Slattery v. Jones

• Decision Date: 04 June 1888
• Citation: 96 Mo. 216,8 S.W. 554
• Parties: SLATTERY v. JONES et al.
• Court: Missouri Supreme Court

8 S.W. 554

96 Mo. 216

SLATTERY v. JONES et al.

Supreme Court of Missouri.

June 4, 1888.

JUDGMENT — LIEN — PRIORITY — FRAUDULENT CONVEYANCES.

Under Rev. St. Mo. § 2497, declaring conveyances made with intent to defraud creditors clearly and utterly void as against such creditors; and section 2730, making judgments liens upon the judgment debtor's land from the day of rendition, — a judgment rendered after the judgment debtor has conveyed his land in fraud of his creditors is a lien on such land, superior to that of an attachment levied on the land after entry of the judgment, but before levy of execution.

Appeal from St. Louis circuit court; THAYER, Judge.

Leo Rassieur and Dexter Tiffany, for appellant.

Smith & Harrison and Martin, Laughlin & Kern, for respondent.

The attachment, as soon as levied, became a specific lien, with the same effect as if no conveyance had been made. McKinney v. Bank, 104 Ill. 180; Drake, Attachm. (6th Ed.) § 239; Lionberger v. Baker, 88 Mo. 447; Freem. Judgm. (3d Ed.) § 350; In re Estes, 3 Fed. Rep. 134. A judgment is not a lien on real estate which has, prior to the rendition of such judgment, been conveyed by the debtor in fraud of his creditors. Rappleye v. Bank, 93 Ill. 396; Miller v. Sherry, 2 Wall. 237, 249; In re Estes, supra, 5 Fed. Rep. 60; Howland v. Knox, 59 Iowa, 46, 49, 50, 12 N. W. Rep. 777; Lyon v. Robbins, 46 Ill. 279; Freem. Judgm. (3d Ed.) § 350; Bump, Fraud. Conv. (3d Ed.) 571, and note 4; Bank v. Burke, 4 Blackf. 141-145; Wood v. Wright, 4 Fed. Rep. 511; Parker v. Freeman, 2 Tenn. Ch. 612; Dargan v. Waring, 11 Ala. 988; Den v. Hill, 1 Hayw. (N. C.) 85-109; Henderson v. Hunton, 26 Grat. 926-938. Respondent, having first pursued the property, and obtained a specific lien thereon, is entitled to a preference. George v. Williamson, 26 Mo. 190; Jackman v. Robinson, 64 Mo. 289-292; Zoll v. Soper, 75 Mo. 460; Edmeston v. Lyde, 1 Paige, 639; Bridgman v. McKissick, 15 Iowa, 260; Burt v. Keyes, 1 Flip. 72; Gordon v. Lowell, 21 Me. 251; Corning v. White, 2 Paige, 567; Miers v. Turnpike Co., 13 Ohio, 197; Weed v. Pierce, 9 Cow. 722; Miller v. Sherry, supra; Rappleye v. Bank, supra; Bump, Fraud. Conv. (3d Ed.) 570, 571; Bruce v. Vogel, 38 Mo. 100.

SHERWOOD, J.

This is an equitable proceeding, having for its object the determination of the question whether the plaintiff, Slattery, or the defendant, the German Savings Institution, has the better title to the property in controversy. Briefly told, the facts in the case are these: "John Jones being insolvent and largely indebted, for the purpose of defrauding his creditors, conveyed his property to his wife's trustee in May, 1883. Shortly thereafter, the German Savings Institution, one of Jones' creditors, brought suit on a debt contracted antecedent to said transfer, and recovered judgment thereon January 8, 1884, on which judgment execution was duly issued February 4, 1884, and on that date placed in the hands of the sheriff, returnable to the April term. On this execution a levy was duly made on March 11, 1884, upon the property thus fraudulently conveyed, and the same was duly advertised and sold by the sheriff to the German Savings Institution, and a deed given and recorded April 19, 1884, and return made in due course to said April term. The German Savings Institution then brought suit with diligence, and had the conveyances of Jones declared fraudulent and void as to creditors. Subsequent to the obtaining of the judgment of January 8, 1884, in favor of said German Savings Institution, and on March 10, 1884, one day prior to the levy of execution thereunder, the plaintiff, Slattery, brought an attachment, and levied the same on the same property, filed notice of his attachment on that day, and followed it by judgment, execution, sale, and deed, recorded in June, 1884, and now claims that the subsequent levy of his attachment gave it a better lien upon the land than the German Savings Institution acquired by its prior judgment, followed in due course by execution and sale and deed. The court below held that a judgment is not a lien upon property fraudulently conveyed prior to its rendition; that such a transfer is not void, but only voidable as against creditors; that the levy of an attachment created a superior lien to the supposed lien of a judgment thus rendered; and decreed the title to be in the plaintiff.

