Johnson v. Stebbins-Thompson Realty Co.

• Decision Date: 17 November 1903
• Citation: Johnson v. Stebbins-Thompson Realty Co., 177 Mo. 581, 76 S.W. 1021 (Mo. 1903)
• Parties: JOHNSON v. STEBBINS-THOMPSON REALTY CO. et al.
• Court: Missouri Supreme Court

76 S.W. 1021

177 Mo. 581

JOHNSON v. STEBBINS-THOMPSON REALTY CO. et al.

Supreme Court of Missouri, Division No. 2.

November 17, 1903.

FRAUDULENT CONVEYANCE—RES JUDICATA—EVIDENCE.

1. Evidence in a suit by a judgment creditor to set aside a deed from a corporation to its president held sufficient to sustain a finding that the deed was given without consideration.

2. In a suit to set aside a deed from a corporation to its president, to enforce a judgment against the corporation by execution on the land, he cannot set up defenses to the judgment, nor question its validity as obtained by fraud.

3. A voluntary grantee with knowledge of the facts is a privy to a judgment against his grantor, so that he has no right to go back of the judgment and set up defenses to the claim on which it is based.

Appeal from Circuit Court, St. Louis County; John W. McElhinney, Judge.

Suit by James B. Johnson against the Stebbins-Thompson Realty Company and others. From a decree in favor of the plaintiff, defendants appeal. Affirmed.

"This case has been before this court on an appeal by James B. Johnson, from a judgment rendered against him in the circuit court of the county of St. Louis, and which is reported in 167 Mo. 325, 66 S. W. 933. The case at that time was not orally argued on behalf of the then respondents. It is a suit in equity by plaintiff, a judgment creditor of the defendant Stebbins-Thompson Realty Company, a corporation, to set aside a deed made on the 20th of February, 1897, by that corporation to a tract of land therein described, situated in the county of St. Louis, state of Missouri, to Judson M. Thompson, appellant, upon the ground that it was a voluntary conveyance, and a fraud on the creditors of the Realty Company, especially the plaintiff. The petition alleges that the defendant, on November 25, 1896, obtained a judgment in the circuit court of the city of St. Louis against the Stebbins-Thompson Realty Company for the sum of $1,936.21; that an execution issued out of the circuit court of the city of St. Louis, and was returned nulla bona February 1, 1897; that at the date of rendering the judgment aforesaid defendant the realty company was the owner of certain parcels of land in St. Louis county, in the petition described; that on or about the 20th day of February, 1897, the realty company, with a view and intent to hinder, delay, and defraud its creditors, and especially the plaintiff, conveyed said lands to the defendant Judson M. Thompson for the pretended consideration of $1,000; that said defendant Judson M. Thompson immediately upon the execution and delivery of said deed took possession of the property, and has ever since been in possession; that no consideration passed to the realty company, but that the conveyance was a voluntary one, and without consideration, and made for the purpose of hindering, defrauding, and delaying the creditors of the realty company, of which purpose the said Judson M. Thompson was fully cognizant at the time said conveyance was made; that at the time said J. M. Thompson was president of the realty company, and as such conveyed the land to himself, without the authority of the board of directors; that on the 18th day of March, 1897, an execution was issued out of the circuit court of the city of St. Louis upon said judgment, directed to the sheriff of the county of St. Louis, and said sheriff levied upon the said real estate, and, having advertised the same in accordance with law, on the 7th day of June, 1897, sold it at public auction to the plaintiff under said execution, and on the 25th day of June, 1897, the sheriff acknowledged the deed to the plaintiff in open court; that on September 23, 1897, J. M. Thompson made an affidavit that the corporation was on the 22d day of September, 1897, by a majority vote of its stockholders, duly dissolved, which affidavit was on the 24th day of September, filed in the office of the Secretary of State; that on said 22d day of September the said directors of the said realty company were Judson M. Thompson, Frank C. Thompson, and Lovell W. Stebbins; and the bill then prayed that the conveyance from the realty company to Judson M. Thompson be adjudged fraudulent and void as against the plaintiff, and be set aside, and that said property be declared to be the property of plaintiff, James B. Johnson, and defendant be enjoined and restrained from selling or disposing of the property.

