McCrory v. Donald

• Decision Date: 17 February 1919
• Docket Number: 20547
• Citation: 119 Miss. 256,80 So. 643
• Court: Mississippi Supreme Court
• Parties: MCCRORY v. DONALD

80 So. 643

119 Miss. 256

MCCRORY v. DONALD

No. 20547

Supreme Court of Mississippi

February 17, 1919

Division B

1 JUDGMENT. Foreign adjudication. Matter concluded.

Where a husband conveyed his lands to his wife at the same time, both in this state and the state of Alabama, the fact that the Alabama courts refused to set aside the conveyance as to lands in that state as a fraud upon his creditors, was not binding upon the courts of this state in a similar suit as to the lands in this state, the subject-matter and the law being different.

2. FRAUDULENT CONVEYANCES. Evidence. Sufficiency.

In a suit to set aside a conveyance by a debtor to his wife as a fraud upon his creditors, the fact that he remained in possession of the property, exercised ownership, made representations that he was the owner and concealed such conveyance from his creditors by not recording his deed, was sufficient to justify a finding by the chancellor that he intended to defraud his creditors.

3 BANKRUPTCY. Suit to set aside fraudulent conveyances. Intervention.

Where after a suit was brought against a debtor to set aside a conveyance made by him to his wife, as a fraud upon his creditors, he went into bankruptcy, it was proper for the court to permit the trustee in bankruptcy to intervene on behalf of all the creditors of the bankrupt, to the end that such creditors should get a fair proportion of the assets of the bankrupt.

4. FRAUDULENT CONVEYANCES. Subsisting indebtedness.

Since sections 2522 of the Code of 1906 (Hemingway's Code section 2056), expressly require a conveyance between the husband and wife to be recorded before it shall take effect so far as any third party is concerned, a setting aside of a conveyance from a husband to his wife as fraudulent was not erroneous merely because when the conveyance was made the husband was not shown to have been indebted, where it is shown that he was indebted before such conveyance was recorded.

5. BANKRUPTCY. Suits to set aside fraudulent conveyances. Determination of amount due creditors.

Where in a suit to avoid a fraudulent conveyance the defendant was adjudged a bankrupt and the trustee intervened, the state court properly adjudged title to be in the trustee without ascertaining the amount due creditors since the Federal act of bankruptcy (U. S. Comp. St., sections 9585, 9656) vest title to the property of the bankrupt in the trustee and the bankrupt court has jurisdiction to determine the amount due creditors.

HON. G. C. TANN, Chancellor.

APPEAL from the chancery court of Clark county, HON. G. C. TANN, Chancellor.

Suit by Winner, Klein & Co. and others against Bessie McCrory, wherein B. H. Donald, trustee in bankruptcy of R. M. McCrory, intervened. From a decree for intervener, defendant appeals.

The facts are fully stated in the opinion of the court.

Judgment affirmed.

Robert L. Bullard, for appellant.

Upon the threshold of this case lies a question which should obviate the consideration of any other. (1) Was the adjudication of the bona fides of the transaction out of which this deed grew, between this complainant and respondent, in the Alabama court, res adjudicata of the same issue here. If so, that ends it, of course, and the bill will be dismissed.

The plea alleges, and it is admitted, that on the same day, at the same time, for the same cause, in the same transaction, by the same person, to the same person, and for the same consideration, two deeds were made. Both were parts of one transaction; as acts they could not be separated, one from the other. If one was fraudulent, both were fraudulant; if one was valid, both were valid. One could not be good and the other bad; one could not be valid as to creditors and the other invalid as to creditors.

One of these deeds is the deed attacked in this case, which the court is asked to declare invalid as to McCrory's creditors; the other is the deed attacked in the Alabama court, which that court previously held was not invalid as to McCrory's creditors.

Upon this subject, there are two rules, well understood and enforced everywhere, viz: (a) Where the parties and the subject-matter of the suit, or cause of action, are the same; then, every material question or matter of fact that might have been put in issue, is conclusively settled between them, and their privies, everywhere and for all purposes, whether it was actually put in issue or litigated, or not. (b) Where the parties are the same, but the subject-matter of the suit or cause of action is different, then such material issues of fact as are actually put in issue and decided, are, to the same extent, concluded.

