Howard v. Zweigart

• Decision Date: 30 June 1917
• Docket Number: No. 18284.,18284.
• Citation: 197 S.W. 46
• Parties: HOWARD v. ZWEIGART et al.
• Court: Missouri Supreme Court

197 S.W. 46

HOWARD v. ZWEIGART et al.

No. 18284.

Supreme Court of Missouri. In Banc.

June 30, 1917.

Motion for Rehearing or to Modify Judgment Denied July 12, 1917.

Appeal from Circuit Court, Vernon County; B. G. Thurman, Judge.

Suit by Charles Howard against Lizette Zweigart and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded, with directions.

This is an action in equity whereby plaintiff, a judgment creditor of one Henry Zweigart, deceased, seeks to set aside a conveyance from said Henry Zweigart to defendant Lizette Zweigart, and also to set aside a trustee's deed to defendant John A. Silvers, and subject a certain tract of land, situate in Vernon county and containing 1,540 acres, to the payment of plaintiff's judgment against said Henry Zweigart. Upon a trial below plaintiff was cast, and he appeals in conventional form.

The learned trial judge made a statement of the case and a finding of facts therein, which we adopt in large part, with the addenda and emendations thereof hereafter to be by us set out. So much of the finding of the court nisi as we adopt runs thus:

"The petition is based upon the following allegations: That on October 12, 1911, plaintiff obtained a judgment against E. N. Hurst, administrator of Henry Zweigart, deceased, for $7,000 and costs. That on the 15th day of November, 1899, Henry Zweigart executed and delivered to plaintiff his warranty deed to certain lands in Missouri, and there was a breach of the covenant of warranty, and this judgment was rendered for the damages arising from such breach. That the paramount outstanding title was established on June 3, 1908, by judgment in the case of Campbell v. Howard. That shortly after Henry Zweigart was notified of the outstanding title he executed a deed to the land sought to be affected by this suit to his daughter, Lizette Zweigart. That the deed rendered Henry Zweigart insolvent, and was made without consideration, and to hinder, delay, and defraud creditors. Defendant Lizette Zweigart, accepted said deed with full knowledge of the fraud. The land at the time was incumbered with a deed of trust for $8,000. Lizette Zweigart afterwards, on October 5, 1909, borrowed $2,900.69 of the defendant Farmers' & Manufacturers' Bank, and gave a deed of trust on the land to secure the same, and the same was accepted by the bank with full knowledge of the fraud in the Henry Zweigart deed. That the defendant bank bought the $8,000 debt and took an assignment of it to the bank. That the bank, on December 11, 1910, caused the $2,900.69 deed of trust to be foreclosed, and defendant John A. Silvers bought the land for $2,100 and received a trustee's deed to the same. That defendant Silvers paid nothing for the land, and holds the same in trust for the bank, who caused this foreclosure, for the benefit of Lizette Zweigart, and to withdraw the same from the creditors of Henry Zweigart, and hold the same for the use of Lizette Zweigart. The advertisement of notice of sale was made in the Schell City News, in a remote part of the county, with little circulation in Nevada, where the land was sold, and sold at an unusual hour for $2,100, and its value was $45,000. That E. N. Hurst was trustee, who was at the time of sale administrator of the estate of Henry Zweigart, deceased. That the land so sold under the circumstances, being reasonably worth $45,000, and being intended to cut out the judgment of plaintiff and other creditors, is fraudulent and void. The prayer seeks cancellation of the deed to Lizette Zweigart and John A. Silvers, offers to pay amount of deeds of trust, and asks decree assigning them to plaintiff and special lien against land for plaintiff's debt, and all relief the facts may warrant. The separate answer of defendants admit execution of the deeds and deny all other allegations.

