Moberly v. Watson

• Decision Date: 17 March 1937
• Docket Number: 34390
• Parties: O. H. Moberly, Finance Commissioner, and T. J. Haley, Special Deputy Finance Commissioner, in charge of Cook Station Bank, Appellants, v. P. A. Watson and Lake Kendall
• Court: Missouri Supreme Court

102 S.W.2d 886

340 Mo. 820

O. H. Moberly, Finance Commissioner, and T. J. Haley, Special Deputy Finance Commissioner, in charge of Cook Station Bank, Appellants, v. P. A. Watson and Lake Kendall

No. 34390

Supreme Court of Missouri

March 17, 1937

Appeal from Crawford Circuit Court; Hon. W. E. Barton Judge.

Affirmed.

Earl E. Roberts for appellants.

(1) Transactions between parents and child should be closely scrutinized when the result of such a transaction is to leave the grantor insolvent. Barrett v. Foote, 187 S.W 70; Walther v. Null, 233 Mo. 104, 134 S.W. 993; Bank of Versailles v. Guthrey, 127 Mo. 189, 29 S.W 1004, 48 Am. St. Rep. 621; Keegan v. Haslett, 138 Mo.App. 286, 107 S.W. 17; Massey v. McCoy, 79 Mo.App. 169; Bank v. Fry, 216 Mo. 45, 115 S.W. 439; Cole v. Cole, 231 Mo. 236, 132 S.W. 734; Ice & Cold Storage Co. v. Kuhlman, 238 Mo. 698, 142 S.W. 253. (2) The consideration paid by the defendant, Lake Kendall, to the defendant, P. A. Watson, was insufficient, and indefinite, and not in fact good consideration in view of the circumstances. Regan v. Turner, 69 Colo. 194, 193 P. 557; Smith v. Clark, 136 N.E. 66, 23 A. L. R. 582; Bank of Versailles v. Guthrey, 127 Mo. 189, 27 S.W. 1004, 48 Am. St. Rep. 621; Walter v. Nul, 233 Mo. 104, 134 S.W. 993; Massey v. McCoy, 79 Mo.App. 169; Kegan v. Haslett, 128 Mo.App. 286, 107 S.W. 17, 2 A. L. R. 1441; Snider v. Free, 21 S.W. 847, 114 Mo. 360. The fact that the grantee in this case may have been bona fide will not prevent the courts holding the conveyance fraudulent as to the plaintiff. 2 A. L. R. 1451; Sandlin v. Robbins, 62 Ala. 477; Walker v. Williamson, 177 Ky. 599, 198 S.W. 10; Egery v. Johnson, 70 Me. 258; Spear v. Spear, 97 Me. 498, 54 A. 1106; Clowe v. Seavey, 208 N.Y. 496, 47 L. R. A. (N. S.) 284, 102 N.E. 521; Ludlow Sav. Bank & T. Co. v. Knight, 102 A. 51, 2 A. L. R. 1433; Hanna v. Charleston Natl. Bank, 55 W.Va. 185, 46 S.E. 920. (3) Regardless of the actual intent of the grantor this conveyance was fraudulent. Aeger v. Thomas, 107 N.W. 635, 18 S.W. 33; Young v. Burr, 93 N.Y. 17; 45 Am. Rep. 160; 2 A. L. R. 1438; 27 C. J. 504, sec. 170 a; Miller v. Jonnett, 63 Tex. 86.

E. W. Bennett for respondents.

(1) Appellants alleged a fraudulent transfer. Respondent Lake Kendall answered denying any information of other indebtedness, denied any participation in any purpose to cheat or defraud other creditors and averred a bona fide transaction. Whereupon the burden of proof of fraud rested upon the appellants and appellants have failed to prove any fraud. Dallman v. Renshaw, 26 Mo. 533; Robinson v. Dryden, 24 S.W. 448; Kerstner v. Vorweg, 32 S.W. 298; Implement Co. v. Ritchie, 45 S.W. 641; Hazel v. Bank, 8 S.W. 173. (a) A transfer which is fraudulent as regards the grantor's creditors, is not fraudulent as regards grantee, unless he knew of the grantor's intent and participated in it. Bank v. Worthington, 46 S.W. 745. (b) Where in a creditors' suit to set aside a conveyance, plaintiff alleges fraud on the part of the grantor and grantee, which allegation is denied by the grantee, the burden of proof rests on the plaintiff, and he must make out his case by clear and convincing evidence. Bank v. Funk, 92 S.W.2d 587; Bank v. Worthington, 46 S.W. 745. (c) Where a deed of trust to one is regular on its face and he is in possession of the property, the burden of proof is on him who assails it by attachment to show that the transaction was fraudulent. Implement Company v. Ritchie, 45 S.W. 634, 143 Mo. 587. (d) Fraud must be proved as an affirmative fact and the proof must be of such a positive and definite character as to clearly convince the mind of the chancellor, for it is never presumed, and if the facts shown all consist as well with honesty as with fraud, the transaction should be upheld. Bank v. Worthington, 46 S.W. 747; Dallman v. Renshaw, 26 Mo. 533; Robinson v. Dryden, 24 S.W. 448. (2) The general rule governing transfers between strangers ordinarily controls questions as to the nature, adequacy and sufficiency and of effect of want of consideration in transactions between parent and child. A conveyance by a parent to a child for an adequate consideration will be upheld as against creditors. And while a deed of an insolvent parent to his child for less than the fair value of the property is presumptively fraudulent, yet inadequacy of consideration is not of itself conclusive evidence of fraud and the presumption may be overcome by proof of good faith. 27 C. J. p. 569; Grocery Co. v. Monroe, 43 S.W. 633, 142 Mo. 165; Dozier v. Matson, 7 S.W. 268, 94 Mo. 328; Donovan v. Dunning, 69 Mo. 436; Rumbolds v. Parr, 51 Mo. 592; Mason v. Perkins, 79 S.W. 683, 180 Mo. 702; Inhoff v. McArthur, 48 S.W. 456, 146 Mo. 371; Lionberger v. Baker, 14 Mo.App. 353. (a) A conveyance by a parent to his child in consideration of services rendered under an agreement for compensation therefor, is valid as against creditors of the parents and will be enforced in the absence of fraudulent intent. The fact that part of the consideration is for past services rendered will not invalidate the conveyance where there was a further consideration consisting in a substantial cash payment. 27 C. J. p. 570; Snyder v. Free, 21 S.W. 847, 114 Mo. 360.

