Huffman v. Nixon

• Decision Date: 14 November 1899
• Citation: 53 S.W. 1078,152 Mo. 303
• Parties: HUFFMAN v. NIXON et al.
• Court: Missouri Supreme Court

53 S.W. 1078

152 Mo. 303

HUFFMAN v. NIXON et al.

Supreme Court of Missouri, Division No. 1.

November 14, 1899.

FRAUDULENT CONVEYANCES — INSOLVENCY — CONFIDENTIAL RELATION OF PARTIES — EXECUTION SALE — TITLE OF PURCHASER AT EXECUTION SALE.

1. A debtor in failing circumstances executed a deed of trust to his cousin, purporting to secure a note in favor of his brother, the deed not to become operative or taken as delivered until the money was furnished. No part of the consideration was paid to the debtor, but by his direction was turned over to his father in payment of an alleged debt of 15 years' standing, the deed and note also being assigned to him. Shortly thereafter the father died, leaving a personal estate, including the note and deed in question, valued at $6,600, which was taken by the debtor's brother at $3,500, thereby leaving the note unpaid. The deed of trust in question was recorded, but not delivered by the trustee until after a levy of attachment and the recording of the abstract of attachment upon the land described in the deed. Held, the deed of trust was fraudulent as to creditors, and that the title of the purchaser at the attachment sale under the levy was prior to any interest conveyed by the deed.

2. The conduct of a purchaser at an execution sale of all defendant's interest, under the belief that a deed of trust on the property was valid, will not estop him from afterwards contesting its validity with the maker or those claiming under him.

3. Where a sheriff attaches and sells in compliance with Rev. St. 1889, § 543, all the right, title, and interest of the defendant in land, the purchaser gets all the interest of the defendant, and the statement in the notice of sale that the same was made subject to all prior liens and judgments will not affect the purchaser's right to contest the validity of a trust deed on the property.

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

Bill in equity by Green Huffman against Charles D. Nixon and others to set aside a trust deed. Bill dismissed. Plaintiff appeals. Reversed.

This is a suit in equity begun in the Morgan circuit court in April, 1892, to set aside a fraudulent deed of trust on certain land in Morgan county, executed by J. B. Kelsey to Charles D. Nixon, in trust to secure the payment of a promissory note of $3,000, payable to Charles T. Kelsey, and praying that plaintiff's title be adjudged paramount to that conveyed by the deed of trust. The cause was tried at the June term, 1896, of the Saline circuit court, where it had been taken on change of venue, and resulted in a dismissal of plaintiff's bill, to reverse which plaintiff has brought the case to this court by appeal.

Wm. M. Williams and John Cosgrove, for appellant. Silver & Brown and B. R. Richardson, for respondents.

ROBINSON, J.

The amended petition upon which the case was tried alleges, in substance, that plaintiff purchased the land embraced in the deed of trust in question at a sale under several executions issued upon judgments in favor of C. H. Knoop and another against J. B. Kelsey, made by the sheriff of Morgan county, Mo., during the October term, 1883, of the Morgan circuit court; that said judgments were rendered in attachment proceedings against the property of J. B. Kelsey begun August 23, 1882; that personal service was made in each of the attachment suits upon said J. B. Kelsey, and said real estate levied upon by the sheriff under the several writs of attachment; that plaintiff's purchase of the land in controversy vested in him all the right, title, and interest J. B. Kelsey had therein on August 23, 1882; that said J. B. Kelsey pretended to make a deed of trust thereon to secure a pretended indebtedness of $3,000 to his brother Charles T. Kelsey, of Tompkins county, N. Y., dated July 22, 1882, but that it was not delivered to said Charles T. Kelsey until after the seizure of said land upon writs of attachment in the several suits; that the deed of trust was filed for record in the recorder's office of Morgan county by J. B. Kelsey before any of the attachment writs were levied; that after it was recorded it was redelivered to J. B. Kelsey, and by him controlled until September 1, 1892, when he delivered it to his brother Charles T. Kelsey, in New York; that the levies of the several writs of attachment became liens upon the said land prior to the delivery of the deed of trust to Nixon and Charles T. Kelsey; that the deed of trust was executed without any consideration whatever; that Charles T. Kelsey is the brother of J. B. Kelsey, and Nixon is a cousin of both J. B. Kelsey and Charles T. Kelsey, with whom he sustained confidential relations; that the note and deed of trust were fraudulent transactions as against the creditors of J. B. Kelsey, and part of a scheme to defraud the creditors of the latter, who, it is alleged, at the date thereof, was largely indebted and in failing circumstances, and that the making of said deed of trust was in furtherance of such scheme; that, as the deed of trust was recorded prior in point of time to the levy of the several writs of attachment, it cast a cloud upon the plaintiff's title, and was apparently a prior lien; that plaintiff's title was, in right and equity, of prior date to the deed of trust. The prayer of the petition is that the deed of trust be canceled, set aside, and for naught held, and that the same be decreed to have been executed in fraud of the creditors of J. B. Kelsey; and that plaintiff's title be decreed prior and superior to any right or interest conveyed by the deed of trust, and for general relief. The defendants answered jointly, denying generally the allegations of the petition, and set up and interposed the 10-years statute of limitations as a defense to the ground of action that the deed of trust was not delivered until after the alleged attachment liens accrued, and pleaded the answer of plaintiff filed in the Morgan circuit court in the case of C. H. Knoop against C. F. Nixon, J. B. Kelsey, Charles T. Kelsey, and himself, wherein he then averred and claimed that the land purchased by him was subject to the incumbrance of the deed of trust now in controversy, and that he was then ready and willing to pay same to whom the court should direct, and averred that the plaintiff purchased the land in controversy subject to the deed of trust the validity of which is assailed by plaintiff in this case; that plaintiff purchased only the equity of redemption of J. B. Kelsey in said land; that, from the notice of sale and the oral proclamation made by the sheriff thereat, the latter sold only the equity of redemption, and that the plaintiff had consequently purchased only that interest, and for more than 10 years had claimed no greater interest. The answer further averred that the election of Knoop to sell, and plaintiff to purchase, the equity of redemption only, and failure of plaintiff to make any other claim prior to the filing of this amended petition herein on August 7, 1894, effectually barred the plaintiff from the relief sought. The reply denied the new matter contained in defendants' answer.

Plaintiff contends that the note and deed of trust in question were fraudulent transactions against the creditors of J. B. Kelsey, and consequently, as purchaser of the mortgaged premises at sheriff's sale, he is entitled to have the same set aside and removed as a cloud cast upon his title, and the defendants perpetually enjoined from proceeding thereon. In this connection, counsel for plaintiff...