"There is but little controversy about the facts. The deeds were executed at the dates as set out in the petition. The deed of Henry Zweigart to Lizette Zweigart was made shortly after the liability on the warranty mentioned in the petition became known to him, and was intended to place the property beyond the reach of plaintiff in collecting his claim for damages, and was made to the use of the grantor, the debtor. The deed of trust to defendant E. N. Hurst, trustee, to secure the debt of $2,900.69 to the Farmers' & Manufacturers' Bank by Lizette Zweigart, was made and accepted in good faith, without any knowledge of any infirmity in the title of Lizette Zweigart, except such as created by constructive notice of the contents of the Henry Zweigart deed. That prior to the foreclosure, in the spring of 1910, defendant John W. Jamison, upon the request of M. T. January, one of the attorneys for plaintiff, agreed to notify January if he concluded to foreclose either of the deeds of trust. At the time, which was prior to May 3, 1910, the $2,900.69 was not due until October 5, 1910. That several letters were written by January to Jamison; January, on behalf of his client, seeking to get an assignment of the bank's debt secured by these deeds of trust, and the bank declining to sell on account of the objection made by Lizette Zweigart that they might be foreclosed. The last letter of January being in the early part of July, 1910, asking if the bank intended to foreclose these mortgages, Jamison answered on July 6, 1910, that `there has been nothing done towards foreclosing in the Zweigart matter, and will not be at present time.' This is the last communication on the subject until after the foreclosure of the $2.900 deed of trust. E. N. Hurst, trustee named in the deed of trust made by Lizette Zweigart to the bank, while administrator of the estate of Henry Zweigart, caused the notice of the foreclosure to be published in the Schell City News, and was informed that paper had circulation at Nevada, after making inquiry about the circulation of the paper. There is no evidence that he had any knowledge of the agreement between January and Jamison about personal notice, or that he acted in bad faith in selecting the paper in which to publish the notice. That this sale occurred in Nevada, Mo., on December 10th, between 11 and 12 o'clock a. m. That the usual time for such sales is between 1 and 2 o'clock p. m. That defendant John W. Jamison bid in the property at $2,100, when the property, clear of incumbrance, was worth from $25,000 to $30,000. That it is the character of land about which there is a great difference of opinion as to its value. That the deed, at the trustee's sale, was taken in the name of the defendant John A. Silvers, by previous arrangement with defendant Jamison to take the land at the amount of the bank's debt. That defendant Silvers executed note and deed of trust on the land for the bank's debt, aggregating nearly $3,200. That defendant Jamison has ever since managed the property, rented and collected rents. That rents have paid the interest on the entire debt held by the bank since the foreclosure. That the Zweigarts have continued to occupy part of the land since the foreclosure, and part has been rented to other parties. That shortly before the foreclosure Lizette Zweigart paid the taxes on the land. That some time after the foreclosure plaintiff's attorneys, Crain and January, visited the defendant bank and tendered the amount of the bank's debt upon assignment of the securities held by the bank, which was refused.

"The court finds that defendant bank is not holding the legal title in John A. Silvers for the use of Lizette Zweigart; that the purchase in Silvers' name was for the purpose of having the bank carry the indebtedness until Silvers and Jamison could sell the property for speculative purposes, and for their own use and benefit; and that the foreclosure was not intended to assist Lizette Zweigart in putting the property beyond the reach of the plaintiff's judgment. There is nothing in the record to show when the trains on the Missouri Pacific depart for the north, or how the trustee, Hurst, and defendant Jamison reached or departed from Nevada after the sale at the foreclosure. If important, it might have been ascertained while these gentlemen were on the witness stand."

As forecast above, it will be necessary, when we come to set forth our views of the case, to add certain facts to those found by the learned trial court. But no occasion arises, we take it, for cumbering the books twice with these facts. We shall therefore reserve a statement of them till we come to set forth the reasons for the judgment which we have reached.

M. T. January, of Nevada, Mo., John H. Crain, of Ft. Scott, Kan., and Peyton A. Parks, of Clinton, for appellant. Scott & Bowker, of Nevada, Mo., for respondents.

FARIS, J. (after stating the facts as above).

Coming to consider certain rules of equity, which it is urged will aid us in reaching a conclusion upon the facts of this very difficult case, it is urged (a) that in a close case, shot through with conflicting evidence, we ought to defer to the finding of the learned chancellor nisi; and (b) that no inference of any sort is to be drawn by us from the fact that, of the three individual defendants charged by the petition with fraud, only one testified in the case and therein "purged himself" by lip service of the fraud averred, because no sufficient showing of fraud is made by the proof to necessitate either a denial or an explanation.

The rule of equity practice, which moves an appellate court to defer to the finding of the chancellor in a certain class of cases, is well settled and well understood. We concede it, and have no quarrel with it; but such rule is in a way a rule of necessity and convenience, applied often (but we admit, not always) by the appellate courts because of the difficulty — sometimes amounting to an impossibility — of finding wherein upon a disputed fact the truth lies, owing to the seemingly balanced weight of the proof offered pro and con...