Johnson v. Stebbins-Thompson Realty Co.

• Decision Date: 25 February 1902
• Citation: 167 Mo. 325,66 S.W. 933
• Parties: JOHNSON v. STEBBINS-THOMPSON REALTY CO. et al.
• Court: Missouri Supreme Court

66 S.W. 933

167 Mo. 325

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

Supreme Court of Missouri, Division No. 2.

February 25, 1902.

FRAUDULENT CONVEYANCE — EVIDENCE — BURDEN OF PROOF — SUFFICIENCY — JUDGMENT — FRAUD — COLLATERAL ATTACK.

1. In an action to set aside an alleged fraudulent conveyance made by a corporation to its president, evidence considered, and held insufficient to show that any consideration therefor was paid by him, and that it was void as to creditors.

2. In an action by a judgment creditor to set aside an alleged fraudulent conveyance, the burden is on defendants to maintain an allegation that fraud was practiced by plaintiff in obtaining his judgment.

3. A corporation executed a note payable to its treasurer, and while it remained in his possession he without authority signed the name of the defendant company, in which he was also an officer, on its back, and sold it to plaintiff, who knew that he had no authority to sell it. The corporation never received any consideration for the sale. Plaintiff afterwards sued on the note. The suit was dismissed as to the defendant corporation, and judgment rendered in favor of the other defendants for want of authority. Afterwards plaintiff sued the defendant corporation on the note. Defendants' attorney testified that he was informed by plaintiff's counsel that the suit would not be prosecuted to judgment, and therefore filed a general denial. Plaintiff's counsel denied this statement. After two continuances the case was called for trial during the absence of defendants' attorney from the city, the matter taken up by plaintiff himself in the absence of his counsel, and judgment rendered against defendants. Held insufficient to show that the judgment was obtained by fraud.

4. In a suit by a judgment creditor to set aside an alleged fraudulent conveyance, neither the debtor nor his vendee can attack the judgment on the ground that the note on which it was founded was obtained by fraud.

Appeal from circuit court, St. Louis county; R. Hirzel, Judge.

Action by James B. Johnson against the Stebbins-Thompson Realty Company and others. Judgment for defendants, and plaintiff appeals. Reversed.

