Jones v. Hogan

• Decision Date: 26 January 1909
• Citation: 116 S.W. 21,135 Mo.App. 347
• Parties: JONES, Trustee in Bankruptcy of the Estate of HOGAN, Respondent, v. HOGAN, Appellant
• Court: Missouri Court of Appeals

116 S.W. 21

135 Mo.App. 347

JONES, Trustee in Bankruptcy of the Estate of HOGAN, Respondent, v. HOGAN, Appellant

Court of Appeals of Missouri, St. Louis

January 26, 1909

[Copyrighted Material Omitted]

Appeal from St. Louis City Circuit Court.--Hon. J. T. McElhinney Judge.

REVERSED AND REMANDED (with directions).

STATEMENT.--This is a suit in equity wherein the court below charged lots 25 and 26 of Brown Place, a subdivision of St. Louis county shown by a plat in the office of the recorder of deeds of said county, with a lien for $ 2,200. The suit was instituted by the trustee in bankruptcy of the estate of Robert G Hogan, defendant's husband, who had been adjudged a bankrupt, for the purpose of having a conveyance to defendant of the title to said premises held fraudulent and void as against said trustee and defendant declared to hold the title for the use and benefit of her husband Robert G. Hogan, and to have the title vested in plaintiff as trustee in bankruptcy for the benefit of said Hogan's creditors. As said, the suit resulted, not in a divestiture of the title out of defendant, but in laying a lien on it to the amount aforesaid. This appeal was prosecuted from the decree. Robert G. Hogan and Cornelia Hogan were married in 1880, and have lived together as husband and wife since then. She had no means of her own at any time during her married life save what were given to her by her husband or acquired for her by him. Various financial transactions between the husband and wife are gone into in the evidence, but all of them will be omitted except such as touch the question involved in this appeal. Hogan became insolvent in 1897, and remained so until he was adjudged a bankrupt on his voluntary petition September 15, 1903, the proceeding in which plaintiff Jones was appointed trustee in bankruptcy. In 1892 and while Hogan was solvent, his wife executed a deed of trust on their home, the title to which stood in her name, to realize $ 4,000 for Hogan's use in the coffee business which he was conducting under the style of Robert G. Hogan & Co. In return he executed a note by said firm style to his wife (defendant) for $ 4,000, payable on demand, with six per cent interest from date, to protect her against loss on account of the deed of trust she had given to raise money for him. Said deed of trust was taken up by another placed on the home and finally she lost the place by the foreclosure of a certain deed of trust she and Hogan had put upon it; either the one given for his benefit, or another. In September, 1894, Hogan purchased another home in Webster Groves, the title to which was put in defendant's name, he paying $ 2,000 in cash on the purchase price and he and his wife executing a deed of trust for the balance of $ 6,000. Said property was sold May 15, 1901, and the buyer paid off liens and incumbrances to an amount which exhausted all but $ 1,300 of the price. In May, 1901, the lots in dispute, to-wit, lots 25 and 26 of Brown's Place, were bought by Hogan and wife for $ 10,800, on which price the said $ 1,300 in cash realized from the sale of the second home, was paid, as also $ 500 of Hogan's money, and a deed of trust was given for the balance. On this balance Hogan afterwards paid $ 1,000 principal, interest to the amount of $ 900, taxes to the amount of $ 300, insurance premiums amounting to $ 100 and $ 900 for improvements on the land. The $ 1,300 and the two sums of $ 500 and $ 1,000 paid by Hogan, were treated by both him and defendant as payments on the note for $ 4,000 she held against Hogan & Co. (really no one but her husband) and credits were indorsed on the note for said sums. The court below upheld as valid, the payments of $ 1,300 realized out of the proceeds of the former home of defendant and $ 500 paid by Hogan, both of which were made at the time of the purchase, and also the payment of $ 1,000 made by him December 1, 1902, on the principal. This ruling appears to have been put on the ground that Hogan and his wife had regarded said sums as payments on his debt to her, which debt was treated as bona fide, it having been incurred while Hogan was yet solvent. But the court found the other payments made by Hogan subsequent to the purchase of the lots in controversy, to-wit, $ 900 for improvements, $ 900 for interest on the unpaid purchase price, $ 300 for taxes and $ 100 for insurance premiums, which were all made after May 1, 1901, "were made with the intent on his part to hinder, delay and defraud his creditors and she (defendant) had knowledge thereof and accepted the same with the same intent." It was found, too, that in the various purchases in the name of his wife prior to 1897 when his insolvency began, Hogan had no intention to hinder, delay or defraud his creditors, but that the purchases for and the conveyances to defendant were voluntary. Defendant testified her husband did not wish to buy a home, saying it was easier to pay rent; but as she was anxious for a home, he made an agreement with her that she should have one and he would pay the taxes, insurance premiums, cost of repairs and interest on the unpaid purchase money in lieu of paying rent to some one else. This agreement is set up in his answer as a defense. A reasonable per annum rental for the house, considering its cost likely would be about $ 1,000 and Hogan was earning $ 5,000 a year and in some years he is said to have earned as much as $ 18,000.

