Meyer Brothers Drug Company v. White
| Decision Date | 19 November 1901 |
| Parties | MEYER BROTHERS DRUG COMPANY, Appellant, v. WHITE et al |
| Court | Missouri Supreme Court |
Appeal from Monroe Circuit Court. -- Hon. David H. Eby, Judge.
Affirmed.
T. T Rodes, R. B. Bristow and R. N. Bodine for appellant; J. E McKeighan and M. F. Watts of counsel.
(1) The defendants, James W. Lester and First National Bank of Saratoga Springs, New York, should not have been permitted to come in and defend and introduce evidence of acts subsequent to the institution of this suit and filing of the lis pendens. 13 Am. and Eng. Ency. of Law (1 Ed.), 871, 910. (2) The deed from White to Bockes was void for the want of consideration. 15 Am. and Eng. Enc. Law (2 Ed.), pp. 225 and 781. (3) A trust can not be created by parol. R. S. 1899 sec. 3416; Rogers v. Ramey, 137 Mo. 598; Weiss v. Heilkamp, 127 Mo. 23; Gum v. Gates, 73 Mo. 115; Ellis v. Hill, 162 Ill. 557; Kyle v. Wills, 46 N.E. 112.
James H. Whitecotton, James W. Lester and Thomas H. Bacon for respondents.
(1) Running through a series of years, various notes had been by White indorsed to Bockes and had been by Bockes indorsed and cashed at his bank and the proceeds thereof in the amount of $ 15,759.75 had been by Bockes duly remitted to White, who thereby became legally obligated to refund said amount to Bockes. For this consideration, White, at a valuation price of $ 14,000, deeded to Bockes an equity found reasonably worth not exceeding $ 7,000, and the trial court properly sustained said transfer. (2) As cashier and general manager, Bockes had for five years carried White's unsecured promissory demand note to the bank for $ 9,264.50 simply on payment of interest but without any renewal. For said negligence Bockes was legally obligated to make good the default of his brother-in-law, and when, in pursuance of said obligation, at a valuation price of $ 14,000, White deeded to Bockes an equity duly found reasonably worth not exceeding $ 7,000, the trial court properly sustained said transfer. (3) Irrespective of Bockes' liabilities, a sale and direct conveyance at an adequate fixed price by White to Bockes of a reasonable amount of assets for the honest purpose of paying off White's valid indebtedness to the bank is not fraudulent and the same will be supported in law and equity. Dougherty v. Cooper, 77 Mo. 531; Nichols v. Ellis, 98 Mo. 344; State ex rel. v. Purcell, 131 Mo. 312; Baker v. Harvey, 133 Mo. 653; Kincaid v. Irvine, 140 Mo. 623. (4) The fact that Bockes was a relative does not impair the validity of the transfer. Ridge v. Greenwell, 53 Mo.App. 479; Van Raalte v. Harrington, 101 Mo. 602; Columbia v. Winn, 132 Mo. 80; Richardson v. Smart, 152 Mo. 623; Glasgow v. Burnes, 144 Mo. 192. (5) The burden of proof of fraud is always on the accuser, and this exaction applies to alleged fraud of grantee as well as of grantor. Bank v. Worthington, 145 Mo. 91; Hoeller v. Haffner, 155 Mo. 589.
The defendants in this case are Charles T. C. White, William Hay Bockes, and the First National Bank of Saratoga Springs, New York.
By general warranty deed dated the eighth day of May, 1893, the said White and his wife, Mary E. White, conveyed a tract of land situate in Monroe county, described in the petition, "containing 600 acres more or less, subject to a mortgage of $ 8,000, due June 1, 1896, to the said Bockes, which deed was on the same day duly acknowledged and recorded among the land records of said county, and afterwards delivered to the said Bockes. At the time of the execution of this deed the said defendant White was indebted to the plaintiff on three promissory notes, one dated December 12, 1892, for $ 1,146.95, one dated January 12, 1895, for $ 1,154, and one dated February 12, 1893, for $ 1,161.96, bearing interest from date at the rate of eight per cent per annum, in the aggregate sum of $ 3,462.91, with interest, according to the tenor of said notes. Afterwards, on the third day of June, 1893, the plaintiff instituted suit by attachment on said promissory notes in the circuit court of said county, and on the same day the writ of attachment was levied upon said land. On the sixth of June, 1893, he filed notice lis pendens thereof, and on the same day instituted this suit, which is an action to set aside and annul said deed on the ground that the same "was without consideration and was made with the fraudulent intent on the part of Charles T. C. White to hinder, delay and defraud his creditors, and especially to hinder, delay and defraud this plaintiff, and that said deed was, after the institution of the attachment suit . . . . delivered by said defendant White to and accepted by the said defendant Bockes with full knowledge on his part of the fraudulent intent aforesaid of the said Charles T. C. White, and with the further fraudulent intent on the part of each of said defendants to hinder, delay and defraud the creditors of Charles T. C. White, and especially to hinder, delay and defraud this plaintiff." The consideration recited in the deed is $ 22,000. Bockes is a brother-in-law of White. At the time of the execution of the deed, and for many years before, Bockes was, and since has been, the cashier of the First National Bank of Saratoga Springs, New York, and as such was its chief executive officer and general manager. The deed was signed by White and wife and acknowledged at Paris, the county seat of Monroe county, filed by White for record, and forwarded by mail, addressed to "Wm. Hay Bockes, Cashier, Saratoga Springs, New York," and the evidence tends to prove that it was delivered before the attachment suit was instituted. The evidence also tends to prove that the land at that time was worth about $ 15,000. It also appears from the evidence that White at that time was insolvent, was not indebted to Bockes, and that Bockes personally paid no consideration for the deed. But that White was indebted to the bank in the principal sum of $ 25,831.91, for money obtained by him from the bank through Bockes, on discounts and renewals of White's paper, running through a series of years -- which indebtedness was evidenced by promissory notes of dates, in amounts, and due as follows:
April 5, 1893, $ 9,264.50, due on demand.
December 17, 1892, $ 4,480.00, due March 8, 1893.
December 19, 1892, $ 2,890.00, due April 27, 1893.
December 31, 1892, $ 238.41, due May 3, 1893.
January 9, 1893, $ 4,182.00, due April 24, 1893.
January 12, 1893, $ 4,777.00, due May 3, 1893.
It does not appear that Bockes, the bank, or any of its officers, were cognizant of the financial condition of White at the time the deed was made.
Afterwards, on the thirteenth of January, 1894, by deed duly acknowledged and recorded, Bockes and wife conveyed the land to one Millard Lister, an unmarried employee of the bank, who thereupon executed an instrument in writing, declaring that he held the title for the bank.
Afterwards, at the April term, 1897, of the Monroe Circuit Court, the attachment was tried upon plea in abatement and sustained, and at the April term, 1898, of said court, the plaintiff's cause of action therein was tried upon its merits and it obtained judgment for $ 4,922.68, and at the same term it filed a second amended petition herein, to which at the same term the joint answer of all the defendants was filed, putting in issue all the material allegations of the petition, and setting up new matter upon which they asked affirmative relief inter sese. Issue was joined by reply, and upon the issues thus made up, the case was tried at the November term, 1898, of said court, the issues found for the defendant, and the following judgment and decree made and entered, upon the finding:
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