Schneider v. Patton

• Decision Date: 09 June 1903
• Citation: 75 S.W. 155,175 Mo. 684
• Parties: SCHNEIDER v. PATTON et al., Appellants
• Court: Missouri Supreme Court

75 S.W. 155

175 Mo. 684

SCHNEIDER v. PATTON et al., Appellants

Supreme Court of Missouri, Second Division

June 9, 1903

Appeal from Buchanan Circuit Court. -- Hon. A. M. Woodson, Judge.

Reversed and remanded.

Stauber Crandall & Strop and H. M. Ramey for appellants.

(1) The decree in this case can not be sustained because it is not responsive to the issues made by the petition. Ross v Ross, 81 Mo. 84; Reed v. Bott, 100 Mo. 62. (2) The petition is an ordinary bill to set aside an alleged fraudulent deed and to subject certain real estate to the lien of plaintiff's judgment. No allegations are made which justify a personal judgment. Dougherty v Adkins, 81 Mo. 411; Dumphy v. Kleinschmidt, 78 U.S. 610; Story's Eq. Pl., sec. 40. (3) Although the petition contained a prayer for general relief, yet the relief granted must in all cases conform to the special facts alleged. Duncan v. Fisher, 18 Mo. 404; McNair v. Biddle, 8 Mo. 257; Meade v. Knox, 12 Mo. 287; Williams v. Williams, 1 John. Ch. 111. (4) Even though the evidence sustained the decree, yet the decree is not based on the issues made by the pleadings. In this condition of the record the bill should have been dismissed. Miltonberg v. Morrison, 39 Mo. 71; Peckham v. Boffman, 11 Mich. 529; Irwin v. Childs, 28 Mo. 576. (5) Where the evidence sustained the decree but is not embraced in the issues made by the pleadings, the plaintiff should amend his bill or the bill should be dismissed. Newham v. Kenton, 79 Mo. 382. (6) Where fraud is charged either in fraud or equity the special fraudulent act complained of must be alleged. In this case the petition seeks to set aside a deed and subject certain real estate to the lien of plaintiff's judgment. No complaint is made of the conversion of the real estate into cash or the fraudulent appropriation of such money and conversion. Yet upon these facts alone the decree is based. Hoester v. Sammelman, 101 Mo. 824; Nichols v. Stevens, 123 Mo. 117; Wilson v. Polk County, 112 Mo. 138; Clough v. Holden, 115 Mo. 353; Smith v. Simms, 77 Mo. 269; Williams v. Railroad, 112 Mo. 496. (7) The bill having been founded upon the fraudulent title of Curtin, and the plaintiff having sued to set aside Curtin's deed, and this being the only fraud complained of, the finding of the court that Curtin had good title defeated the bill and it should have been dismissed for the reason that Curtin's title is the only issue raised by the pleadings. Muenks v. Bunch, 90 Mo. 500; Judy v. Gilbert, 79 Ind. 96. (8) The record in this case shows conclusively that plaintiff, before the commencement of this suit, had full knowledge of all the facts. The evidence also shows that plaintiff had a full, adequate and complete remedy at law by means of the writ of garnishment. For this reason the judgment should be reversed. Humphreys v. Anchor Milling Co., 98 Mo. 542; Dunlop v. Mitchell, 80 Mo.App. 393; Straub v. Simpson, 74 Mo.App. 230; Alnutt v. Leeper, 48 Mo. 319; Thias v. Siener, 103 Mo. 323; Mullen v. Hewitt, 103 Mo. 651; Board of Public Works v. Columbia College, 17 Wall. 530. (9) The plaintiff having commenced garnishment proceedings, could not, during the pendency of those proceedings, ask the interposition of a court of equity. Having elected to pursue his remedy at law, his election was final until the termination of the legal proceeding. Hargardine v. Warden, 151 Mo. 578; Bangs Milling Co. v. Burnes, 152 Mo. 350; Stokes v. Barnes, 132 Mo. 214; Mapes v. Burnes, 72 Mo.App. 411; Nansen v. Jacob, 93 Mo. 332. (10) This case should be reversed because of a defect of indispensable parties defendant. The only principle upon which the bill could be sustained at all, if it can be sustained, is because it is in effect a bill of discovery, and if it is a bill of discovery, Thomas Maney, the alleged fraudulent grantor, is an indispensable party. Pomeroy's Remedies and Remedial Rights, sec. 347; Wait on Fraudulent Conveyances (2 Ed.), sec. 129. (11) The court erred in rendering judgment for the amount of the $ 2,000 note. Where a fraudulent grantee has a bona fide claim which is secured, and the fraud was in a subsequent transaction, he will be allowed to retain his priority to the amount of his debt and prior security. Martin v. Turnbaugh, 153 Mo. 172; Van Keuren v. McLaughlin, 19 N.J.Eq. 187; Bank v. Harris, 6 La. Ann. 811; Ripley v. Severance, 23 Mass. 474; Smith v. Grimes, 43 Iowa 366; Bank v. Essex, 84 Ind. 144. (12) The court erred in charging appellant with the amount of cash received from the Curtin sale because appellant, having returned this cash to Maney, the alleged fraudulent grantor, before the filing of this bill, purged himself to any fraud as to said fund. Wait on Fraudulent Conveyances (2 Ed.), sec. 176; Swift v. Holdridge, 10 Ohio 231; Rayner v. Whicher, 88 Mass. 292; Thomas v. Goodwin, 12 Mass. 140. (13) The findings of fact and the judgment of the court are not supported by the evidence. It is the duty of the appellate court to exercise a supervision over the findings of fact and to review the evidence de novo. Estes v. Fry, 94 Mo. 266; Clark v. Bank, 57 Mo.App. 282; Blount v. Spratt, 113 Mo. 48; Gould v. Smith, 48 Mo. 43; Moore v. Davis, 51 Mo. 233; Knapp v. Publishing Co., 127 Mo. 53. (14) There is no evidence of fraud on the part of appellant. If a transaction consists as well with honest and fair dealing as with a fraudulent purpose, it will be referred to the better motive. Dallon v. Renshaw, 26 Mo. 533; Rumbolds v. Parr, 51 Mo. 592; Henderson v. Henderson, 55 Mo. 534; Ames v. Gilmore, 59 Mo. 537; Robinson v. Dryden, 188 Mo. 534; Page v. Dixon, 59 Mo. 43.

