Riggs v. Price

• Decision Date: 15 March 1919
• Docket Number: No. 19411.,No. 19412.,19411.,19412.
• Citation: 277 Mo. 333,210 S.W. 420
• Parties: RIGGS v. PRICE.
• Court: Missouri Supreme Court

210 S.W. 420

277 Mo. 333

RIGGS v. PRICE.

No. 19411.

No. 19412.

Supreme Court of Missouri, in Banc.

March 15, 1919.

Appeal from Circuit Court, De Kalb County; Alonzo D. Burnes, Judge.

Suit by Zadock T. Riggs, trustee, against Ivie Price. From judgment rendered defendant appeals, and from a finding plaintiff appeals. Reversed, with directions.

Hewitt & Hewitt, of Maysville, for Price.

Williams & Robison, of Maysville, Kendall B. Randolph, of St. Joseph, and Edward G. Robison, of Maysville, for Riggs.

WALKER, J.

This appeal seeks a review of a judgment rendered in the circuit court of De Kalb county, in a suit brought by plaintiff, as trustee in bankruptcy of the estate of Thomas Price, to set aside as fraudulent deeds to certain land in said county, transferring the title to same to the defendant, the wife of Thomas Price. The trial court adjudged the deeds fraudulent and decreed that the title to the land was in the trustee, subject to a homestead interest of $1,500, a mortgage for $5,500 of prior date to said deeds, and a mortgage for $1,000 made by the defendant subsequent to the transfer of the land to her. Neither party being content with the findings of the trial court, both appealed; the defendant from the entire judgment, and the plaintiff from the finding as to the $1,000 incumbrance. A single review will suffice to determine all of the matters at issue.

Plectangs.—After the formal allegations, proper in a proceeding of this character, concerning which there is no controversy, the petition avers in substance the ownership by Thomas Price on October 8, 1913, of the land, describing it; that the same was incumbered by a mortgage theretofore given by him to secure a debt of $5,500; that, at the time of the making of the deeds, Thomas Price was indebted to various persons, firms, and corporations in the sum of $44,647, and was insolvent, and had no property with which to pay his debts; that, while so insolvent, he and his wife, Ivie Price, with the intent to hinder, delay, and defraud his creditors then existing, made a general warranty deed whereby, for a fictitious purported consideration of $7,500 they conveyed the land to one John Price, a brother; that the deed thereto was without consideration and was made and executed for the purpose of transferring the title of said land to grantor's wife,:vie Price; that, on the day immediately after the execution of the deed to John Price, the latter quitclaimed and released the land to Ivie Price for a purported consideration of $10; that no consideration in fact passed; that John Price was a mere conduit for the purpose of transferring the title to the land from Thos. Price to his wife, Ivie Price; that each of said conveyances was made while Thos. Price was insolvent, for the purpose of defrauding his creditors, and that his insolvency and the purpose of said transfers were known at the time to each of said grantees; that Thos. Price has no property out of which his creditors can satisfy their debts, and has not had since October 8, 1913; that the trustee has no adequate remedy at law to subject said land to the payment of the debts of Thos. Price, nor for obtaining assets with which the claims of his creditors may be satisfied; that the land cannot be subjected to the payment of Thos. Price's debts, and become available to the trustee in bankruptcy for that purpose, unless the conveyances aforesaid be annulled and set aside and the land declared to be the property of Thos. Price, bankrupt; that, at the time of said conveyances, the land was occupied by Thos. Price as a homestead and he resided thereon; that the value of same at the time, and at all times since, has been $12,500; that Thos. Price was entitled to a homestead therein of the value of $1,500; that the value of the land, exclusive of the mortgage for $5,500 and the homestead interest in same, is $5,000, which sum should be devoted to the payment of the claims of his creditors; that, of the indebtedness of Thos. Price existing at the time of said transfers, there has been adjudicated claims in bankruptcy in the United States District Court against his estate in the sum of $14,622.97; that additional claims have since been presented for allowance; that the entire assets of said estate, exclusive of the land, amount to no more than $166.

The prayer asks that the deeds to said land be canceled, and for naught held, and that Ivie Price take nothing thereby, except the value of the homestead, and that said property be ordered sold subject to the mortgage for $5,500, and that the proceeds, after paying Ivie Price $1,500, be paid to plaintiff, as trustee in bankruptcy for the benefit of the creditors of Thos. Price and for such other orders, judgment, and decree as are proper in the premises.

