render it void as to existing creditors. Potter v. McDowell, 31 Mo. 73; State to use v. Laurie, 1 Mo.App. 378; Bump on Fraud. Conv. [3 Ed.], p. 289; Hastings v. Crossland, 13 Mo.App. 597. However honest the transaction, title only passes subject to the just demands of creditors, both prior and subsequent. R. S. 1889, sec. 5170; Gabriel v. Mullen, 111 Mo. 125. (6) Where property is acquired in name of wife during coverture, the presumption of law is that it was paid for by the husband; the burden is on her to show that she acquired it with her separate means; in the absence of such evidence there is a violent presumption that it was acquired with his means. Sloan v. Terry, 78 Mo. 625; Jordan v. Buschmeyer, 79 Mo. 79; Seitz v. Mitchell, 94 U.S. 589; McFerran v. Kinney, 22 Mo.App. 554; Patton v. Bragg, 113 Mo. 601; Bucks v. Moore, 36 Mo.App. 536. (7) To uphold the conveyance it must be made both upon a good consideration and bona fide. 1 Story's Eq. Juris. [13 Ed.], sec. 353. Natural love and affection as a consideration can not be supported as a general rule against the rights of existing creditors. Wait on Fraud. Conv. [2 Ed.], sec. 210, p. 301; Snyder v. Free, 114 Mo. 360. (8) Where debtor's estate is insolvent no further proceeding are required to lay a foundation for equitable relief against his fraudulent grantee. Lyons v. Murray, 95 Mo. 23. "As such transfer is void at law, the property becomes, at the death of the transferor, legal -- and not merely equit able -- assets for creditors." May on Fraud. Conv. [1 Ed.], p. 69. And the conveyance will be disturbed so far as is necessary to satisfy their claims. May on Fraud. Conv. [1 Ed.], 68, 69, 316, 464.

Stone & Slevin for respondents.

(1) To constitute a fraudulent conveyance, there must, as a rule, be a concurrence of three elements; that is to say, there must be a creditor to be defrauded, a debtor intending to defraud, and a conveyance of property out of which the creditor could have realized his claim, or some portion thereof. 8 Am. and Eng. Encyclopedia of Law, p. 749; O'Conner v. Ward, 60 Miss. 1036; Hoyt v. Godfrey, 88 N.Y. 669. (2) A voluntary deed to a member of the family made when the grantor was perfectly solvent is good and valid as against existing creditors. Walsh v. Ketchum, 84 Mo. 427; Davis v. Kenedy, 105 Ill. 300; Herring v. Richards, 3 F. 439; Curry v. Loyd, 22 F. 258; Carr v. Bruge, 81 N.Y. 584. (3) A voluntary settlement may now be made by a party indebted at the time, provided that ample available assets are left out of settlement to meet those debts whether the debts are actually then payable or not. May on Fraud. Conv. p. 50; Bump on Fraud. Conv., p. 278. (4) It is settled that mere indebtedness alone is not sufficient to render a voluntary conveyance void, if the donor has ample means left to pay his debts. Bump on Fraud. Conv., p. 279; Eddy v. Baldwin, 32 Mo. 369; Moritz v. Hoffman, 35 Ill. 553. (5) As to subsequent creditor actual fraud must be proved. Mittelberg v. Harrison, 11 Mo.App. 136; Payne v. Stanton, 59 Mo. 158; Mittelberg v. Harrison, 90 Mo. 444. (6) If a creditor having demands accruing partly before, and partly after a conveyance by his debtor, which he would impeach on the ground of fraud, blends them in one suit, and, having received judgment, extends his execution on the land, he can come in only in the character of a subsequent creditor. Quimby v. Dill, 40 Me. 528; Reed v. Woodman, 4 Me. 400; Moritz v. Hoffman, 35 Ill. 558; Bump on Fraud. Conv., p. 509. (7) A voluntary conveyance is not per se fraudulent as against creditors prior or subsequent, but the bona fides is a question of fact under all the circumstances attending its execution. Lane v. Kingsbury 11 Mo. 402; Lloyd v. Fulton, 91 U.S. 485; Hinde's Lessee v. Longworth, 11 Wheat. 213; Walsh v. Ketchum, 84 Mo. 427. (8) "Such a conveyance is fraudulent only when it necessarily delays, hinders or defrauds them." Bump on Fraud. Conv., pp. 275, 276; Potter v. McDonald, 31 Mo. 62; Patten v. Casey, 57 Mo. 118. (9) "The rule is that fraud must be proved and can not be presumed, and, if the facts shown are all consistent with an honest purpose, honesty in the transaction should be inferred." Robinson v. Dryden, 118 Mo. 534. (10) Where it is not shown that the debtor is in embarrassed circumstances, or largely indebted, or that a suit against him would be unavailing, or that he is unable to meet his debts in the ordinary course prescribed by law for their collection, a voluntary conveyance will not be set aside as fraudulent and void. Dougherty v. Harsel, 91 Mo. 161.

Gantt, P. J. Sherwood and Burgess, JJ., concur.

OPINION

Gantt, P. J.

This is an action in equity to divest the title from defendant Anna Nolte in certain real estate in the city of St. Louis, and to set aside a certain deed of conveyance thereto by Joseph Nolte on the ground that it was executed in fraud of creditors. The tract contains twenty-one and thirty-nine hundredths acres. The substance of the petition is as follows:

Plaintiff states that on the fifteenth day of March, A. D. 1892, he recovered a judgment in the circuit court of the city of St. Louis, state of Missouri, against Joseph Nolte, now deceased, for the sum of $ 1,679.60 as appears by the certified transcript of the proceedings in said cause herewith filed and marked "Exhibit A;" that execution issued thereon against the property of the said Joseph Nolte, directed to the sheriff of said city and state, which said execution has been returned by the said sheriff wholly unsatisfied; and said judgment is wholly unpaid and unsatisfied and the whole thereof, with interest from said fifteenth day of March, 1892, is still due plaintiff from the said Joseph Nolte, deceased.

Plaintiff further states that said deceased, Joseph Nolte, with a view and with the intent to hinder, delay and defraud his creditors, and among others this plaintiff, did on the twenty-third day of October, 1883, execute a certain conveyance of that date, in which the defendant, Anna Nolte his wife, joined and relinquished her dower, whereby he assigned to one John C....