James W. Boyd for respondent.

(1) This is a suit in equity to subject property or its proceeds, in the hands of a fraudulent grantee, to the payment of judgments; and the decree is fully sustained by the petition, the evidence, and the facts found by the court. (2) When appellant took a deed to himself to conceal the debtor's lands from respondent's liens and to defeat payment of judgments, the judgment liens attached to said lands. R. S. 1899, secs. 2713-2714; Slattery v. Jones, 96 Mo. 216; Eneberg v. Carter, 98 Mo. 647; Woodward v. Mastin, 106 Mo. 324. (3) A fraudulent grantee is construed to be a trustee for the creditors, and as such is responsible for all his acts in disposing of the property fraudulently held by him. If he parted with it, he must account for its value. A court of equity follows the proceeds of the property and affords a remedy, by turning the legal owner into a trustee for the benefit of creditors. Jacob v. Smith, 89 Mo. 673; Bump on Fraudulent Conveyances (4 Ed.), sec. 623; Coale v. Moline Plow Co., 25 N.E. 1016; Solinsky v. Bank, 85 Tenn. 368; Mason v. Pieron, 69 Wis. 585; Chamberlain v. Jones, 114 Ind. 458; Decker v. Decker, 15 N.E. 307; Woodward v. Mastin, 106 Mo. 324. (4) A fraudulent grantee is liable in equity to a personal judgment for the proceeds of the property sold by him; and the petition fully and aptly states all the facts necessary to sustain such judgments. See citations under point 3. (5) The holding of the title to the debtor's land by the appellant constitutes a secret trust, and is fraudulent and void. R. S. 1899, secs. 3397-3398; Bank v. Powers, 134 Mo. 432; Martin v. Estes, 132 Mo. 402; Roberts v. Barnes, 127 Mo. 405; Pattison v. Letton, 56 Mo.App. 325; Higgins v. Railroad, 43 Mo.App. 561; State ex rel. v. Durant, 53 Mo.App. 493; Donovan v. Dunning, 69 Mo. 406; Bump on Fraud. Con., sec. 55; McDonald v. Hoover, 142 Mo. 484; Woodson v. Carson, 135 Mo. 521. (6) When appellant took title to debtor's property to hinder and delay his creditors, then if he had any claim against the debtor, he could not enforce it against the property or its proceeds; but in law he held the entire property in trust for the benefit of the creditors. State ex rel. v. Hope, 102 Mo. 410; Seger's Sons v. Thomas Bros., 107 Mo. 635; Nat. Tube Works Co. v. Mach. Co., 118 Mo. 365; Boland v. Ross, 120 Mo. 205; Bump on Fraud.Con., sec. 55; Woodson v. Carson, 135 Mo. 521; McDonald v. Hoover, 142 Mo. 484. (7) The facts found by the circuit court are fully sustained by the evidence, and this court will accord deference to this finding by that court. Sharklin v. McCracken, 151 Mo. 587; Hartly v. Hartly, 143 Mo. 216. (8) No motion for a new trial was made after the final decree was rendered. State ex rel. v. Cline, 140 Mo. 502; Black on Judgments, secs. 3-4; State v. Sutterfield, 54 Mo. 394; Railroad v. Railroad, 94 Mo. 542; Stickler v. Tracy, 66 Mo. 465.

OPINION

BURGESS, J.

This is a suit by a judgment creditor of one Thomas Maney, the object of which is to subject certain lands and lots of land owned by said Maney to the lien and payment of certain judgments held and owned by the plaintiff against him.

The petition is as follows:

"Plaintiff for his amended petition states that on or about the 3d day of October, 1893, the State of Missouri, at the relation and to the use of Francis T. Conrad, recovered judgment in the circuit court of Buchanan county, Missouri, against Thomas Maney and others, for the sum of $ 13,413.97, which said judgment was based upon the bond of James Walsh, as administrator of the estate of Thomas Conrad, deceased, which said bond was in the sum of sixty-five thousand dollars, but the amount of the recovery for the breach of said bond was in the sum herein above stated. That on or about said date, the State of Missouri, at the relation and to the use of Martha Clarke, recovered judgment in the said court against Thomas Maney and others on the same bond for the breach thereof, for the sum of $ 7,613.51. And the State of Missouri, at the relation and to the use of Agnes Conrad, about said date recovered in said court judgment against said Thomas Maney on said bond for damages...