Judson v. Walker
| Decision Date | 14 March 1900 |
| Parties | JUDSON, Appellant, v. WALKER et al., Appellants; HAX et al., Appellants v. WALKER et al., Appellants; FIRST NATIONAL BANK v. WALKER et al., Appellants; SCHUSTER-HAX NATIONAL BANK v. WALKER et al., Appellants; SPENCER v. WALKER et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from Buchanan Circuit Court. -- Hon. Thomas H. Parrish Judge.
Reversed and remanded (with directions).
Johnson Rusk & Stringfellow for appellants, Judson and Hax.
(1) The children had nothing to do with these policies or their proceeds. Baker v. Young, 47 Mo. 453; Reed v Painter, 129 Mo. 674. Defendant Woodson had a part of the money and was claiming the right to hold it as curator and Annie Walker had received a part of it and was claiming the right to it; on this account in order to settle these claims, they were made defendants. (2) J. W. Walker being dead and an administrator having no power to impeach a conveyance made by the deceased, a court of equity is the proper forum. 5 Ency. Pl. & Pr., 428, 429; George v. Williamson, 26 Mo. 190; Zoll v. Soper, 75 Mo. 460; Jackman v. Robinson, 64 Mo. 289; Central Natl. Bank v. Hume, 128 U.S. 195; Woehner Am. Law of Admr., sec. 296. It is a matter not of ancillary but of original jurisdiction in courts of equity. Kendall v. Creighton, 64 U.S. 90. (3) A voluntary conveyance made by an insolvent debtor is void as to pre-existing debts. Gamble v. Johnson, 9 Mo. 605; Snell v. Harrison, 104 Mo. 158; Snyder v. Free, 114 Mo. 360. Defendants practically concede this and claim protection under certain statutes of this State. The statutes relied on by them are sections 5851 and 5854, R. S. 1889. These statutes do not apply to these policies. They are enabling acts and should not be extended to cases not coming strictly within their terms. Charter Oak Life Ins. Co. v. Brant, 47 Mo. 419. None of the policies in question comes within the terms of section 5851, for none of them was taken out by Mrs. Walker either "in her own name or the name of a third person," and none of them is "for her sole use." Reed v. Painter, 129 Mo. 679. And furthermore the premiums are above the amount limited. Charter Oak Life Ins. Co. v. Brant, 47 Mo. 419; Stone v. Knickerbocker Life Ins. Co., 52 Ala. 518; Bliss on Life Ins. sec. 322; Merchts. & Miners Trans. Co. v. Borland, 31 A. 272. (4) A policy taken out in fraud of creditors may be reached by them just as may policies fraudulently assigned. Merchants & Miners Trans. Co. v. Borland, 31 A. 272. Where the statutes do not apply, fraudulent assignments of insurance policies are governed by the general laws touching fraudulent conveyances and may be set aside upon the same grounds as may other fraudulent conveyances. Pullis v. Robinson, 73 Mo. 201; Central Bank v. Hume, 128 U.S. 195; Barnes v. Vetterlien, 16 F. 218; Appeal of Elliott's Executors, 50 Pa. St. 75; Stokes v. Coffey, 8 Bush (Ky.) 533; Merchants & Miners Transp. Co. v. Borland, 31 A. 272; Fearn v. Ward, 80 Ala. 555; Anthracite Ins. Co. v. Sears, 109 Mass. 383. (5) We further contend that not the premiums alone, nor the cash surrender value only, nor a part of the proceeds, but the whole thereof can be followed by the creditors. Taylor v. Coern, 1 Ch. D. 636; Pullis v. Robison, 73 Mo. 201.
Frank Hagerman, Thos. J. Porter and B. R. Vineyard for appellants, Mary V. Walker, Annie Walker and Stephen C. Woodson.
