Loe v. Downing

• Decision Date: 08 June 1959
• Docket Number: No. 46804,No. 2,46804,2
• Citation: 325 S.W.2d 479
• Parties: Emma LOE, Respondent, v. Gail DOWNING and Irene Downing, Appellants
• Court: Missouri Supreme Court

Page 479

325 S.W.2d 479

Emma LOE, Respondent, v. Gail DOWNING and Irene Downing, Appellants.

No. 46804.

Supreme Court of Missouri, Division No. 2.

June 8, 1959.

Motion for Rehearing or to Transfer to Court en Banc Denied

July 13, 1959.

Russell N. Pickett, Eugene E. Andereck, Phil Hauck, Pickett, Andereck & Hauck, Trenton, for appellants.

Herbert S. Brown, Trenton, for respondent.

STOCKARD, Commissioner.

In this suit in equity the defendants have appealed from the judgment of the trial court setting aside a deed to a farm of 112 acres located in Mercer County because of fraud. Title to real estate is involved. Therefore appellate jurisdiction is in this court.

Charles Loe acquired the farm by purchase in 1917. On October 2, 1933, Charles and Etta Loe executed and delivered a warranty deed to the farm to Gail and Irene Downing, husband and wife, who are the appellants herein. Gail was a nephew of Charles Loe and had been raised by him and his wife Etta in their home. There is some evidence to the effect that in 1933 Charles Loe had some creditors, or may have anticipated that he would have, and that the deed was made in an effort to delay or hinder creditors. It was this deed to Gail and Irene Downing that the trial court set aside.

Etta Loe died on December 1, 1933, and on December 24, 1934, Charles Loe and Emma Harvey were married. According to respondent, Charles Loe lived alone and so did she, and 'one day he said, 'Why don't we get married? I got the farm and you have got some money. We could live without working so hard.'' When asked if Charles Loe represented to her that he owned the farm, respondent testified that 'He said, 'I got the farm,' that is just what he said. I knew that he paid the taxes and all of that. I just thought then it was his. * * * This is all that was said.'

After their marriage Charles Loe and respondent lived on the farm for ten or eleven years and then moved to Mill Grove where they bought a house, each paying half of the price, and title was taken in both their names. But, 'a few years back' Charles Loe had the town property transferred to a straw party and then to respondent alone, and in consideration for this transfer, according to respondent, she returned to him a note in the amount of $750 which he had given her when he borrowed that sum at the time his first wife was ill.

During the time Charles Loe and respondent lived on the farm he exercised the usual incidents of ownership, including the making of repairs, the payment of taxes, and the execution of an oil and gas lease for the recited consideration of one dollar. At various times after he and respondent moved to town Charles Loe rented all or parts of the farm and collected the rents therefrom, but Gail Downing testified that each time this was done it was with his knowledge and consent. At least two years before the death of Charles Loe, Gail Downing took over control and operation of the farm and paid the taxes thereon. There is evidence that in some of the previous years he gave Charles Loe the money to pay the taxes.

The warranty deed from Charles Loe and Etta Loe to appellants was recorded on January 17, 1939. Respondent admitted that in 1939 her daughter told her that she had heard that Charles Loe had sold some land, and that her daughter's informant said she had 'seen it in the Princeton paper.' Respondent made no inquiry to her husband about this because she thought it 'was a little dab of land he had sticking around over the town.' Although there is evidence to the effect that it was generally known in the community that appellants were the owners of the farm, according to respondent it was not until a few years before Charles Loe died that she first learned of the deed to appellants. She testified that in 1954 or 1955 'Johnny Mercer drove up in front of the house where we lived and said, 'Loe, why don't you sell that farm and stop worrying and working around here.' And he just spoke up and said, 'I can't as I have deeded it to Gail.' That is the first I knew of it.' Respondent made no inquiry or complaint to her husband about this, and she did not discuss the matter with appellants. Her first complaint to appellants concerning their claimed ownership of the farm consisted of the filing of this suit on April 17, 1957, which was seven days after the death of Charles Loe. Subsequent to the time that respondent knew of the deed to appellants and while Charles Loe was still alive she permitted Gail Downing, with no objection on her part or assertion of an interest in the farm, to pay the insurance on the farm buildings, build lateral ditches, pay the taxes, rebuild the basement to the house, construct ponds and make various other improvements.

The trial court found that the warranty deed was given to appellants 'for the purpose of defrauding the then existing creditors of Charles O. Loe, and that the continuing concealment of the existence of said deed by Charles O. Loe from [respondent], and the fact that the said Charles O. Loe continued to assert all the attributes of ownership of said farm from the date of marriage to the plaintiff until approximately two years prior to his death was a continuing fraudulent representation to the plaintiff, which if allowed to stand, would result in the defrauding of [respondent] of her marital rights of inheritance in the farm in question.'

