Jacobs v. Smith
| Decision Date | 15 November 1886 |
| Citation | 2 S.W. 13,89 Mo. 673 |
| Parties | Jacobs et al. v. Smith et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from Barton Circuit Court. -- Hon. Chas. G. Burton, Judge.
Reversed.
Robinson & Harkless for appellants.
(1) The evidence fails to show that the transaction between Catharine and William Sharp was fraudulent. Vide Rumbolds v Parr, 51 Mo. 592. (2) The court erred in admitting improper evidence over defendants' objections. (3) There was no evidence tending to show that the sixteen hundred dollar note ever went into the Webb City property. (4) Shapley is not bound by the lis pendens at all, and even though the court should find against defendant, Shapley, as to part, yet the court should not have charged the property with any more or greater debt than was claimed by the petition at the time of the filing of the lis pendens, that is to say, with the Cherry and Davis claim. On this point there is no conflict as to facts. It was conceded that at the time Shapley purchased under the foreclosure, that Cherry and Davis were not parties to this suit, and that they were not mentioned in the lis pendens. Hence the only question raised is, can plaintiffs come in and amend a petition, adding new parties, and increasing the amount claimed more than double and enforce it against Shapley, who had purchased long prior. The enforcement of the rule in lis pendens does not proceed upon the ground that the purchaser has been guilty of fraud. Wade on Notice, sec. 350; Mead v. Lord Orrery, 3 Atk. 235. The section of the statute (R. S., sec. 3217) providing for a lis pendens was never intended to apply to an incumbrance taken to secure a debt previously contracted in good faith, and if this be so then Johnson had the right to foreclose and Shapley or any one else had the right to purchase. Wade on Notice, sec. 360. Mr. Johnson took the mortgage before the service of process and hence was not affected by the lis pendens. Herrington v. Herrington, 27 Mo. 560. (5) Shapley was only bound by what appeared from the pleadings at the date of his foreclosure mortgage. This proceeding is one to charge the land with certain and specified debts and the petition points out what they are and with these only is Shapley chargeable if at all. Ray v. Roe, 2 Blackf. 258; 3 Atk. 392; Schmidt v. Smith, 106 U. S; 97 Pa. St. 153; 4 Minn. 461; Stone v. Connelly, 1 Met. [Ky.] 654; Jones v. Lusk, 2 Met. [Ky.] 358. A rule that a purchaser, because he has notice of one or two debts, by lis pendens, must thereby be at the mercy of everybody is manifestly unjust. Terrel v. Andrew Co., 44 Mo. 309; Hopkins v. Garrard, 7 B. Monroe, 312. (6) The judgment is clearly wrong in making Shapley account for past rents and profits. Newham v. Kenton, 79 Mo. 382; Wade on Notice, sec. 375; Fithian v. Monks, 43 Mo. 502; Gamble v. Johnson, 9 Mo. 597.
Harding & Buler for respondent.
(1) The deeds made by Sharp to his daughter, October 20, 1874, conveying southwest section 13, and all of section 14, township 30, range 29, were voluntary, and, therefore, fraudulent as to these plaintiffs, all of whom, except Simpson (Vanosdell's intestate), were creditors at that time. A voluntary conveyance is fraudulent per se as to existing creditors. Potter v. McDowell, 31 Mo. 62; Patton v. Casey, 57 Mo. 118. (2) The Gibson note for sixteen hundred dollars was a gift, as shown by the testimony of Gibson, who says he bought the land of Sharp, and that he (Sharp) had the note made payable to his daughter, claiming that he was giving it to her, as he had already given all his other children as much as he wanted them to have. It was, therefore, likewise fraudulent as to all of these plaintiffs, who were then existing creditors. Such declarations are competent evidence. Bump on Fraud. Conv., 543; Potter v. McDowell, 31 Mo. 62; Gamble v. Johnson, 9 Mo. 605. And such a transaction is fraudulent per se. Reppy v. Reppy, 46 Mo. 570. (3) The mere production by defendants of their receipt and contract was not sufficient to prove that there was any valuable consideration. It is as easy to manufacture a bogus note or receipt, or a sham contract, as a fraudulent deed, and such documents, by themselves, prove nothing. Bump on Fraud. Conv., 95. (4) Catherine being a mere voluntary and fraudulent grantee, held as trustee for her father's creditors, and when she exchanged it for other property, such other property stands in its stead, subject to the same liability. Sloan v. Torry, 73 Mo. 623; Howe v. Waysman, 12 Mo. 169; Rutherford v. Williams, 42 Mo. 19 and 34; 2 Story Eq. Juris., secs. 1232, 1258, 1265. (5) The evidence of Gibson shows where she got the sixteen hundred dollar note. The deed shows where she got the Dade county land, and the evidence of Dermott, who was one of the parties to the trade, shows that the Webb City property was exchanged for that note and