Our statute declares that every conveyance of land made with intent to defraud creditors, etc., "shall be from henceforth deemed and taken, as against said creditors and purchasers, * * * to be clearly and utterly void." Rev. St. § 2497. Further statutory provisions bearing on the point in hand are as follows: "Sec. 2730. Judgments and decrees rendered by any court of record shall be a lien on the real estate of the person against whom they are rendered, situate in the county in which the court is held. Sec. 2731. Such liens shall commence on the day of rendition of the judgment, and shall continue for three years." "Sec. 2767. The term `real estate,' as used in this chapter, shall be construed to include all estate and interest in lands, tenements, and hereditaments liable to be sold upon execution." "Sec. 2361. No execution, prior to the levy thereof, shall be a lien on any * * * real estate to which the lien of the judgment * * * does not extend." "Sec. 2354. The following property shall be liable to be seized and sold upon attachment and execution issued from any court of record: * * * fifth, all real estate whereof the defendant, or any person for his use, was seized, in law or equity, at the time of the issue and levy of the attachment, or rendition of the judgment, * * * whereon execution was issued," etc. In his work on Executions, Mr. Freeman observes: "Whoever goes out with an execution to seek the fruits of his judgment is too apt to find that fraud has forestalled him. It then becomes his business to pursue these fruits wherever fraud has taken them; to wrest them from the possession of his adversary, wherever they may be found; and to prepare himself to show that the refuge whence he has wrested them is the refuge of fraud. In many instances the aid of equity is invoked. But, generally, this is unnecessary; for a transfer made to hinder, delay, or defraud creditors, while, as between the parties, it conveys the title, has, as against a creditor proceeding under execution, no such effect. As against the fraudulent transference, the creditor may seize the property, whether real or personal, as that of the fraudulent vendor, and may proceed to sell it under execution. The title transferred by such sale is not a mere equity, not the right to control the legal title, and have the fraudulent transfer vacated by some appropriate proceeding; it is the legal title itself, against which the fraudulent transfer is no transfer at all." Freem. Ex'ns, § 136. And though the learned author states that if land be bought with the money of the debtor, and the title taken in the name of another, that in such case the title cannot be reached by execution, but resort must be had to a court of equity, yet he admits that the rule is different in those states where statutes have been enacted which enable creditors to reach the legal title at law. Id.; citing, among others, the cases of Dunnica v. Coy, 24 Mo. 167; Rankin v. Harper, 23 Mo. 579; Eddy v. Baldwin, Id. 588, — where that doctrine is announced as the law of this state. In Rankin v. Harper, supra, LEONARD J., said: "Our law subjects all that a man has as property to the payment of his debts; and we know of no reason why the trust that results to him who pays the purchase money * * * should not be allowed to result to the debtor for the benefit of his creditors, so as to afford them the speedy and easy remedy of an execution sale." In Bobb v. Woodward, 50 Mo. 101, it is declared that it has become settled law in Missouri that upon lands held by a third person in fraud of creditors for the benefit of the debtor, or fraudulently purchased with money of the debtor, and conveyed to his family, there is a resulting trust arising to the debtor for the benefit of the creditors, which may be sold upon execution. It is held to be such an equitable estate as is comprehended in the language of the statute which subjects to sale upon execution "all real estate whereof the defendant, or any person for his use, was seized in law or in equity." To this effect are all the authorities in this state. An author of recognized authority says: "If the creditors obtain judgments against the debtor after the transfer, they acquire liens upon his property, wherever the same are given by law, according to the dates of their respective judgments, in the same manner precisely as if no transfer had been made; for the transfer is a nullity as against them, and the legal as well as the equitable title remains in the debtor for the purpose of satisfying debts." Bump, Fraud. Conv. (3d Ed.) 474. This position is abundantly sustained by the authorities. Jacoby's Appeal, 67 Pa. St. 434; Manhattan Co. v. Evertson, 6 Paige, 457; Mulford v. Peterson, 35 N. J. Law, 127, and cases cited; Eastman v. Schetler, 13 Wis. 324; Thomas v. Walker, 6 Humph. 93; Thomason v. Neeley, 50 Miss. 313; Scouton v. Bender, 3 How. Pr. 185; McKee v. Gilchrist, 3 Watts, 230. I find no case in this court where the point has been directly decided in accordance with the cases just cited; but such a decision necessarily results from our statutes and adjudications already quoted. If, as against creditors, the fraudulent...