Peikert v. Repple

• Decision Date: 01 April 1938
• Docket Number: No. 35509.,35509.
• Citation: 114 S.W.2d 999
• Parties: WILLIAM F. PEIKERT, Appellant, v. HARRY REPPLE ET AL.
• Court: Missouri Supreme Court

114 S.W.2d 999

WILLIAM F. PEIKERT, Appellant, v. HARRY REPPLE ET AL.

No. 35509.

Supreme Court of Missouri.

Division One, April 1, 1938.

Appeal from Circuit Court of City of St. Louis. — Hon. Robert J. Kirkwood, Judge.

REVERSED AND REMANDED (with directions).

Frank Coffman for appellant.

(1) An appeal from decree in equity will be heard de novo on merits; appellate courts have supervisory control of questions of facts in such cases. Especially is this true when there has been no finding of fact by the chancellor. Snow v. Funck, 41 S.W. (2d) 4; Breit v. Bowland, 100 S.W. (2d) 599; Benne v. Schnecko, 100 Mo. 258; Reynolds v. Stepanek, 99 S.W. (2d) 68. (2) As to the plaintiff the execution of said deeds of trust by Repple was utterly void. Sec. 2117, R.S. 1929. (3) Under the facts of this case defendant Heldmann had notice of the fraudulent purpose of defendant Repple. It does not matter, therefore, that he actually paid Repple money for the notes and deeds of trust (if he actually did), because, with notice, he is a participant in the fraud. Cole v. Cole, 231 Mo. 256; Munford v. Shelton, 9 S.W. (2d) 907; Farmers' Bank of Higginsville v. Handly, 9 S.W. (2d) 880. (4) Even if defendant Heldmann actually parted with his money for the deeds of trust, as he claimed, in contemplation of equity, he did so with notice, because: (a) He had an opportunity to make inquiry as to Repple's purpose in selling the deeds of trust; the naturalness of such inquiry furnishes evidence of notice. Leavitt v. LaForce, 71 Mo. 356; Berry v. Ry. Co., 124 Mo. 337. (b) He was apprised of the fact that Repple needed money and needed it badly; that Repple was selling $6000 worth of securities for $4500; that Repple was in possession of notes and mortgages, of which he was the maker, though they had been made to others; that there had been no consideration for their execution in the inception; these facts would suggest the existence of other facts. If, therefore, Heldmann failed to make inquiry, it was gross negligence and tantamount to notice. Conn. Mut. Life Ins. Co. v. Smith, 117 Mo. 293; Memphis Loan & Building Assn. v. Arnett, 169 Mo. 212; Klauber v. Schloss, 198 Mo. 513; Leavitt v. La Force, 71 Mo. 353; Hedrick v. Beeler, 110 Mo. 98; Berry v. Ry. Co., 124 Mo. 337. (5) The notes and deeds of trust themselves disclosed they were made to straw parties and had been left in the hands of the maker, Repple. Such real estate transactions should always be viewed with suspicion. Ryan v. Stubblefield, 100 S.W. (2d) 446. (6) Under the facts of this case the court erred in dismissing plaintiff's bill and refusing him the relief asked. Howard v. Sweigart, 197 S.W. 46; Farmers' Bank of Higginsville v. Handly, 9 S.W. (2d) 880; Matz v. Miami Club Restaurant, 108 S.W. (2d) 975; Munford v. Shelton, 9 S.W. (2d) 907; Cole v. Cole, 231 Mo. 256; Reid, Murdock & Co. v. Lloyd & Moorman, 52 Mo. App. 284; Oldham v. Wade, 273 Mo. 245; Milling Co. v. Burnes, 144 Mo. 192; Findley v. Findley, 93 Mo. 493. (7) The method of the alleged purchase by Heldmann from Repple was so out of the ordinary way of doing business in such matters that the method itself was a badge of fraud. Matz v. Miami Club Restaurant, 108 S.W. (2d) 975; Hendrix v. Goldman, 92 S.W. (2d) 736. (8) The burden of proving a bona fide purchase from a fraudulent grantor rests on the defendant affirmatively pleading it. Parish v. Casner, 282 S.W. 412; Conn. Mut. Life Ins. Co., v. Smith, 117 Mo. 293; Ilgenfritz v. Ilgenfritz, 116 Mo. 439.

Albert F. Muench for William J. Heldmann.

