Oldham v. Wade

• Decision Date: 02 February 1918
• Docket Number: No. 17995.,17995.
• Citation: 200 S.W. 1053,273 Mo. 231
• Parties: OLDHAM et al. v. WADE et al.
• Court: Missouri Supreme Court

200 S.W. 1053

273 Mo. 231

OLDHAM et al. v. WADE et al.

No. 17995.

Supreme Court of Missouri. In Banc.

February 2, 1918.

Cross-Appeals from Circuit Court, Pettis County; Hopkins B. Shain, Judge.

Suit by Pascal W. Oldham and another against Harvey E. Wade and others. From the decree, both parties appeal. Reversed and remanded, with directions.

The petition in this case was lost from the files, but it is agreed that its allegations duly set forth facts charging that Lucile Wade fraudulently disposed of certain land lying in Pettis county, Mo., and described in petition to her husband, Harvey E. Wade, by means of a deed first made by the Wades to Roy Underwood, who afterwards conveyed the property to defendant Harvey E. Wade, who afterwards conveyed the same to Foster, who incumbered the same with a fraudulent mortgage for $4,000, securing a note for that sum to defendant Wade, in which said mortgage or deed of trust George Barnett, Jr., was trustee. The petition also charged that plaintiffs were judgment creditors of defendant Lucile Wade; that after said fraudulent conveyance, the sheriff of Pettis county aforesaid levied upon said real estate and sold the same to plaintiffs under an execution. The petition prayed that all the title to said real estate in defendants be divested from them and invested in plaintiffs, and also prayed for a decree to quiet title against the claims of defendants.

The answer contains a general denial, except in respect to those matters admitted to be true. It admits the conveyances described in petition, denies they were fraudulent, and alleges other defenses which will be considered hereafter. The answer charges that the sale under execution to plaintiffs was fraudulent; that the Pettis land was worth $4,500, and plaintiffs only paid $100 for same; that said execution sale was void, etc. They ask to have the sheriff's deed to plaintiffs set aside and canceled, and that defendant H. E. Wade be decreed the owner of said land, etc. The reply is a general denial of the new matter in the answer.

The trial court found that Mrs. Wade was the owner in fee of the real estate in controversy, subject to an equity lien for the full amount of plaintiffs' judgment and costs. Cross-appeals were taken by both plaintiffs and defendants.

A. W. Gray, of Kansas City, and G. W. Barnett, of Sedalia, for Wade and others. Charles E. Yeater, of Sedalia, for Pascal W. and James R. Oldham.

RAILEY, C. (after stating the facts as above).

This case presents some complex questions, which are difficult of proper solution. If, upon an examination of the record, we should find that it is free from fraud upon the part of defendants, our conclusion as to the disposition of the case would not be attended with any difficulty, but, on the other hand, if we should conclude that the charges of fraud lodged by plaintiffs in the complaint are well founded and sustained by the evidence, the question as to how a court of equity on the record before us should frame its decree based upon such facts is not so easy of solution.

I. Have the plaintiffs, by the evidence, sustained the charges of fraud made against defendants in regard to the disposition of the Pettis county land? It may not be deemed inappropriate at the outset to state some general principles of law applicable to this class of cases. Section 2881, R. S. 1909, which is the same as section 3398, R. S. 1899, reads as follows:

"Every conveyance * * * of any estate or interest in lands, * * * made or contrived with the intent to hinder, delay or defraud creditors of their lawful actions, damages, forfeitures, debts or demands, * * * shall be from henceforth deemed and taken, as against said creditors and purchasers, prior and subsequent, to be clearly and utterly void."

Section 2886, R. S. 1909, provides, that:

"This article shall not extend to any estate or interest in any lands, * * * which shall be upon valuable consideration, and bona fide and lawfully conveyed; nor shall it be construed to avoid any deed, as against any subsequent bona fide purchaser from the grantee for valuable consideration, and without any notice of fraud."

In construing the provisions of above statute in the leading case of Burgert et al. v. Borchert et al., 59 Mo. loc. cit. 83, 84, Judge Sherwood very forcefully announces the following principles of law applicable thereto:

"While it is undoubtedly true as a general legal proposition that `fraud is not to be presumed, but must be proved by the party alleging it,' yet it is equally true that fraud is seldom capable of direct proof, but for the most part has to be established by a number and variety of circumstances which, although apparently trivial and unimportant, when considered singly, afford, when combined together, the most irrefragable and convincing proof of a fraudulent design."

