Potter v. McDowell

• Decision Date: 31 October 1860
• Citation: 31 Mo. 62
• Parties: POTTER et al., Appellants, v. MCDOWELL, Respondent.
• Court: Missouri Supreme Court

31 Mo. 62

POTTER et al., Appellants,

v.MCDOWELL, Respondent.

Supreme Court of Missouri.

October Term, 1860.

1. To avoid a deed on the ground that it operates to hinder and delay the creditors of the grantor therein, it is not necessary to show that the act of the grantor therein is corruptly fraudulent; if the deed is voluntary and hinders and delays creditors, it is fraudulent in law, irrespective of the motives of the grantor.

2. A husband can not, to the prejudice of his creditors, settle on his wife, without a valuable consideration, property that may have come to him by means of the marriage.

3. Where the invalidity of the deed, as being fraudulent and void as to creditors, rests upon extrinsic facts, it is a question, under proper instructions, for the jury.

4. A deed of trust made to secure an indebtedness due from the grantor is not rendered void by the fact that time is given within which to execute the trust, provided the time is not unreasonable; what is a reasonable time must depend upon the character of the property and the circumstances of the case.

5. To make a voluntary deed fraudulent and void as to existing creditors, it is not necessary that the assignor should have been insolvent at the time of its execution. If a debtor is in embarrassed circumstances, and makes a voluntary conveyance, and is afterwards unable to meet his debts, owing at the time of the assignment, in the ordinary course prescribed by law for their collection, or is reduced to such a condition that an execution against him would be unavailing, such conveyance is void as to those debts, and the property conveyed is subject to their payment.

6. Declarations made by a grantor at the time of the execution of a deed of assignment are admissible in evidence as a part of the res gestæ, on an issue raised as to the validity of the deed on the ground of its hindering and delaying creditors.

Appeal from St. Louis Circuit Court.

This was a suit by attachment brought by John C. Potter and others against John McDowell. The petition was filed April 7, 1858. The attachment was on the ground that the defendant had “fraudulently conveyed or assigned his property or effects so as to hinder and delay his creditors.” Certain lots, seven in number, on St. Ange avenue, in St. Louis, an undivided fifth part of a farm known as the Stevens farm, and other real estate, besides personal property, shares of stock, &c., were attached. A. J. L. Stevens was summoned as garnishee.

By deed dated October 14, 1857, McDowell and wife conveyed seven lots on St. Ange avenue, St. Louis, to said A. J. L. Stevens in trust for the sole and separate use of Mrs. McDowell. The consideration mentioned is five thousand dollars. By two other deeds of the same date said McDowell and wife conveyed an undivided interest of one-fifth in certain lands, including a farm known as Stevens' farm; also certain negroes, to said A. J. L. Stevens in trust for the sole and separate use of Mrs. McDowell. The St. Ange lots were owned by Mr. McDowell. The one-fifth interest in the other real estate came to said Mrs. McDowell as one of five heirs of _______ Stevens, deceased. The negroes came to McDowell in right of his wife. On February 25, 1858, McDowell and wife conveyed household furniture to secure a note to A. J. L. Stevens for $4,606.43, payable one day after date, dated February 19, 1858. On March 31, 1858, McDowell and wife conveyed to Stevens, in consideration of $8,900, the slaves and one-fifth of Stevens' farm previously conveyed; also the St. Ange property for an expressed consideration of $25,000. Five notes for five thousand dollars each were given by Stevens for the St. Ange property, and a deed of trust given by him to secure them. Stevens, sworn on behalf of plaintiff as a witness, was asked, on cross-examination, the following question: “Did you purchase your interest in the farm and house in good faith?” The defendant answered, against the objection of the plaintiff: “Yes, I purchased them in good faith; it was on my part, and, I think, on McDowell's also.” Much testimony was adduced to show the embarrassed circumstances of McDowell in October, 1857, and subsequently, and the circumstances attending the execution of the deeds set forth above, and the considerations therefor.