(1) Fraud is never presumed, but must be proved by clear and convincing evidence, and he who charges fraud has the burden of so proving it. Stahlhuth v. Nagle, 229 Mo. 570, 129 S.W. 690; Farmers & Merchants Bank of Festus v. Funk, 92 S.W. (2d) 589; Mansur-Tebbetts Imp. Co. v. Ritchie, 143 Mo. 587, 45 S.W. 634; Jones v. Nichols, 280 Mo. 653, 216 S.W. 964; Gockel v. Gockel, 66 S.W. (2d) 867, 92 A.L.R. 784; Gittings v. Jeffords, 292 Mo. 678, 239 S.W. 84; Hardwicke v. Hamilton, 121 Mo. 473, 26 S.W. 342; McCaw v. O'Malley, 298 Mo. 401, 249 S.W. 41; Brown v. K.C. So. Ry. Co., 187 Mo. App. 104, 173 S.W. 73; Walsh v. Walsh, 285 Mo. 181, 226 S.W. 236; Maupin v. Provident Life & Acc. Ins. Co., 75 S.W. (2d) 593; Allen Estate Assn. v. Boeke & Son, 300 Mo. 575, 254 S.W. 858; Reger v. Reger, 316 Mo. 1310, 293 S.W. 414. (2) While the appellate court in an equity case may review the evidence and facts, yet, in determining the weight to be given to oral and conflicting testimony, deference will be given the opinion of the trial court thereon and a finding or decree of the judge or chancellor on conflicting evidence will not be disturbed unless clearly erroneous or against the overwhelming weight of the evidence. Taylor v. Crockett, 123 Mo. 300, 27 S.W. 620; Price v. Morrison, 291 Mo. 249, 236 S.W. 297; Carpenter v. Kendrick, 299 Mo. 95, 252 S.W. 646; Pfotenhauer v. Ridgway, 307 Mo. 529, 271 S.W. 50; Cuthbert v. Holmes, 14 S.W. (2d) 444; McKinney v. Hawkins, 215 S.W. 250; Daudt v. Steiert, 205 S.W. 222; Williamson v. Frazee, 294 Mo. 320; Hunnell v. Zinn, 184 S.W. 1154; Creamer v. Bivert, 214 Mo. 479, 113 S.W. 1118; Brauner v. Klaber, 49 S.W. (2d) 169; Klaber v. Booth, 49 S.W. (2d) 181; Manahan v. Manahan, 52 S.W. (2d) 825; Blackiston v. Russell, 44 S.W. (2d) 22; Friedel v. Bailey, 44 S.W. (2d) 9; Norton v. Norton, 43 S.W. (2d) 1024; Kent v. Crockett, 274 S.W. 460; Snow v. Funck, 41 S.W. (2d) 2; Vining v. Ramage, 319 Mo. 65, 3 S.W. (2d) 712; Webb v. Cotton, 308 Mo. 272, 271 S.W. 768; Woodruff v. Cole, 307 Mo. 19, 269 S.W. 599; Scott v. Hill, 50 S.W. (2d) 110.

HYDE, C.

This is an action in equity to set aside two trust deeds as fraudulent conveyances and to enjoin the foreclosure commenced. The petition also contained counts in ejectment and to determine title. Parties, other than defendant Repple (owner and mortgagor of the real estate), were his two daughters (cestuis in the trust deeds, one note made to each), the trustee named (who had advertised foreclosure), and the unknown owner or owners of the notes. A temporary injunction against foreclosure was granted when this suit was filed. Thereafter defendant, Heldmann, claimed to own both notes, asked to be made a party, and was permitted to file answer asserting such claim. No service was had on the original cestuis and suit was dismissed as to them. Other defendants originally named made default. The court entered a decree finding "that the plaintiff is not entitled to the relief prayed for" and ordered "the temporary restraining order ... dissolved, and plaintiff's bill ... dismissed." Plaintiff has appealed.

Plaintiff's evidence showed that plaintiff, his wife, and Repple were sureties on an appeal bond, approved September 21, 1932, in a case appealed to this court. This appeal was dismissed here May 17, 1935, "for failure to comply with the rules," and this court's mandate filed June 1, 1935. Suit on the appeal bond was brought and lis pendens filed against the land involved herein, as well as land of plaintiff, June 28, 1935. Judgment was entered October 22, 1935, for $8215.50 against all sureties. Plaintiff paid this judgment and on April 15, 1936, obtained judgment against Repple for $2832.35 for his proportionate liability on the bond. Execution was issued, and thereafter levy was made on the land herein involved. It was sold September 11, 1936, to plaintiff for $2000 and he received a sheriff's deed for it. Repple had owned one of the properties involved for ten years prior to the time he qualified on the appeal bond and bought the other about four years before for $8700. He improved both properties at that time at a cost of around $10,000. They were double brick houses with two stories, ten rooms and five garages. He owned and lived in another house between these two. There was evidence tending to show that Repple had no other property in Missouri; and that these trust deeds with prior encumbrances practically equaled the present value of the properties.

Plaintiff testified, and had corroborating evidence of two witnesses to so show, that Repple came to see him at his tavern in April, 1935, and that they had the following conversations: "He says: `We are going to lose that case in the Supreme Court,' and he says, `We are liable for the bond.' He says, `I am going to put some phony mortgages on my property so they can't touch it.' ... I told him no, I wouldn't put none on mine... . . He came down a couple of days afterward with another gentleman, and he says, `We are coming up to the house and sign this up,' and he says, `You might as well come along and do that yourself and save your property.' So I said, `No, I won't do it,' and then he came down a couple of days afterward and he says, `Mine is all fixed up,' he says, `They ain't collecting from me.'" Repple did make two trust deeds dated April 2, 1935, each covering one of his houses and each securing a $3000 note due in three years with six semi-annual interest notes for $90 each. Each of these notes and trust deeds were made to a daughter of Repple. Repple did not appear or testify, but the real estate broker who prepared these notes and trust deeds for him said that they were made to Repple's daughters as straw parties. He said that Repple first wanted to have them made to the real estate broker's secretary but that he told him he did not want that and suggested, "`You have got two daughters here,' to make them out each one in their name." From this real estate broker's testimony it appears that these trust deeds were second mortgages. He also testified that Heldmann brought him the trust deeds in July or August, 1936, and that he advised him to get an attorney and foreclose. He said: "He came in a week after and told me to go ahead and foreclose. I told him he needed about a hundred dollars, and he said he didn't have a hundred, to go ahead and foreclose and I would get the money later on. So he did bring the deeds of...