This is a suit in equity by plaintiff, a judgment creditor of the defendant Stebbins-Thompson Realty Company, a corporation, to set aside a deed to a tract of land, therein described, from said corporation to the defendant Judson Thompson, upon the grounds that it was a voluntary conveyance, and a fraud upon the creditors of the realty company, and especially the plaintiff. The petition alleges that the plaintiff, 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 $1,936.20, on which judgment an execution was issued, and returned nulla bona February 1, 1897; that at the time said execution was issued and returned the realty company was the owner of certain parcels and lots of land in said St. Louis county, in the petition described; that on February 20, 1897, the realty company, with the intent to hinder, delay, and defraud its creditors, and especially the plaintiff, conveyed said lands to defendant Judson M. Thompson for the pretended consideration of $1,000, and that the said J. M. Thompson thereupon took possession of said property; that in fact no consideration was paid, and the deed was purely voluntary; that at the time the said J. M. Thompson was president of the realty company, and as such conveyed the land to himself, without authority from the board of directors; that in March, 1897, an alias execution was issued on said judgment of the plaintiff to the sheriff of this county, and the lands aforesaid were sold at public sale under said execution and purchased by plaintiff on June 25, 1897, and on September 23, 1897, the said J. M. Thompson filed his affidavit, stating that the realty company by a majority vote of its stockholders has been dissolved as a corporation. The bill asks that the conveyance aforesaid to J. M. Thompson may be adjudged fraudulent and void, and that the same be set aside, and that defendant may be enjoined and restrained from selling and disposing of the property. The answer of Judson M. Thompson and Frank C. Thompson, two of the trustees of the former realty company, sets forth that said realty company was dissolved in September, 1897. It then admits the judgment obtained by plaintiff, and the conveyance to J. M. Thompson, and states that the latter was made for a full and valid consideration; that defendant J. M. Thompson had advanced to the realty company the purchase price for the land, and that at the time the plaintiff obtained his judgment the realty company was indebted to J. M. Thompson for the purchase price of the land, and said realty company was at that time not indebted to any other person, except J. M. Thompson, and he and his codefendant Frank C. Thompson were then and there the owners of all the stock in said realty company; and that the plaintiff's judgment against said realty company was obtained by fraud and surprise, and there was no obligation or honest indebtedness to pay the same. Further answering, and by way of cross bill, defendants allege in detail and quite elaborately that the note upon which the aforesaid judgment was obtained was a fraud on the realty company and other indorsers, as well as the original maker of the note; that the note was in fact stolen by defendant Stebbins, and wrongfully and without authority indorsed by him for and in behalf of the Stebbins-Thompson Realty Company, and without their knowledge or consent; that when plaintiff bought this note he knew all these facts, and did not pay full consideration for it; that suit was brought on this very note by the plaintiff against the Suburban Realty Company, the original maker, and Parker and Thompson, as indorsers, and also against the Stebbins-Thompson Realty Company as indorser, but dismissed as to the latter before trial; and that in said suit judgment was rendered for the defendants in said cause, upon showing these facts upon the trial in court, and the same was afterwards affirmed in the St. Louis court of appeals on the 4th day of May, 1895, and by reason of said trial and judgment the Stebbins-Thompson Realty Company was completely discharged and released, and the same became adjudicated as to said realty company. For a further defense these defendants allege that the plaintiff obtained the aforesaid judgment against the Stebbins-Thompson Realty Company by deceit, and false and fraudulent contrivances; that plaintiff's attorney, by cunning and false representations, deceived the attorney for the defendants, he also being then and there the attorney for the realty company in said suit, and obtained a judgment upon said note during his absence from the city of St. Louis. The allegations of new matter are generally denied by the plaintiff in his replication herein filed. Although the defendant Stebbins entered his voluntary appearance, he did not answer. Judson M. and Frank C. Thompson answered jointly, and Judson M. Thompson also filed a separate answer. Judson M. Thompson and Frank C. Thompson, his son, and Stebbins, composed the board of directors. The trial resulted in judgment for defendants, from which plaintiff appeals.

W. B. Homer, for appellant. Given Campbell, for respondents.

BURGESS, J. (after stating the facts).

The salient facts are about as follows:

On the 25th of November, 1896, in the circuit court of the city of St. Louis, judgment was rendered in favor of plaintiff, and against defendant Stebbins-Thompson Realty Company, for the sum of $1,936.20, and execution was issued out of the circuit court of the city of St. Louis, and directed to the sheriff of the city of St. Louis, which was returned, "No property found." At the date of said judgment the Stebbins-Thompson Realty Company was the owner of certain property situated in the county of St. Louis, and on the 20th of February, 1897, this company caused a deed to be recorded purporting to convey said real estate from said corporation to Judson M. Thompson, president of the corporation; the deed being executed by Thompson as president. On the 20th of February a record of a meeting was entered in the minute book of the corporation, which is spoken of as a special meeting of the directors, at which were present Judson M. Thompson and F. C. Thompson, and the deed was authorized by Judson M. and F. C. Thompson. The third member of the board of directors was not present, nor was he notified. On the 18th of March, 1897, 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, under which execution the property was sold and purchased by the plaintiff. On the 23d of September, 1897, Judson M. Thompson, defendant, made an affidavit that said corporation was dissolved by a majority vote of its stockholders, which was filed with the secretary of state. At the time of signing the note upon which the judgment was rendered under which the land in question was sold, there was another company, called the Suburban Realty Company, of which the defendant F. C. Thompson was secretary, Lovell W. Stebbins treasurer, and George T. Parker president. This company, on the 17th day of April, 1893, made its note for $1,525, payable 90 days after its date, to the order of Stebbins as treasurer, which was indorsed by Parker and F. C. Thompson conditionally, and by Stebbins individually. The note was never delivered by the Suburban Realty Company to any other person, and while it remained in the possession of Stebbins as the treasurer of the company he wrote the name of the Stebbins-Thompson Realty Company on the back of the note, and sold it to the plaintiff, James B. Johnson, who had full knowledge of the fact that it was the property of defendant company and that Stebbins had no authority to sell...