We seriously doubt if there was sufficient evidence from which it may be found that prior to the conveyance to appellants, or that by reason thereof, Charles Loe was insolvent, and that the deed was in fraud of creditors. See Friedel v. Bailey, 329 Mo. 22, 44 S.W.2d 9, and Klaber v. Booth, Mo.Sup., 49 S.W.2d 181. But, in any event, we do not see why that could be of importance in this case. 'It is well established that a transfer of property, fraudulent and void as to creditors, is nevertheless valid as against the grantor and his privies in estate.' Stierlin v. Teschemacher, 333 Mo. 1208, 64 S.W.2d 647, 653; 91 A.L.R. 121; Bank of New Cambria v. Briggs, 361 Mo. 723, 236 S.W.2d 289; Mongler v. Mongler, Mo.App., 57 S.W.2d 740; Charles v. White, 214 Mo. 187, 112 S.W. 545, 21 L.R.A.N.S., 481, 127 Am.St.Rep. 674. Such fraudulent conveyances are voidable only as to creditors, and then only to the extent necessary to pay the debts. Stevenson v. Edwards, 98 Mo. 622, 12 S.W. 255. In other words, 'Only a creditor who can show that he has been injured by such a conveyance can impeach it, and, to entitle him to equitable relief, it is necessary for him to show that he has been thereby deprived of his remedy at law, and is therefore compelled to resort to equity.' 37 C.J.S. Fraudulent Conveyances Sec. 62; Rowley v. Rowley, Mo.Sup., 197 S.W. 152. It was specifically held in Lange v. Lange, 133 Fla. 447, 182 So. 807, 808, that 'A widow is not entitled to dower in lands, conveyed by her husband, before marriage, although such conveyance was fraudulent and void as against creditors.' Assuming then, that the deed to appellants was in fraud of creditors when made, since respondent does not contend that she is a creditor of Charles Loe, and there certainly is no evidence to support such a contention if made, she has no right to have a court of equity set aside the deed for that reason.

In respondent's argument to this court she contends that the deed was an antenuptial conveyance made and executed in fraud of her marital rights. It is established in this and other states that as a general rule a voluntary conveyance of real estate made just prior to marriage by either party to the contract to marry without the knowledge of the other may constitute a fraud upon the other's marital rights. Breshears v. Breshears, 360 Mo. 1057, 232 S.W.2d 460; Noe v. Noe, 359 Mo. 867, 224 S.W.2d 77; Vordick v. Kirsch, Mo.Sup., 216 S.W. 519; Moran v. Stewart, 173 Mo. 207, 73 S.W. 177; King v. King, 184 Mo. 99, 82 S.W. 101; Rice v. Waddill, 168 Mo. 99, 67 S.W. 605; Hach v. Rollins, 158 Mo. 182, 59 S.W. 232; Ellet v. Farmer, 384 Ill. 343, 51 N.E.2d 570; Arnegaard v. Arnegaard, 7 N.D. 475, 75 N.W. 797, 41 L.R.A. 258; Annotations, 9 L.R.A.N.S., 955; 48 L.R.A.N.S., 518; 103 Am.St.Rep. 419; 26 Am.Jur., Husband and Wife, Sec. 185. In this case, Charles Loe and respondent were not engaged to marry when the deed to appellants was made. In fact, he was then married to his first wife, Etta. Obviously, this was not a conveyance 'on the eve' of the grantor's marriage as in Vordick v. Kirsch, supra , and Breshears v. Breshears, supra. However, it has been stated that an antenuptial conveyance may be in fraud of marital rights and set aside even though 'the particular person whom he was to marry had or had not been selected.' Jarvis v. Jarvis, 286 Ill. 478, 122 N.E. 121. See, also, Higgins v. Higgins, 219 Ill. 146, 76 N.E. 86, 109 Am.St.Rep. 316; Noe v. Noe, supra; Beechley v. Beechley, 134 Iowa 75, 108 N.W. 762, 9 L.R.A.N.S., 955, 120 Am.St.Rep. 412, 13 Ann.Cas. 101; Annotations, 48 L.R.A.N.S., at page 518. But, in such a situation the conveyance must have been made with the express intention of defeating the marital rights of the person if and when selected for marriage. Jarvis v. Jarvis, supra; 26 Am.Jur., Husband and Wife, Sec. 189. Several factors would properly bear on this issue of intent such as the time of the conveyance in relation to the engagement or marriage and whether the conveyance was voluntary. But another, and we think a conclusive factor in this case, is that when the conveyance was made to appellants, Charles Loe was living with his first wife and she joined in the ded, and there is not one shred of evidence to support even an inference that at the time the deed was made Charles Loe had any intention of remarrying, or that he had the intent to defraud a future wife of her marital rights in the farm.

Respondent has cited Bitzenburg v. Bitzenburg, 360 Mo. 70, 226 S.W.2d 1017,...