Bradley, C. Ferguson and Hyde, CC., concur.

OPINION

BRADLEY

This is an action to set aside a deed to two parcels of land in Crawford County, aggregating 28.59 acres. The trial court found for defendants and plaintiffs appealed.

It is suggested by defendants (respondents here) that the appeal should be dismissed because "the record is not properly abstracted" and because there was no "extension of time" for filing bill of exceptions. The point on the abstract is that the evidence is not properly set out. Appellants, in a way, state the effect of the evidence, instead of narrating in the first person. Such is not a satisfactory way to abstract the evidence, but we think that the abstract is sufficiently clear to present the questions raised. The bill of exceptions was filed May 24, 1936. Since the enactment (Laws 1911, p. 139) of what is now Section 1009, Revised Statutes 1929 (Mo. Stat. Ann., sec. 1009, p. 1278), it is not necessary, in order to file bill of exceptions, for the court to make an order granting leave to file (Thompson v. Schultz, 222 Mo.App. 268, 296 S.W. 205, l. c. 208 and cases there cited), and under Section 1009, it is sufficient if such bill is filed at any time "before the appellant shall be required by the rules of such appellate courts respectively to serve his abstract of the record." [See, also, Smith et al. v. Ohio Millers' Mut. Fire Ins., Co., 320 Mo. 146, 6 S.W.2d 920, l. c. 927.] Appeal in this case was taken October 15, 1933, and in perfecting the appeal, appellants, in lieu of a complete transcript, as provided by Section 1028, Revised Statutes 1929 (Mo. Stat. Ann., sec. 1028, p. 1310), duly filed here a certified copy of the judgment and order granting the appeal, and on September 12, 1936, a copy of abstract was served on respondents, and thereafter, and on September 30, 1936, abstract was filed here. The cause was set for hearing on our docket for January 16, 1937. Our Rule 11 provides that where an appellant files certified copy of judgment, etc., in lieu of complete transcript "he shall deliver to the respondent a copy of his abstract at least thirty days before the cause is set for hearing, and in like time file ten copies thereof with our clerk." It does not appear that appellants were delinquent, as to time, in any manner.

The Cook Station Bank in Crawford County failed (time not given) and was placed in the hands of the State Finance Commissioner. At the time the bank failed defendant, Watson, owed it certain notes, dates, amount and when due as follows: March 24, 1930, $ 50, due six months; April 18, 1930, $ 50, due six months; November 14, 1930, $ 270, due six months; December 13, 1930, $ 100, due six months. Defendant signed the $ 270 and $ 100 notes as surety for Emory Watson.

October 10, 1931, the bank obtained two judgments on these notes against defendant Watson, aggregating $ 571.45. We infer from the record that suits on the notes were filed by the commissioner after he took charge. On March 6, 1931, defendant Watson, conveyed the land in question to defendant, Kendall, his daughter, for a recited consideration of one dollar and other valuable considerations.

The petition is on the theory that the conveyance by Watson to his daughter is void as to creditors, and alleges that it was voluntary and without consideration and was made "for the purpose of hindering, delaying and defrauding creditors" of Watson "of which purpose said defendants were fully cognizant at the time such conveyance was made;" that Watson had no other property out of which the judgments could be satisfied "in whole or in part." Defendants filed separate answers, which are quite similar and, after general denial, set out the claimed consideration for the deed from Watson to his daughter. It does not appear that a reply was filed, but the cause was tried as though such was done.

We make our statement as to the evidence largely from what may be termed respondent's additional abstract. Plaintiffs appellants here, introduced the record of the judgments of the bank against Watson and used him as a witness. He testified that his wife, the mother of defendant, Kendall, was an invalid and that he "was not able to hire a trained nurse" to take care of her; that his daughter was married and was living with her husband in Iowa; that her husband died in February, 1929; that he attended the funeral in Iowa, and "prevailed upon her to come back and take care" of her mother; that he "hired her to do the work and wait on my wife." The daughter came to...