Klauber v. Schloss

• Decision Date: 03 July 1906
• Citation: 95 S.W. 930,198 Mo. 502
• Parties: KLAUBER v. SCHLOSS et al., Appellants
• Court: Missouri Supreme Court

95 S.W. 930

198 Mo. 502

KLAUBER v. SCHLOSS et al., Appellants

Supreme Court of Missouri, Division Two

July 3, 1906

Appeal from St. Louis City Circuit Court. -- Hon. Jesse A. McDonald Judge.

Affirmed.

Christian F. Schneider for appellants.

(1) The court below having found that the deed of trust to defendant Braske was given to secure a bona-fide debt, it was error to set it aside unless actual fraud on part of defendant Braske was shown. Nat. Tube Works v. Ring, 118 Mo. 365; Bank v. Worthington, 145 Mo. 99; Ridge v Greenwell, 53 Mo.App. 479; Runbolds v. Parr, 51 Mo. 592; Steinwender v. Creath, 44 Mo.App. 363; Deering v. Collins, 38 Mo.App. 90; State v Gritzner, 134 Mo. 525; Bank v. Russey, 74 Mo.App. 656; Schawacker v. Ludington, 77 Mo.App. 415. (2) It being necessary to prove actual fraud on part of the defendant Braske to invalidate her deed of trust, a petition which fails to charge such fraud against her, and which fails to charge that the grantor of such deed at the time was insolvent, fails to state a cause of action against her. This is elementary. (3) The burden of proving fraud is on the party alleging it. Authorities under point 1; Bank v. Worthington, 145 Mo. 100. (4) Statements made by the grantor in a deed assailed as fraudulent, after the delivery of the deed, in the absence of the grantee, is incompetent evidence against her. Stam v. Smith, 183 Mo. 464; Mueller v. Weits, 56 Mo.App. 36. (5) A deed of trust for part present indebtedness and part future advances its valid. Smith v. Wallace Shoe Co., 63 Mo.App. 326; Foster v. Reynolds, 38 Mo.App. 553; Mapes v. Burns, 72 Mo.App. 411.

Lee W. Grant and Pierre B. Kennedy for respondent.

A conveyance may be for a valuable consideration, and yet fraudulent and void as to creditors. Murray v. Cason, 15 Mo. 378; Johnson v. Sullivan, 23 Mo. 474; State ex rel. v. Purcell, 131 Mo. 318. A consideration wholly disproportionate to the value of the property and paid to give color to the transaction is not a valuable consideration. Lionberger v. Baker, 88 Mo. 447; Imhoff & Co. v. McArthur, 146 Mo. 371. Although it devolves upon a party alleging fraud to prove it, yet the requisite proof need not be of a direct or positive character, but may be gathered from surrounding circumstances indicative of a design to hinder, delay or defraud creditors. Burgert v. Borchert, 59 Mo. 80; Albert v. Besel, 88 Mo. 154; Alberger v. White, 117 Mo. 361; Gordon v. Ismoy, 55 Mo.App. 323. Where a party makes a conveyance in alleged payment of a very vague and indefinite claim, it is a fair circumstance to be considered in determining the bona fides of the conveyance. Mason v. Perkins, 180 Mo. 709. Neither insolvency of the vendor nor knowledge thereof by the purchaser is a necessary ingredient in a fraudulent sale. Rupe v. Alkire, 77 Mo. 641.

OPINION

BURGESS, P. J.

On the 24th day of December, 1902, there was filed in the office of the clerk of the circuit court of the city of St. Louis, a petition by plaintiff, which, leaving off the formal parts, is as follows:

"Plaintiff for cause of action states that heretofore, to-wit, on or about the 9th day of November, 1899, he signed and executed as surety for Stephen Schloss, defendant, a certain appeal bond in an appeal from a judgment rendered against said Stephen Schloss by Frederick A. Cline, a justice of the peace in and for the Ninth district of the city of St. Louis, Missouri; that by reason of said contract of suretyship plaintiff was compelled to pay and did pay said judgment and costs, all amounting to $ 227, for which said amount he recovered judgment against the said Stephen Schloss on or about the 10th day of May, 1902, in the justice court in and for the Fifth Justice District of the city of St. Louis, Missouri, before James T. Spaulding, justice.

"Plaintiff further states that heretofore, to-wit, on or about the 27th day of January, 1896, defendant Schloss was the owner in fee simple of the following described real estate, situated in the city of St. Louis, Missouri, to-wit: A lot of ground in block No. 38, beginning at the intersection of the north line of Valentine street with the west line of a public alley running north and south through said block; thence north along the west line of said alley 86 feet; thence west and parallel with Valentine street 42 feet 6 inches to the east line of a private alley, thence south along the east line of said private alley 86 feet to the north line of Valentine street; thence east along the north line of Valentine street 42 feet 6 inches to place of beginning, together with all buildings, appurtenances, etc.

