Mansur & Tebbetts Implement Company v. Jones

• Decision Date: 15 March 1898
• Parties: Mansur & Tebbetts Implement Company, Appellant, v. Jones et al
• Court: Missouri Supreme Court

45 S.W. 41

143 Mo. 253

Mansur & Tebbetts Implement Company, Appellant, v. Jones et al

Supreme Court of Missouri, Second Division

March 15, 1898

Appeal from Andrain Circuit Court. -- Hon. E. M. Hughes, Judge.

Reversed and remanded (with directions).

Ben Eli Guthrie and Dysart & Mitchell for appellant.

(1) This form of action is the proper proceeding in a case like this, for an attaching creditor to avail himself of property fraudulently conveyed by his debtor. The solvency or insolvency of the defendant is immaterial in a proceeding like this. R. S. 1889, sec. 571; Lackland v. Smith, 5 Mo.App. 153; Boland v. Ross, 120 Mo. 208; Knoop v. Kelsey, 121 Mo. 642; Maupin v. Mining Co., 78 Mo. 24; Borum v. Reed, 73 Mo. 461; Jones v. Hart, 60 Mo. 351; Huxley v Harrold, 62 Mo. 516; Wapples on Attach., pp. 510 and 511. (2) If the mortgage deed of trust from Geo. L. Jones to his mother, Sarah M. Jones, of September 30, 1893, was fraudulent and void as to creditors for any reason, then the plaintiff ought to prevail in this suit. Norton v Highleyman, 88 Mo. 621; Evans v. Halleck, 83 Mo. 376; Johnson v. Goldsby, 32 Mo.App. 560; Campbell Ptg. Co. v. Roeder, 44 Mo.App. 324; Dunn v. Railroad, 45 Mo.App. 29. (3) The deed of trust given by George L. Jones to his mother, Sarah M. Jones on the thirtieth day of September, 1893, to secure the sum of $ 2,500 was fraudulent and void as to creditors for the following reasons: First. Because the evidence abundantly and conclusively shows that the purchase price of the three lots in question had been fully paid at the time of the execution of said deed of trust, and the said deed of trust was wholly without consideration. Second. Because it is admitted by both the defendants that said deed of trust was given to secure the sum of $ 2,500, when the balance due from George to his mother did not exceed more than one half that sum, which fact was known to both George and his mother. State v Hope, 102 Mo. 410; Seger's Sons v. Thomas Bros., 107 Mo. 635; Nat. Tube Work Co. v. Machine Co., 118 Mo. 365; Barton v. Sitlington, 128 Mo. 164; Boland v. Ross, 120 Mo. 208; McVeagh v. Baxter, 82 Mo. 518; Meyberg v. Jacobs, 40 Mo.App. 129; State v. Durant, 53 Mo.App. 493; Mfg. Co. v. Steel & Walker, 36 Mo.App. 496. Third. The withholding of the January deed of trust from record created a secret trust in favor of Sarah M. Jones, and constituted a fraud on the creditors of George L. Jones. Bank v. Doran, 109 Mo. 40; Pattison v. Letton, 56 Mo.App. 325; Bank v. Kansas City Lime Co., 43 Mo.App. 561. (4) A suit can be maintained by an attaching creditor to set aside a fraudulent sale or mortgage of property, although the fraudulent debtor may have other property sufficient to pay the plaintiff's demand. Besides, the evidence in this case shows that none of the defendants in the attachment suits own any property in this State available to the plaintiff except the three lots in question. Bank v. Lumber Co., 68 Mo.App. 81; Bank v. Lumber Co., 59 Mo.App. 317; Bank v. Western Lumber Co., 34 S.W. 869; Bank v. Powers, 134 Mo. 432; Patton v. Bragg, 113 Mo. 595. (5) The transaction between Sarah M. Jones and Gilstrap was not a purchase of the note by her and an assignment of it to her by him. She can not under the circumstances claim any title by reason of her purchase under the foreclosure of the Gilstrap deed of trust if in fact her mortgage was fraudulent and void. Minter v. Cupp, 98 Mo. 26; Smith v. Johnson, 71 Mo. 382; Goodfellow v Landis, 36 Mo. 168; Tingley v. Bank, 80 Mo. 289; Ford v. Phillips, 83 Mo. 523; Campbell v. Allen, 38 Mo.App. 27; Cummings v. Hurd, 49 Mo.App. 139; Allen v. Dermott, 80 Mo. 56; Swope v. Leffingwell, 72 Mo. 348 (6) The deed of trust of September 30, 1893, was not only fraudulent in law, but the same was fraudulent in fact contrived to render inoperative plaintiff's threatened attachment suits. Where the claims of honest creditors are concerned, courts of equity carefully consider transactions between near relatives and members of the same family. Van Raalte v. Harrington, 101 Mo. 602; Holloway v. Holloway, 103 Mo. 274; 8 Am. and Eng. Ency. of Law, 764. (7) One of the defenses of Sarah M. Jones, in her separate and amended answer, is that the three lots in question was the homestead of the said Geo. L. Jones at the time she accepted her deed of trust. This fact is disproved. George's homestead was in another part of the city of Macon, in block 60, which stood in the name of his wife, but was paid for with his own money. This fact is fully developed both in the property statements and in the testimony of George. The question of homestead cuts no figure in the case. (8) An instrument may be fraudulent and void as to creditors, without regard to the intent. Seger's Sons v. Thomas Bros., 107 Mo. 635; State v. Hope, 102 Mo. 410.