The court, on the motion of the plaintiffs, gave the following instructions: “1. A married man who owns or has an interest in property by virtue of his marriage, when in embarrassed circumstances, can no more convey such property or interest, as against his existing creditors, for the benefit of his wife, than he could convey property owned by himself which he may have acquired otherwise. 2. All voluntary conveyances made by a man in insolvent or greatly embarrassed circumstances are void as to existing creditors. 3. If prior to the institution of this suit the defendant conveyed any property or any interest he had in any property, for the purpose of protecting or securing such property or interest from the claims of his creditors, then the jury will find for the plaintiffs. 4. A conveyance of property may be absolutely void as to the creditors of the person executing such conveyance, although the person to whom the conveyance is made pays more than the value of the property so conveyed, and is absolutely void as to such creditors if such conveyance was executed for the purpose of hindering or delaying creditors, and the purchaser knows of such intention when the purchase is made. 5. If the jury find from the evidence that, before the institution of this suit, John McDowell, the defendant, executed either of the deeds read in evidence for the purpose of hindering or delaying his creditors; or that said McDowell conveyed or transferred any of his property, or negotiable paper, or debts due him, for the purpose of hindering or delaying his creditors, or for the purpose of com pelling his creditors to give him a longer time for the payment of their debts than they were inclined to do; or if the jury find from the evidence that any of McDowell's property, at the institution of this suit, had been conveyed for the purpose of deceiving said McDowell's creditors as to the true situation of said McDowell's property or his pecuniary condition so far as to hinder or delay the collection of their debts, then, in either case, the jury will find for the plaintiffs. 6. If the jury find from the evidence that either of the deeds read in evidence from the defendant to his wife's trustee was executed, without any valuable consideration therefor, for the purpose of enabling the wife of said defendant to have the use, enjoyment or profit arising from said property beyond the control of the then existing creditors of said defendant, they will find for plaintiffs. 7. If the jury find from the evidence that on the 14th day of October, 1857, defendant was insolvent, and when insolvent executed any of the deeds read in evidence to his wife's trustee, without any valuable consideration therefor, then said conveyance is fraudulent and void as to the creditors of said defendant, and the jury will find for the plaintiffs. 8. If the jury find from the evidence that the defendant, in October, 1857, or at any other time between that date and the institution of this suit, had conveyed any portion of his property for the purpose of keeping it from his creditors, even if the jury shall find that the property was conveyed to secure a bona fide debt, they will find for the plaintiffs. 9. If the jury find from the evidence that either of the deeds from defendant to A. J. L. Stevens was made to secure a debt honestly due said Stevens, but that said McDowell's motive in making said conveyance was to keep said property from his other creditors, or that said McDowell made such conveyance for the purpose, in part, of obtaining the use of said property, or any portion of the same, beyond the reach of his creditors, they will find for the plaintiffs.”

The court, of its own motion, gave the following instructions: “1. The only issue submitted to this jury, and which they are to try, is whether the ground contained in the affidavit, upon the writ of attachment issued in the case, is true or not. 2. The writ of attachment in this case was sued out upon the ground that the defendant had, previously to the institution of this suit, fraudulently conveyed or assigned his property so as to hinder and delay his creditors. If you find that the above mentioned ground of attachment is true, you will find the issue for the plaintiffs. If you find that it is untrue, you will find the issue for the defendant. 3. The mere belief of the affiant, who made the affidavit in this case, is not in question; but the proposition for the jury to try is whether, prior to the institution of this suit, the defendant had, in fact, fraudulently conveyed or assigned his property or effects so as to hinder or delay his creditors. To entitle the plaintiffs to a verdict in their favor, it is incumbent upon them to prove the truth of the above proposition to the satisfaction of the jury; and unless the jury find the above proposition to be true, they will find a verdict for the defendant.”

The court, at the instance of the defendant, instructed as follows: “1. Before the jury can find for the plaintiffs in this case, they must believe from the evidence in the case that the defendant, John McDowell, conveyed or assigned his property or effects with a fraudulent intent, and it devolves upon the plaintiffs to prove this to the satisfaction of the jury. 2. If the defendant executed the deed to Andrew J. L. Stevens, dated March 31, 1858, then the defendant was legally bound to pay the taxes on the premises therein mentioned for the year 1858. 3. A debtor may lawfully pay a just debt to any one of his creditors in preference to others; and any payment made in good faith by a debtor to one creditor in preference to others, whether made in goods, money, property, or other effects,...