"That on or about the said 27th day of January, 1896, the said Stephen Schloss conveyed said property as hereinbefore described to defendant August Gehner, in trust, to secure an indebtness of $ 1,300, to one Frank Hiemenz; that thereafter, to-wit, on or about the 16th day of July, 1901, said Stephen Schloss executed a second deed of trust to the Missouri Trust Company, to secure an alleged indebtedness of $ 5,000 to defendant Veronicka Braske.

"Plaintiff further states that on or about the 18th day of September, 1902, defendant August Gehner, acting under and by virtue of said first deed of trust, sold the said property at public sale and said property was bid in by defendant Veronicka Braske for the sum of $ 3,800; that said Veronicka Braske has failed and refused and still refuses to complete said sale by paying the full sum of $ 3,800 to said August Gehner, unless she can get credit for the amount of the surplus of said $ 3,800 over and above so much as may be required to pay off the indebtness of $ 1,300 on said first deed of trust, together with such costs and interest as may have accrued, on her second deed of trust.

"Plaintiff further alleges that said second deed of trust on said property herein before described executed to secure an alleged indebtedness to defendant Veronicka Braske, was fraudulent and without consideration and given by defendant Schloss for the purpose of avoiding liability on said judgments of Justice Cline and the appeal bond executed therein, and for the purpose of defrauding the plaintiff in that said case, towit, the Drayage Transfer Company, and defeat the payment of said judgment by him, and for the further purpose of defrauding this plaintiff by compelling him to pay the said judgment of Justice Cline against said Schloss.

"Plaintiff further states that both defendant Schloss and Veronicka Braske are insolvent; that he is without remedy at law and except by the interposition of a court of equity he must remain totally remediless in the premises and his said judgment must remain wholly unpaid.

"Wherefore, plaintiff prays for a decree directing that in the event that defendant Veronicka Braske completes said sale and pays said Gehner said sum of $ 3,800 said Gehner be required, after paying such amount as may be required to discharge the indebtedness of said first deed of trust and expenses of the sale, to pay into court so much of the surplus as may be necessary to pay plaintiff's judgment and costs, as well as the costs of this suit, or, should said Veronicka Braske fail to complete said sale and pay said sum of $ 3,800 to trustee August Gehner, then plaintiff prays for a decree declaring said second deed of trust inoperative and void as fraudulent and without consideration, and for an order that said property be sold by order of this court, subject to the first deed of trust and the proceeds of said sale, or so much thereof as may be necessary to be applied to the payment of plaintiff's said judgment and costs, as well as the costs of this suit and such other and further relief as the court may deem meet and just in the premises and the circumstances of the case may require."

By his amended separate answer defendant Schloss denied generally the allegations of plaintiff's said petition.

The answer of defendant August Gehner is as follows:

"That on or about the 27th day of January, 1896, the property mentioned, referred to and described in the petition, was conveyed to him, as trustee, to secure an indebtedness of $ 1,300 to one Frank Hiemenz, and duly recorded in the office of the recorder of deeds for the city of St. Louis, Missouri.

"Further answering, this defendant denies each and every other allegation in said petition contained."

Defendant Veronicka Braske answered, admitting that on the 27th day of January, 1896, the property in question was conveyed to her co-defendant, August Gehner, in trust, to secure an indebtedness of $ 1,300 to one Frank Hiemenz; that thereafter, to-wit, on or about the 16th day of July, 1901, said property was conveyed to the Missouri Trust Company as trustee, to secure to her the sum of $ 5,000, as per negotiable promissory note in said deed of trust mentioned and described. This answer charges that both said deed of trust and the indebtedness secured thereby remain due and unpaid and are a lien on said property. It then denies all other allegations in the petition.

Upon the hearing of the cause the court made a finding of facts and rendered the following judgment and decree:

"Now upon this nineteenth day of May, A. D., 1903, this cause having come on for hearing on the pleadings and proofs adduced, parties plaintiff and defendant appearing, and the court having been duly advised in the premises, and having duly considered the same, doth find the issues joined in favor of the plaintiff; and the court doth further find that defendant Stephen Schloss is indebted to plaintiff on his said judgment as alleged in his bill in the sum of $ 227.20 and costs in said case accrued, amounting in all to $ 269.40, none of which has been paid, and the court doth further find that said deed of trust...