Since the enactment of section 8304, R. S. 1909, known as the Married Woman's Act of 1889, husband and wife have had the legal right to deal with each other in buying and selling land as though she were a feme sole, where the conveyance is made in good faith and without fraud. But, as we recently announced in the case of Barrett v. Foote, 187 S. W. loc. cit. 70:

"In dealings between father and son, as between husband and wife, where the rights of creditors are involved, their acts should be closely scrutinized. Bank v. Fry, 216 Mo. loc. cit. 45, 115 S. W. 439; Cole v. Cole, 231 Mo. 236, 132 S. W. 734; Ice & Cold Storage Co. v. Kuhlmann, 238 Mo. loc. cit. 697, 698, 142 S. W. 253."

In regard to the question of the debtor's solvency, in considering cases of this character, we stated the law clearly in Eddy v. Baldwin, 32 Mo. loc. cit. 374, as follows:

"The law is practical and looks to the attainment of practical results; and a solvency which it cannot employ in the payment of the debt of an unwilling debtor is certainly not distinguishable by any valuable difference from insolvency. The term `solvency' in its application to cases like this implies as well the present ability of the debtor to pay out of his estate all of his debts as also such attitude of his property as that it may be reached and subjected by process of law without his consent to the payment of such debts."

The above principle of law is sustained by many subsequent decisions of this court, which will be found collated in Barrett v. Foote, 187 S. W. loc. cit. 69. It is well to remember this principle of law in construing the result of the dealings between defendant Wade and his wife, in which she attempted to convey to her husband all her property which might have been reached on execution under plaintiffs' judgment against her. Other important principles of law applicable to the case will be referred to and considered later. Keeping in mind the above principles of jurisprudence, we will turn to the evidence and consider the charges of fraud made against defendants.

The plaintiffs were owners of lots 43 and 44 of Oldham's addition to Kansas City, Mo., and on January 28, 1905, sold to Mrs. Wade the above lots for $600, and took her note for said amount, due on or before two years from said date. Her husband was then absent from the state. No mortgage or deed of trust was taken to secure said note, nor was any vendor's lien reserved. The lots were conveyed to Mrs. Wade by deed dated January 28, 1905. On June 14, 1905, Wade and wife conveyed said lots to Mrs. Randall, and the latter on same day conveyed the same to Mr. Wade. Mrs. Randall paid no consideration for the lots, but was simply the conduit for transferring the title from Mrs. Wade to her husband. Mr. Wade testified that he returned from South America about the 13th or 14th of February, 1905; that his wife told him about having bought the lots; that he brought with him $800 in currency, which was placed in the bureau drawer; that he owed his wife $800 for money formerly borrowed from her. He says that shortly after his return home Pascal W. Oldham came to his house to collect the $600 for the lots, and that his wife took $600 of the money in the bureau drawer to pay Oldham. She was afterwards sued upon the above note and a personal judgment rendered against her on March 10, 1909, for $748.20. Defendants in their brief in speaking of said suit say:

"The suit against Mrs. Wade in Jackson county was filed on July 16, 1907, and on July 20th, four days thereafter, Mr. Wade purchased this land from his wife."

The land referred to is the real estate now in controversy.

The writ of summons in the above suit was dated July 16, 1907. We are satisfied from the testimony that both Mr. and Mrs. Wade, when the suit was brought against her in Jackson county, Mo., on July 16, 1907, knew before she attempted to sell the land in controversy to her husband on July 20, 1907, that Mrs. Wade was being sued on the $600 note. After the above suit was brought, Wade was joined as a codefendant and a vendor's lien sought against said lots. He claimed to be an innocent purchaser of said lots for value and without notice that his wife was indebted to plaintiffs for same. The trial court sustained his contention, the cause was dismissed as to him, and a personal judgment rendered against his wife, as aforesaid. The question as to whether Mr. Wade was an innocent purchaser for value of the land in controversy was not an issue in the Jackson county litigation.

Let us return to the 20th of July, 1907, when Mr. Wade claims to have purchased from his wife the land involved herein, and ascertain how matters then stood. H. E. Wade was not only the husband of Lucile Wade, but the latter largely depended upon him for advice in regard to business matters. She testified upon this subject as follows:

"I don't know whether I could very intelligently explain to the court about my sale of these two Kansas City lots to Mr. Wade, and also this Pettis county land and about what I received in exchange for them, or not. I know so little about it, and I left...