Chas. P. Hess and George Robertson for respondents.

(1) The plaintiff's petition does not state a cause of action and for that reason the bill was properly dismissed. It does not allege the insolvency of any one of the judgment debtors, nor does it allege that any effort was made to collect the judgments by execution, or that plaintiff has no remedy at law. The proof, on the other hand, discloses that defendant T. M. Jones is solvent, and that plaintiff is pursuing his property in the State of Ohio by an action in attachment and at common law. For aught is known since the trial in this cause in the circuit court, the debt against T. M. Jones may have been collected by the action in Ohio. Plaintiff must allege and prove such facts as to show he has no remedy at law before equity will take jurisdiction to entertain a creditor's bill. Turner v. Adams, 46 Mo. 95; Thias v. Siener, 103 Mo. 314; Mullen v. Hewitt, 103 Mo. 639; Reyburn v. Mitchell, 106 Mo. 365; Millier v. Bartlett, 106 Mo. 381; 4 Am. and Eng. Ency. of Law, 573; Wait on Fraud. Con. [2 Ed.], sec. 68; Bump on Fraud. Con. [4 Ed.], sec. 540; 2 Bigelow on Fraud. 80; Case v. Beauregard, 99 U.S. 119; Case v. Railroad, 101 U.S. 688; Fecheimer v. Hollander, 6 Mackay (D. C.), 512; Massey v. Gordon, 90 Am. Dec., note 6, p. 297. (2) The plaintiff contends that it has full authority under section 571, Revised Statutes 1889, to maintain this action. This statute is confined to attaching creditors. It does not apply to and was not intended for judgment creditors. It is an engraftment upon the attachment law and is in aid of the writ of attachment only, for after judgment has been obtained there is the usual remedy by execution, and if it is of no avail the "equitable execution" of creditor's bill. The judgment rendered against Geo. L. and T. M. Jones is a general judgment, and in the action against Geo. L. and David M. Jones the attachment was abandoned and simply a general judgment on the account rendered. Upon the rendition of these judgments plaintiff ceased to be an attaching creditor. Only a general judgment could be rendered in either case. R. S. 1889, sec. 560; Adler v. Anderson, 42 Mo.App. 195; Huxley v. Harrold, 62 Mo. 520; Lackland v. Smith, 5 Mo.App. 153. When a personal judgment is rendered the action under the statute will not. lie. Quarel v. Abbett, 102 Ind. 233; Pendleton v. Perkins, 49 Mo. 565; Fisher v. Tallman, 74 Mo. 39; Pom. Eq. Jur. [2 Ed.], sec. 1415 and notes. (3) By purchase or payment of the Gilstrap note Mrs. Jones became subrogated to all the rights of the original holder thereof. Reyburn v. Mitchell, 106 Mo. 365; Grady v. O'Reily, 116 Mo. 346; Long v. Long, 111 Mo. 12; Jones on Mort., secs. 1137, 1080. The assignment of the note carried with it the security and power of sale. Jones on Mort., sec. 826; Bank v. Abernathy, 33 Mo.App. 211; Laurier v. McIntosh, 117 Mo. 508. (4) The purchase of the Gilstrap note was made in good faith, and that debt and transaction will stand on its own merits. While there is a valid indebtedness as to the support of the mortgage made by Geo. L. Jones to his mother, yet the Gilstrap deed of trust is valid in the hands of Mrs. Jones even if the prior deed of trust be fraudulent. Bump on Fraud. Con. [4 Ed.], sec. 484; Wait on Fraud. Con., sec. 389; White v. Cotzhausen, 129 U.S. 329; Bank v. Winn, 132 Mo. 80. (5) The recital in the trustee's deed of the refusal of Gilstrap trustee to act is prima facie proof of that fact, and in the absence of any evidence to the contrary, is conclusive. R. S. 1889, sec. 7103. (6) The assignment of the note by Gilstrap was good for the reasons: First, if Moody owned the note Gilstrap had general authority as to it; second, the note was duly assigned to Gilstrap by Moody. (7) Fraud never can be presumed but must be proven. Not only must plaintiffs prove fraud, but they must also prove the essential element of participation by the grantee in the fraud. Bonney v. Taylor, 90 Mo. 63; Hazell v. Bank, 95 Mo. 60; Hard v. Foster, 98 Mo. 297; Deering v. Collins, 38 Mo.App. 80; Petinggill v. Jones, 30 Mo.App. 280; Shelly v. Boothe, 73 Mo. 74.

Burgess, J. Gantt, P. J., and Sherwood, J., concur.

OPINION

Burgess, J.

This is a suit by an attaching creditor under section 571, Revised Statutes 1889, upon two different judgments in suits begun by attachment to set aside certain deeds for fraud, affecting lots one, two and three in block sixty-one in the city of Macon, Missouri. The suit was begun in the circuit court of Macon county, Missouri, from which the venue was subsequently changed to the circuit court of Audrain county. The petition, leaving off the formal parts, is as follows:

"Now at this day comes the said plaintiff by its attorneys and for cause of action against said defendants states that the said plaintiff is a corporation duly organized and existing under the laws of the State of Missouri for business purposes. That at the April term, 1894, of the said circuit...