Shaw v. Tracy

• Decision Date: 31 October 1884
• Parties: SHAW et al., Plaintiffs in Error, v. TRACY et al.
• Court: Missouri Supreme Court

83 Mo. 224

SHAW et al., Plaintiffs in Error,

v.TRACY et al.

Supreme Court of Missouri.

October Term, 1884.

Appeal from Saline Circuit Court.--HON. W. T. WOOD, Judge.

AFFIRMED.

Samuel Boyd for plaintiff in error.

The deed from Charles Lewis and wife to Sally G. Lewis was a valid one as to the parties thereto and so far as Henry B. Lewis was concerned, even though void as to the existing creditors of the latter. Henderson v. Henderson, 13 Mo. 151; McLaughlin v. McLaughlin,16 Mo. 249; Reid v. Mullins, 48 Mo. 344; Hall v. Callahan, 66 Mo. 323. The deed of trust from Sally G. Lewis and her husband to Edwards, trustee, operated only to convey the interest of said Sally in the land and her interest was merely a life estate. R. S., 1879, sec. 669; Brumley v. Thomas, 63 Mo. 390. The deed of trust to defendant, Edwards, on its face shows the intention of the parties to convey the interest of Sally G. Lewis which she acquired by the deed of Charles Lewis, and not any interest of H. B. Lewis. He was joined in the execution of the deed, simply to enable her to convey, as required by statute. Hence the cases of Howe v. Waysman, 12 Mo. 170, and Henderson v. Dickey, 50 Mo. 161, do not apply to this case. Even though the conveyance from Charles Lewis to Sally G. Lewis, may have been in fraud of the creditors of Henry B. Lewis, yet said deed was valid as to all other persons, defendants Tracy and Edwards included. They were not creditors of Lewis at the time, nor do they occupy the position of subsequent creditors or purchasers within the meaning of the statute concerning fraudulent conveyances. The evidence shows that they gave the credit and took the deed of trust with a full knowledge and notice that the title to the land was in Sally G. Lewis for life with remainder to her children, and that Henry B. Lewis had no interest in said land or power to convey or encumber it. And the evidence does not show that Sally G. Lewis or her children or any of them were privy to or had any knowledge of the fraudulent acts of Henry B. Lewis, or were parties thereto. The evidence fails to show that defendants, Edwards and Shaw, are or can be in any way affected by any of the fraudulent acts of Henry B. Lewis. R. S., sec. 2498. The deed of trust from Sally G. Lewis to defendants, conveyed only and was intended to convey only the life estate of Sally G. Lewis, and such life estate, having by the death of Sally G. Lewis terminated, and the deed of trust not specifying in terms direct and positive that such life interest alone was intended to be conveyed, operates now as a cloud upon the title of plaintiffs and their co-tenants; and is such a cloud as a court of equity should remove. Peirsoll v. Elliott, 6 Peters 96; 1 John. Ch. 517.

W. D. Bush for defendants in error.

(1) The transactions between Charles Lewis and H. B. Lewis, which resulted in the deed to Sally G. Lewis, were in fraud of creditors, and the land was therefore really the property of H. B. Lewis and was subject to his debts both prior and subsequent. Henderson v. Dickey, 50 Mo. 161; Howe v. Waysman, 12 Mo. 169. (2) The money of Tracy went to discharge a debt whose history makes it a part of the purchase money, and it was so understood when the money was borrowed. (3) If the deed of trust only conveyed the life interest of Sally G. Lewis in the land as maintained by the plaintiff (because of the recitals in Charles Lewis' deed to her limiting her estate to her life), then this trust deed is not a cloud on the title; and being no cloud upon the title the plaintiff's bill was properly dismissed. Gamble v. St. Louis, 12 Mo. 617; Merchants' Bank v. Evans, 51 Mo. 335; Dunklin County v. Clark, 51 Mo. 60; and Wells v. Weston, 22 Mo. 384. If the plaintiff's theory of the case is correct, then the deed of trust would not be a cloud upon the title, as both parties claim title through the record, and if the trust deed could only convey the life interest of Sally G. Lewis, she being dead, there could be no cloud to be removed. Clark v. Covenant Mutual Life Insurance Co., 52 Mo. 272; Graham v. City of Carondelet, 33 Mo. 262; Peirsoll v. Elliott, 6 Peters 98; Ward v. Dewey, 16 N. Y. 528.

RAY, J.

It appears from the record in this case that in October, 1864, Charles B. Lewis, being seized in fee of the legal title to certain real estate in Saline county, Missouri, in trust for the use and benefit of his brother, Henry B. Lewis, at the instance of his brother conveyed the same to Sally G. Lewis, the wife of his said brother, in trust, for the sole and separate use of the wife during her life, with remainder in fee to her children at her death. In March, 1871, Sally G. Lewis and her husband, Henry B. Lewis, conveyed the property in fee to the defendant, Edwards, in trust for the defendant, Tracy, to secure $700.00 that day borrowed by them from said Tracy, and for which they, also, gave their promissory note, both these deeds being duly acknowledged and recorded in the proper office at the time.