The portions of the findings of the court we deem material are as follows, and the decree was in accordance with them:

"On May 1, 1901, the defendant and her husband purchased the property in dispute, in this county for the sum of $ 10,800 paying for it said sum of $ 1,300 held by defendant, and $ 500 of the husband's money, and giving a deed of trust for $ 9,000, balance on the purchase money. The husband has paid on December 1, 1902, $ 1,000 on the principal of this $ 9,000 debt, and has paid $ 900 on improvements on the land, all the interest notes at $ 225 each six months, except those due November 1, 1903, and May 1, 1904, amounting to about $ 900 so paid, and all the taxes except for 1903, amounting to $ 300 so paid, and also insurance $ 100.

"All the foregoing purchases, conveyances, payments and transactions were made, had and negotiated by said Robert G. Hogan, the said defendant joining in the same and signing and executing papers when required so to do by him, but taking no other part in said transactions.

"Said sums of $ 1,300, $ 500 and $ 1,000 paid by said Hogan on the purchase price of said land, have been treated by him and defendant as payments on said $ 4,000 note of Robert G. Hogan & Co. and credits have been endorsed thereon for the same shortly after the times of such payments, respectively. The said payment of $ 1,800 was endorsed in the latter part of June, 1901. They have also endorsed a credit for $ 500 November 17, 1902, for money paid by him for a carriage and team for defendant.

"No payment made prior to May 1, 1901, by said Robert G. Hogan on behalf of defendant or for her property and no payment made thereafter except said payments of $ 1,800 and $ 1,000, was intended by them or either of them as payment on account of her said note for $ 4,000.

"Said lots of land were purchased for the defendant as aforesaid at her request for a home for the family of herself and said Robert G. Hogan; he preferring to rent a home but consenting upon her request to purchase a home, and instead of rent to pay interest, and premiums on loans and taxes, insurance and repairs on the property.

"On May 21, 1903, the said Robert G. Hogan purchased for said defendant Cornelia S. Hogan, seventy shares of stock in the Frisco Land Syndicate, of the par value of $ 700. But it does not appear what price was paid for the same.

"Said Robert G. Hogan became indebted in 1897 for debts aggregating at least the sum of $ 8,534.64; which remain unpaid and have been allowed against his bankrupt estate. He has been insolvent since that time, at least. He became a bankrupt on his voluntary petition September 15, 1903, and the plaintiff has been duly chosen and qualified trustee of his bankrupt estate since October 5, 1903.

"The defendant Cornelia S. Hogan had notice of his insolvency at least as early as July 22, 1898.

"There is no evidence of any intent on the part of said Robert G. Hogan to hinder, delay or defraud his said creditors prior to the year 1897; although all said purchases for the defendant and conveyances to her and payments for her and her property were voluntary upon his part and without valuable consideration from her.

"The effect of all such payments by the said Robert G. Hogan for property of the defendant after July, 1897, was to hinder and delay his said creditors; and the said defendant had notice thereof from and after July 22, 1898. Said payments of $ 1,800 and $ 1,000 were made and applied between them in part payment of said note of Hogan and Company to the defendant. The other payments made by the said Robert G. Hogan for and on account of said property after May 1, 1901, were made with the intent on his part to hinder, delay and defraud his creditors, and she had knowledge thereof and accepted the same with the same intent.

"The court sustained defendant's objection to said Robert G. Hogan's schedule of debts filed in his said bankruptcy proceedings, and his affidavit to the same, and strikes out the same and does not consider the same in the evidence, in making the foregoing finding of facts.

"Upon the foregoing facts the court further finds, as matter and conclusion of law, as follows:

"The transfers and purchases by said Robert G. Hogan to and for the said Cornelia S. Hogan, of said real estate on Compton Avenue on September 11, 1885, and...