"The answer of Judson M. Thompson and Frank C. Thompson, two of the trustees of the former realty company, set forth that the realty company was dissolved on the 24th of September, 1897. They admitted that on the 25th of November, 1896, plaintiff obtained a judgment against the realty company in the circuit court of the city of St. Louis, as alleged in the petition, and that said realty company was the owner of the property described in the petition, and conveyed same to Judson M. Thompson. They also admitted that on the 25th of September, 1897, Judson M. Thompson made the affidavit that the realty company had been dissolved by a majority vote of its stockholders, and filed the affidavit in the office of the Secretary of State. And they allege that the conveyance to Judson M. Thompson was made by the realty company in good faith, without fraud, for a full and valid consideration, and without the intent to hinder, defraud, or delay any person whatsoever; that Judson M. Thompson had, long before the date of plaintiff's judgment, advanced to the realty company the money with which the property was purchased, and that at the date of plaintiff's judgment the realty company was still indebted to said Thompson for the purchase money of said land, and conveyed the land to him in consideration of its debt, as it had a right to do; that at the date of the judgment and conveyance all of the stock of the realty company was owned by Judson M. Thompson and Frank C. Thompson; that the corporation was not indebted to any other person than said Judson M. Thompson whatsoever; and that the judgment obtained by plaintiff against the realty company was obtained by fraud, accident, and surprise, and there was no obligation or honest indebtedness to sustain same. Further answering by way of cross-bill, the defendants allege that on the 15th day of April, 1893, the Suburban Realty Company, a corporation existing under the laws of the state of Missouri, executed as maker a note for $1,500 at 90 days, to the order of L. W. Stebbins, treasurer, with interest from maturity at 8 per cent. per annum, but retained the same in its own custody, and never delivered the same at any time; that while so in its (Suburban Realty Company's) custody, and undelivered, it was purloined and abstracted, and secretly and surreptitiously sold by said Stebbins to the plaintiff for an inadequate sum, to wit, for the sum of $1,125; that said plaintiff, Johnson, at the time had notice of these facts, was not a bona fide purchaser for value of the note, and did not acquire the same in the usual course of business; that at the time the note came into possession of plaintiff, Johnson, it purported to have on it the names of the defendants Frank C. Thompson and Frank T. Parker, who had written their names on the back as indorsers, and not as joint makers, under the express understanding and agreement between them and the maker that said note should not be negotiated or delivered until indorsed by certain other specified persons; and while in the custody of the said corporation (Suburban Realty Company), and being held undelivered under said agreement, it was stolen by said Stebbins as aforesaid, and sold to the said Johnson as aforesaid, without the knowledge or consent of said indorsers for said company (Suburban Realty Company); that said Stebbins was then also the treasurer of the Stebbins-Thompson Realty Company, and at the time of the sale by him to said plaintiff, J. B. Johnson, at the instigation and demand of said Johnson, without consideration of any kind to it moving, without the authority of its directors or any of its officers, he placed the name of Stebbins-Thompson Realty Company on the back of said note, in the presence of said Johnson, who well knew at the time that said Stebbins-Thompson Realty Company had nothing to do with the note or its consideration, and that it was a gross breach of trust in Stebbins to use its name in this way; that said plaintiff, Johnson, knowing all these facts, had a small judgment against said Stebbins personally, and, knowing that Stebbins was treasurer of the Suburban Realty Company, and the proceeds of the note should be company property, prompted and tempted him to convert the proceeds of the note to his own use to the extent of paying this personal debt to him out of the trust fund, and, further, that on the 6th day of November, 1893, the plaintiff, Johnson, brought an action against the Suburban Realty Company, Frank C. Thompson, and Frank T. Parker, upon the note in question, in the circuit court of the city of St. Louis, and defendants pleaded the facts before mentioned in defense thereto. The case came on for trial, and plaintiff dismissed the case as to Stebbins-Thompson Realty Company; and after the trial a verdict was rendered in favor of the defendants in that case, and it was affirmed by the St. Louis Court of Appeals on the 4th day of May, 1895. Then the answer sets out that Johnson instituted a new action against Stebbins-Thompson Realty Company; that at the time he instituted such action the judgment against Johnson, affirmed in the St. Louis court of appeals, had completely released and discharged Stebbins-Thompson Realty Company from all liability on the note, and was a complete defense to any action thereon.

"The separate answer of Judson M. Thompson sets out substantially the same defenses, and furthermore alleges that the said note for $1,525, made by the Suburban Realty Company, was never delivered by the Suburban Realty Company,...