Miller v. Allen

• Decision Date: 20 February 1917
• Docket Number: No. 17661.,17661.
• Parties: MILLER v. ALLEN et al.
• Court: Missouri Supreme Court

192 S.W. 967

MILLER v. ALLEN et al.

No. 17661.

Supreme Court of Missouri, Division No. 1.

February 20, 1917.

Appeal from Circuit Court, Cass County; Andrew A. Whitsitt, Judge.

Suit by T. J. Miller against Lewis L. Allen and others, to set aside certain deeds as fraudulent against creditors. From a judgment vesting the title in defendant Allen, plaintiff appeals. Reversed and remanded, with directions.

Oscar B. Elam, of Aurora, for appellant. W. Cloud, of Pierce City, and Charles W. Sloan and Allen Glenn & Son, all of Harrisonville, for respondent.

BLAIR, J.

Plaintiff is a judgment creditor of defendants E. P. and Lillie Henderson, who are husband and wife, and appeals from an adverse judgment of the Cass circuit court in a suit he brought to set aside certain deeds which purported to vest in defendant Allen the title to land theretofore owned by defendant E. P. Henderson. Plaintiff's judgment is founded upon claims which originated prior to the transactions whereby Allen acquired such title as he has. Until the summer of 1905 the title to the land mentioned was in E. P. Henderson, subject to certain incumbrances, aggregating nearly $13,000. In addition, Henderson owed other creditors, secured and unsecured, considerable sums. Among these last was the Lawrence County Bank of Pierce City, Mo., of which defendant Allen was cashier. The amount due this bank was $4,280.60. The Miners' & Merchants' Bank of Aurora held a mortgage for $1,040 on Henderson's land. This mortgage fell due in February, 1905. Other mortgages and trust deeds constituted superior liens, and Henderson attempted to secure a loan to pay off or, rather, consolidate the indebtedness secured on the land. Defendant Allen, desirous of protecting the Lawrence County Bank, undertook to aid Henderson in this. Allen wrote several letters to the Miners' & Merchants' Bank, whose note, as stated, was due. In a letter written April 19, 1905, after mentioning the abstract of title to the Henderson land, he wrote:

"There is no doubt but what I will be able to get a loan through for Henderson before long, which will enable him to pay off all the mortgages, and if you and the Barry County Bank folks will only give him a chance he will come out all right. We have $1,000.00 in the deal unsecured so far as real estate is concerned and our plan is to take a second mortgage and let him pay us in installments, which he will do. Let me know if you can hold up a while longer. The Barry County people seem to be willing to let him have a chance to get this loan through."

On April 29th he wrote the same bank, stating Henderson had a loan for $12,500 approved, "so I guess he will soon get things in shape to pay you in full." On May 4, 1905, he wrote, among other things:

"Mr. Henderson is fortunate in securing the loan and he will have it cleared up shortly I am sure and I appreciate your patience in this Henderson matter as I am interested in seeing him through in this loan and your getting your money."

In June, 1905, he wrote suggesting methods of handling a portion of Henderson's indebtedness, and adding:

"Henderson is in a desperate condition, and I fear something else will happen, before time of your foreclosure, if a settlement cannot be effected, so he can live. I wish I could get the matter in shape some way, so all could get out in fair shape. I have had the paper here for the $12,000.00 loan now for a couple of weeks, but I must get the ends to meet nearer. I believe if I could get the difference down to $1,000.00 or $1,200.00, I would put it up and take a second mortgage and a chattel on his next year's crops on his 500 acres. Phone me Monday the best you can do in the premises."

On June 21, 1905, he wrote that Henderson and wife had that day "signed up the papers for $12,000.00 loan," and that he (Allen) had mailed them to the loan company, from whom he expected to hear very soon; that he hoped to have by the following Monday a release of a certain judgment against the land. He added:

"I have made arrangements to close the matter up for Henderson, provided this judgment is released and you will give us the time to make the turn and pay off all claims as soon as the money arrives. I will keep you posted and feel sure now that all will go well. The matter referred to was a suggestion that Henderson be thrown into bankruptcy. * * * This would knock out what claim we have and tie all others up and make us all trouble and delay. I am trying to get it through without it and believe I will succeed if you will help in the matter without prejudice to your interest."