In 1875, Sally G. Lewis, the wife, died, leaving the plaintiffs, Alice Shaw and Pauline Stevenson, as her only surviving children, and the defendants, Ella, Joseph and Sally Vaughn, as her only grandchildren by a deceased daughter. In 1877, the plaintiffs brought this suit to declare void, as to them, said deed of trust to Edwards for the benefit of Tracy, on the ground that the same was made in fraud of their rights, and is a cloud upon their title to the said real estate, which they claim in fee since the death of their mother, under the provisions of said deed of trust to her from said Charles B. Lewis aforesaid. The evidence in the cause shows that Henry B. Lewis, being insolvent, furnished his brother, Charles, the money with which to purchase said real estate, with the understanding that he would take the title in his own name, and hold it secretly in trust for the said Henry B. Lewis, which he accordingly did; and afterwards, at the instance of said Henry B. Lewis, he conveyed it to his wife, Sally G. Lewis, in trust as aforesaid, for the nominal consideration of $1 and love and affection.

The evidence, also, shows that Chas. B. Lewis, in the purchase of said property, advanced $600.00 of his own money, besides the amount furnished by his brother Henry B. Lewis, as aforesaid, and that, at the time of executing said conveyance to Sally G. Lewis, he refused to deliver the same, unless he was made secure in the amount so advanced. That to secure him, Henry B. Lewis gave him the promissory note of Cottingham & Vaughn for $600.00, whereupon the deed was delivered. That when the Cottingham & Vaughn note became due, Henry B. Lewis and Sally G. Lewis borrowed the money of Smith to pay it, and when the Smith debt fell due, they borrowed money of Edwards to pay it, and when the Edwards debt matured, for the purpose of discharging it, they then borrowed of Tracy the $700.00 for which they gave their promissory note and deed of trust here sought to be declared void, as aforesaid, and with it paid off the debt to Edwards. It further appears that at the time of executing said note and deed of trust they gave Edwards and Tracy a full history of the debt and the title of Sally G. Lewis. The cause was submitted to the court for trial, under the pleadings and evidence, and the court, after hearing and considering the same, found the issues for the defendants and dismissed the plaintiffs' bill, and this is assigned for error by the plaintiffs, who bring the cause here by writ of error.

The question to be decided upon this state of facts is whether the deed from Chas. B. Lewis to Sally G. Lewis under our statute of fraudulent conveyances, sections 2497 and 2498, revision of 1879, and the adjudications thereunder, is to be treated and held as fraudulent and void as against the trustee and beneficiary in the deed of trust from Sally G. Lewis and her husband, Henry B. Lewis. It is conceded, we believe, that our statute is a substantial re-enactment of the English statutes of 13 Eliz., c. 5, and 27 Eliz., c. 4, against fraudulent gifts and conveyances, with some modifications that embody the English construction of these statutes. Our statute, with its modifications, is substantially that of the state of New York, from which it seems to have been taken. According to established rule of construction in such cases, our legislature will be deemed to have enacted the above statute in the sense in which the statute had been construed by the courts of the country from which it was taken. Cathcart v. Robinson, 5 Peters 280; Story's Eq. Juris., sec. 429; Kent Com., pp. 463, 464. The English statute of 13th Eliz., c. 5, has reference to creditors, while 27th Eliz., c. 4, relates only to purchasers of land. With us, however, they are embodied in the same statute above referred to. The nature, effect and construction of these statutes have been fully considered and discussed by the following (among others) text writers and adjudicated cases, to-wit: 4 Kent Com., p. 463; 1 Smith's Leading Cases, part 1, page 48; 1 Leading Cases in Equity, part 1, page 415; 2 Greenleaf's Cruise on Real Property, pp. 519, 521, 524, 525; 1 Story's Eq. Jur., secs. 426, 432; 4 Vt. 389; 6 Vt. 411; 16 Vt. 209; 3 Bush 343; 4 Cowen 603; 14 Mass. 139; 5 Peters 280; 1 Md. Ch. 507; 2 Gray 447; 3 Wash. on Real Prop., p. 337.

The result of the foregoing authorities may, we think, be fairly stated thus: In England, it is settled that a voluntary conveyance, though for a meritorious purpose, will be deemed to have been made with fraudulent views, set aside in favor of a subsequent purchaser for a valuable consideration, even though he had notice of the prior deed. In the United States, while a number of the highest authorities adhere to the English rule, the better American doctrine and weight of authority seems now to be that voluntary conveyances of land, bona fide made, and not originally fraudulent, are valid against subsequent purchasers. In both England and...