The answer admits the marriage relation; the ownership of the land; that it is the homestead of Thos. Price; that deeds were executed as stated, and the existence of the incumbrance. All other allegations are denied generally. After a hearing, the court took the case under advisement, and in October, 1915, rendered a judgment therein for plaintiff.

Judgment. —After formal findings as to the bankruptcy of Thos, Price, the trusteeship of plaintiff, and his authority as such herein, the court finds that the defendant is the wife of Thos. Price; his ownership of the land, describing it, and the conveyances of same, and his insolvency at the time; that the transfer to John Price and his deed to Ivie Price were made without consideration and for the purpose of placing the title to said land in the defendant, Ivie Price, and were voluntary and void as to the creditors of Thos. Price, and as to his bankrupt estate, and as to the plaintiff, as trustee of same; that Thos. Price and his wife, Ivie Price, the defendant, occupied said land as a home; that said Ivie Price is entitled to retain a homestead therein of the value of $1,500; that the deeds made by Thos. Price to John Price and by John Price to Ivie Price be canceled and for naught held, except as to the homestead; and that the title to said real estate be vested in plaintiff, as trustee in bankruptcy of the estate of Thos. Price, subject to the incumbrance of $5,500, and one for $1,000, and the homestead right of said Ivie Price.

It was developed by the testimony, but does not otherwise appear in the record, that the $1,000 mortgage on the land was placed thereon by the defendant after the fraudulent conveyance of same to her.

The Facts.—The facts disclose that Thomas Price was adjudged a bankrupt on his voluntary petition in the United States District Court for the Western District of Missouri March 19, 1914; that his indebtedness at the time the deeds to said land were made, and at the time of his adjudication as a bankrupt, was even greater than alleged in the petition; that his assets at said times were insufficient to satisfy same. In other respects, the facts are in substantial accord with the averments of the petition. The main issue at the trial was whether on the 8th day of October, 1913, the financial condition of Thomas Price was such as to endanger the claims of his creditors by the transfer of the title of said land to his wife, the defendant. Incidental to this issue are other matters of fact, a presentation and discussion of the legal force and effect of which will, where necessary to the determination of this case, be made in the opinion.

The defendant's assignments of error are as follows:

The absence of jurisdiction; the insufficiency of the petition; the improper admission on the part of the plaintiff, and exclusion on the part of defendant, of testimony; and the refusal to permit Thomas Price to testify on the part of his wife, the defendant. Other assignments, formal in their nature, are incidental to and dependent for their determination upon the conclusions which may be reached in regard to the foregoing. The plaintiff's assignment of error is that the judgment is not responsive to the pleadings.

I. Jurisdiction.—The defendant contends that the making of the deeds in controversy more than four months prior to the filing of the petition herein divested the bankruptcy court of power to direct the trustee to prosecute this action and that the state court consequently acquired none.

First, as to the validity of the act of the bankruptcy court: Upon an adjudication of bankruptcy, the decree becomes as immune from collateral attack as any other judgment. Chapman v. Brewer, 114 U. S. loc. cit. 169, 5 Sup. Ct. 799, 29 L. Ed. 83; Lamp Chimney Co. v. Brass Copper Co., 91 U. S. loc. cit. 661, 23 L. Ed. 339; Michaels v. Post, 88 U. S. [21 Wall.] 398, 22 L. Ed. 52Q; Marvin v. Anderson, 111 Wis. 387, 87 N. W. 226; Golden & Co. v. Loving, 42 App. D. C. 489; 5 Cyc. 237n; Collier's Bankruptcy (11th Ed.) pp. 12, 121. If possible, the conclusiveness of the decree is emphasized where, as here, the proceeding was voluntary. Not being subject, as a farmer, to the coercive provisions of the act, the bankrupt invoked the jurisdiction of the court (Bankruptcy Act July 1, 1898, c. 541, § 4a, 30 Stat. 547 [U. S. Comp. St. § 9588]), which is required to make an adjudication, or dismiss the proceeding, upon the filing therein of a petition (section 18g [section 9602]), accompanied as it was with a verified schedule of the bankrupt's property and the names of his creditors, and the statement that he owes debts he is unable to pay, and is willing to surrender all of his property for the benefit of his creditors (section 7, subd. 8 [section 9591]). Under this state of facts, the act of bankruptcy is held to have been committed upon the filing of the petition (Hanover Nat. Bk. v. Moyses, 186 U. S. loc. cit. 190, 22 Sup. Ct. 857, 46 L. Ed. 1113). The finality of the decree, therefore, obviates any objection to the general jurisdiction of the bankruptcy court, and, as a consequence, its authority to direct the trustee to institute the action at bar.

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