In an effort to protect its lien, the Miners' & Merchants' Bank had acquired prior mortgage notes which, with its $1,040 note and interest on the whole to June 3, 1905, aggregated $9,330.46. Defendant Allen was advised of this by a letter of June 3, 1905, and further advised that in case a sale became necessary an additional $825 would be added under a clause in one of the loans, conditioned upon default in payment. One Pope had acquired a mining lease on 12 acres of the Henderson farm, and the loan referred to in Allen's letter was held up, the lender requiring a release of this claim. Pope refused to release. The Miners' & Merchants' Bank advertised, under its $1,040 mortgage, to sell on June 26, 1905. On that day defendants Allen and E. P. Henderson, A. B. Stroud, who held a mortgage of $931 on the land, Mr. Bloss (representing the Miners' & Merchants' Bank), Mr. Loy (cashier of the same bank) and Mr. J. E. Adams of Illinois, who was proposing to furnish the money for a new loan, met at Purdy, Mo. Stroud's lien was superior to that of the mortgage under which the sale was being made. The upshot of the conference was that A. B. Stroud signed a writing whereby he agreed to purchase the Henderson land that day to be sold, and agreed that "upon L. L. Allen paying off all his (Stroud's) obligations, including purchase price of said land within thirty days, conveying to said Allen or his assigns, together with all rights he may have acquired in crops of said lands by sale or otherwise by mortgages he holds against same." Stroud attended the sale, and purchased and had the notes held by the Miners' State Bank, now aggregating $9,388, indorsed to him. He caused the trustee's deed to be made to his son, who furnished him the money to carry through his part of the transaction and held title solely for the father's purposes and to secure himself. On July 18, 1905, Allen caused to be prepared: (1) A warranty deed from H. L. Stroud and wife to Finis E. Henderson, son of E. P. Henderson, which recited a consideration of $14,059.90, and conveyed to Finis E. Henderson the 500-acre farm, free and clear of all incumbrances. This was acknowledged July 22, 1905, at Rogers, Ark. (2) A deed of trust to be executed by E. P. Henderson and Lillie Henderson, his wife, and by Finis E. Henderson. The beneficiary was James E. Adams and the amount secured, on the same land, was $10,000. (3) A second like deed of trust, securing to Adams $3,900. (4) A third deed of trust to defendant Allen as trustee, securing, on the same land, a note for $3,380.60, payable to the Lawrence County Bank, of which Allen was cashier and one of the principal stockholders. The total aggregated $17,280.60. (5) A warranty deed from Finis E. Henderson, E. P. Henderson, and Lillie Henderson, his wife, purporting, for "the sum of one dollar and for other good and sufficient considerations," to convey the 500 acres to defendant Allen, subject to the three mortgages last referred to. (6) A "Missouri farm lease" executed by defendant Allen, whereby he leased the 500 acres to defendant E. P. Henderson for a term of three years from July 18, 1905. The consideration recited was $3,000 per annum. The lease recited that:

"The second party [Henderson] is to have the use of all the live stock on said farm, belonging to said first party [Allen] * * * as well as all implements, buggies, carriages, and wagons, harness set, a list of which is attached."

The list included all of Henderson's and Mrs. Henderson's stock and Henderson's implements and vehicles. The list contains a great deal of property. The three trust deeds and the warranty deed to Allen were acknowledged about July 29, 1905, and E. P. Henderson, Lillie Henderson, and Finis Henderson signed them all, and the three signed all the secured notes, including the interest notes. On August 2, 1905, all the deeds were put of record. Prior to this, June 24, 1905, two trust deeds, respectively securing, by liens on the 500 acres, $10,000 and $2,000 to James E. Adams, and signed by E. P. and Lillie Henderson, had been recorded. These were not released until August 8, 1910. Defendant Allen explained these were the instruments prepared in connection with the first attempt to secure a loan, which attempt failed; that no money was ever obtained or paid on these notes. The Hendersons continued in possession of the property, occupying and using it as before. Allen testified they occupied under leases to him. August 1, 1908, a second lease to Henderson was executed by Allen, which, with respect to recitals as to the personalty and the list thereof attached, was like the first lease. The rent was again fixed at $3,000. It is a fair inference from the record that a third like lease was executed August 1, 1909, for one year. In December, 1909, 140 acres of the land was sold to John Opolka for $7,000, and Allen applied this sum on the indebtedness. E. P. Henderson testifies the sale to Opolka was agreed upon by him and Allen before it was made, and Allen does not deny this. On August 1, 1910, another lease was executed by Allen to Henderson, the rent being fixed at $2,000. During these years E. P. Henderson had been paying substantial amounts to Allen, sufficient, in the aggregate, according to Henderson, to pay all the interest and materially reduce the principal of the mortgage indebtedness. An abandoned answer...