(1) To reach the interests of the minor children, of whose estates the defendant, Stephen C. Woodson, was curator, the proceedings should have been against them personally. They were necessary parties, and the objection of Woodson to the introduction of any evidence as against him should have been sustained. Gregory v. Stetson, 133 U.S. 586; Speakman v. Tatum, 45 N.J.Eq. 390; Butler v. Lawson, 72 Mo. 246. The grantee in a fraudulent conveyance is a necessary party defendant in a suit to set it aside. Jackman v. Robinson, 64 Mo. 289; Dillon v. Bates, 39 Mo. 292; Lilly v. Menke, 126 Mo. 190. (2) The curator could not in any way have entered the appearance of the minors, nor bound them or their interests by any act on his part. Gibson v. Chouteau, 39 Mo. 565; Railroad v. Campbell, 62 Mo. 585; Fisher v. Seekmann, 125 Mo. 165. (3) The insurance companies were not made parties to the suits, though in fact parties to the contracts on which the money had been paid. The court had no power to set aside the transfers of the policies without the companies being before the court. Besides, if any fraud had been perpretrated on the creditors by the transfers, its purpose had been accomplished, and the money was then in the hands of the fraudulent donees. In such case the remedy of the creditor, if he has any, for any part of the money paid, is by an action at law, the same as would be the garnishment of a fraudulent holder of personal property. Egerman v. Krieckhaus, 7 Mo.App. 456; Lackland v. Garresche, 56 Mo. 550; Humphreys v. Atlantic Co., 98 Mo. 550; Epstein v. Clothing Co., 67 Mo.App. 226; Gotcher v. Haefner, 107 Mo. 270. (4) And in such action at law each party should be sued alone for the money received by him or her. There should be no effort, as in this case, to hold the children liable for any part of the $ 10,000 collected exclusively by the mother from the Equitable Life Assurance Society. And in such action, either party would have the right to trial by jury, and no question could arise as to whether there should be a pro rata distribution among the creditors. The action would be one in assumpsit for money had and received. Magoffin v. Muldron, 12 Mo. 512; Clark v. Bank, 57 Mo.App. 285; Winningham v. Fancher, 52 Mo App. 458. (5) If we concede the method adopted to be correct, in arriving at the proper measure of damages, when suit is brought for the recovery of premiums fraudulently paid, we deny the right of a court to follow it, where the pleadings are framed as in these cases. The plaintiffs appealing simply seek to set aside the assignments -- not to recover for any part of the premiums paid. Such creditor can not recover the insurance money when paid. Kieley v. Hickcox, 70 Mo.App. 617; Thompson v. Cundiff, 11 Bush. 573; Forrester v. Gill, 53 P. 230; Pence v. Makepeace, 65 Ind. 485; State ex rel. v. Tomlison, 45 N.E. 1116; Wanschaff v. Ins. Co., 41 Mo.App. 206; Reed v. Painter, 129 Mo. 674. (6) Section 5854 of our statutes is in the nature of an exemption law, and like all statutes of that kind, and in fact like all laws for the preservation and support of the family is to be construed liberally so as to effectuate the benign spirit and purpose of the law. Wanschaff v. Ins. Co., 41 Mo.App. 206; Charter Oak Ins. Co. v. Grant, 47 Mo. 419; Stone v. Knickerbocker, 52 Ala. 589; Johnson v. Alexander, 125 Ind. 575; Emmerson v. Gould, 99 Mass. 155; Thompson v. Cundiff, 11 Bush. 573; Cole v. Marple, 98 Ill. 58; Elliott v. Bryan, 64 Md. 368; Earnshaw v. Stewart, 64 Md. 513; Gale v. McLaurens, 66 Miss. 461. It is accordingly held, that the proceeds of policies, so written as not to fall within the express provisions of the statute, are yet protected against the claims of creditors, on the ground that they are within the spirit of the law. Felrath v. Schonfield, 76 Ala. 199; Cole v. Marple, 98 Ill. 58; Succession of A Constant Hearing, 26 La. 326; Thompson v. Cundiff, 11 Bush. 573; In re McKinney, 15 F. 535. (7) A man, though insolvent, has a right, independent of statute, to make reasonable provision by securing life insurance for the benefit of his wife and children, who are dependent on him. His duty to his family in making provision for their maintenance, within reasonable limits, is just as high and binding as that to his creditor if not more so; and the State and society are equally concerned with himself in the rearing of his children, and in the support of them and his widow after his demise. It is for these reasons, that the general rule, which makes voluntary conveyances by an insolvent debtor presumably fraudulent and voidable as to creditors, can have no application to such cases as we are now considering. Stone v. Knickerbocker, 52 Ala. 589; Johnson v. Alexander, 125 Ind. 575; Pence v. Makepeace, 65 Ind. 345; State v. Tomlinson, 45 N.E. 1116; Cole v. Marple, 98 Ill. 58; Central Bank v. Hume, 128 U.S. 195; McCutcheon's Appeal, 99 Pa. St. 133; Weber v. Paxton, 48 Ohio St. 266; Warner v. Kosh, 4 Ill.App. 501; Emmerson v. Gould, 99 Mass. 155; Succession of A Constant Hearing, 26 La. 326; 2 Beach on Ins., sec. 1147; 2 Bigelow on Frauds, 129. And the assignment of a policy by the insured to his wife and children is tantamount to taking out a new policy in their names and for their benefit. Cole v. Marple, 98 Ill. 58; Thompson v. Cundiff, 11 Bush. 573; Succession of A. Constant Hearing, 26 La. 326.
Ben J. Woodson and Willard P. Hall for respondent, the First National Bank.
(1) The actions were necessarily in equity. There was no remedy at law. The theory upon which the suits were brought was that the assignments of the policies in January, 1894, by J. W Walker to his wife and children were fraudulent as to his then creditors, for the reason that at that time he was in embarrassed financial condition, and the assignments were purely voluntary. (a) A general creditor has no such interest in the property of his debtor as to enable him to follow the proceeds thereof in the hands of a fraudulent grantee in an action at law. Such a creditor may seize the property while still in the fraudulent grantee's hands as the property of the debtor, but he can not sue the fraudulent grantee for its value. He has no claim at law, against the fraudulent grantee. His remedy at law is limited strictly to the property itself. Adler v. Fenton, 24 How. 407; 1 Bigelow on Fraud, pp. 7, 69; vol....
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