It is not the subject-matter of the former action that constitutes the estoppel; not the recovery itself, but the ground, the matter of fact, upon which it proceeds, or is defeated. Recovery upon any cause of action only goes to the extent of precluding recovery again upon the same cause of action, or of the same thing, but matter of fact necessarily in issue, or actually put in issue between them, constitutes the estoppel, and the judgment of the court forever settles that issue of fact between the same parties forever and everywhere. Williams v. Luckett (Miss.), 26 So. 967; Lehman et al. v. Glenn (Ala.), 6 So. 44; Steam Packet Co. v. Sickles (U. S.), 5 Wall., 18 L.Ed. 550; Outran v. Morwood, (Eng.) 3 East. 346; Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195; and if the court should care to investigate the question further, the following cases may be examined: 23 Cyc., 1295 and 1300, and authorities cited; Lumber Co. v. Butchell, 101 U.S. 638, 25 L.Ed. 1072; Burrell v. Fulton, 109 U.S. 637, 30 L.Ed. 511; Burlen v. Shannon, 99 Mass. 203; Gardner v. Rucbee, 3 Cow. 327; Butt v. Sturnberg, 4 Cow. 563; Merriam v. Whitmore, 5 Gray, 317; Norton v. Huxly, 13 Gray, 290; Stephens v. Hughes, 31 Pa. 385; Hatch v. Garza, 22 Tex. 187; Clark v. Simmons, 12 Iowa 370; Beloit v. Morgan, 7 Wall. 623, 19 L.Ed. 206, in which last case the court said: "It results that an adjudication by a competent tribunal is conclusive, not only in the proceeding in which it is pronounced, but in every other, where the right or title is the same, although the cause of action is different," citing--2 Smith, L. Cas. 7th Am. Ed., 780; Bigelo on Estoppel (2 Ed.), 45; Aurora v. West, 7 Wall. 96; 9 L.Ed. 47; Gould v. Ry. Co., 91 U.S. 526, 23 L.Ed. 416; Outran v. Morwood, 3 East, 346.

Upon the facts of this case, as set out in the plea and admitted by the appellee, I submit that the cause should be reversed and the bill dismissed. There is no evidence to support the finding that the deed of October 16, 1908, was made to defraud.

Let it be remembered that there is no allegation in the bill that McCrory owed anything at the time the deed was made. There is no allegation or pretense that he had any design to defraud any existing creditor, or that any creditor then existed even; there is no allegation or pretense that the parties to the deed did anything then, or thereafter, said anything then or thereafter, to mislead or defraud Winner, Klein & Company, or any person; there is no allegation or pretense that the deed was withheld from record or anything else done or omitted to be done by them with the purpose to defraud, or that any such thing did mislead or defraud, but the right to recover is predicted of the broad ground that they entertained then the specific intent to defraud his future creditors by placing his property beyond their reach. Such is his bill, in so far as it is sufficient to charge anything.

It is not complained in the bill or evidence that he became involved in debt until late in the year 1910, just before they began to sue him. Apparently, he paid up promptly before that time, there is no complaint, or proof, that he did not reasonably and promptly do so, and we are therefore warranted in saying that he did.

The burden is therefore on them to allege and prove that both McCrory, and his wife entertained the intent to defraud at the time the deed was executed; or to allege and prove, after the deed was executed, that she, Mrs. Bessie McCrory, did, or said, something with intent to deceive and defraud, and which did deceive and defraud. See Sec. 4778, Code 1906, and authorities cited in annotations.

The fact that the deed was not filed for record until June 1, 1910 is no evidence of fraud. It if had been withheld to mislead them, and had done so, or if any of McCrory's creditors had obtained from him any conveyance or lien against the land, by suit, or otherwise, before the deed did become operative as to them by being filed for record, and the right to recovery was predicated of that ground, then a different question would be presented. Such is not the case. Johnson v. Columbus Banking Co., 85 Miss. 223.

There is not only no such allegation in this bill, but on creditor even intimates that he was misled by it.

And this not affected by section 2522, Code 1906, declaring conveyances between husband and wife void as to third parties, unless filed for record. This section does not declare the deed void, and therefore, it is not; it is only void as "to third parties," and when it was filed in 1910, it became valid against the world and the rest of mankind in general, except such "third parties" whose right in the thing conveyed, had intervened. If the complainant had filed is bill before that date, or otherwise acquired some lien, then it would be different, provided he predicated his right to recover on the fact. Such is not the case here. This is the clear meaning of that statute, as held in: Green v. Weems, 85 Miss. 556, where it is held "Under Code 1892, section 2294 (Code 1906, section 2522), providing that a conveyance between husband and wife shall not be...