land. There is no dispute as to these points. If any of the testimony of Gibson or Dermott was hearsay it was as to a point not controverted, and that was established by abundance of other evidence and was, therefore, immaterial and no ground for reversal. Nelson v. Fisher, 66 Mo. 381 and 4; Gavisk v. Railroad, 49 Mo. 274. (6) Moreover the objections were general to the whole deposition, and not specific, and were properly overruled for that reason if no other. If any parts of the depositions were objectionable on the ground of hearsay, the particular parts ought to have been pointed out and the court requested to pass upon them. Webster v. Cameron, 40 Mo. 156; Gwin v. Gamanche, 25 Mo. 42; Wurlock v. Peterson, 58 Mo. 408. (7) There was no error in the decree in favor of Cherry and Davis, as against Shapley; he was a purchaser pendente lite, and took subject to any decree that might be made in the cause. Turner v. Babb, 60 Mo. 342, and cas. cit.; Real Estate Savings Institution v. Collonias, 63 Mo. 295; O'Reilly v. Nicholson, 45 Mo. 150. (8) Besides, being a purchaser pendente lite, he was a purchaser with notice of the alleged fraud. The notice of lis pendens was of record, and in the chain of title, and all subsequent purchasers are bound to know of it and its contents. Digman v. McCollum, 47 Mo. 372. The notice said that the suit was to subject the lots to the payment of the debts of Wm. Sharp, deceased. That certainly was sufficient to put Shapley on inquiry and make him a purchaser with notice of the fraud. He would clearly have been subject to a new suit by Cherry and Davis, and if so, why not to the decree in this case? Bobb v. Woodward, 50 Mo. 100, and cases cited; Sloan v. Torry, 73 Mo. 623; Allen v. Berry, 50 Mo. 90. (9) The decree against Shapley, requiring him to account for and pay over the rents and profits, may have, and probably did astonish both him and his counsel, as they say. Nevertheless, it is strictly in accordance with law, and the practice in such cases as well as consonant with the abstract principles of justice. See Bump on Fraud Conv., pp. 569 and 570, and cas. cit. (10) This case is covered with badges of fraud. Bump on Fraud. Convey., 78, 79, 80, 81, 82, 86, 90, 92, 94, 95, 96.
OPINION
This was a suit in the nature of a creditor's bill commenced in the circuit court of Jasper county on October 23, 1877, by the plaintiffs, Jacobs, Gibbs, Barker, Burkhart, and Simpson's administrator against Catherine Smith, her husband, and the legal representative of one William Sharp, deceased, to subject lots ten and nineteen in Webb's first addition to Webb City, in said county, in the hands of said Catherine, to the payment of the claims of said plaintiffs as creditors of said Sharp, deceased, on the ground that the property exchanged by said Catherine for said lots had been fraudulently conveyed by said Sharp to said Catherine, his daughter, while insolvent, with intent to cheat and defraud his creditors. On the same day said plaintiffs also filed for record with the recorder of deeds for said county, the statutory notice of the pendency of said suit, as required by section 3217, Revised Statutes of 1879, p. 542. Afterwards, on January 17, 1878, said Catherine and her husband gave a mortgage with power of sale on said lot nineteen, to one Johnson, to secure a note for $ 79.50, due in thirty days; and at a sale thereof under said mortgage, on May 27 thereafter, one Shapley purchased said lot nineteen, and received a deed therefor, reciting a consideration of one hundred dollars.
After this, said suit was regularly transferred to the circuit court of Barton county, and, thereafter, at the April term, 1881, of said court, the firm of "Cherry & Davis," also creditors of said Sharp, in a separate and distinct claim, caused themselves to be added as parties plaintiffs to said pending suit; and at the same time said plaintiffs also caused said Shapley to be made a party defendant; and the said Catherine having died insolvent her legal representatives were also brought in as parties defendant, and thereupon an amended petition was filed accordingly. Subsequently, at the April term, 1882, another amended petition was filed, upon which the case was finally tried.
This petition, in its general scope and object, was similar to the original petition, except as before stated, that it incorporated said Cherry & Davis as a new party plaintiff with a separate and distinct claim (nearly three times as large as the aggregate amount of all five of the original plaintiffs), to said pending suit; and also made said Shapley, and the legal representatives of said Catherine deceased, new parties defendant; and then proceeds to charge, in substance, that Shapley's said purchase of said lot nineteen, with the hotel property thereon, was made in May, 1878, long after the commencement of the suit, and with full...
To continue reading
Request your trial