Spindle v. Hyde
| Decision Date | 24 December 1912 |
| Parties | KATE SPINDLE v. LUCIUS D. HYDE and WALTER E. HYDE, Appellants |
| Court | Missouri Supreme Court |
Appeal from Chariton Circuit Court. -- Hon. John P. Butler, Judge.
Reversed and remanded.
J. A Collet and W. M. Williams for appellants.
(1) The decree is not founded upon the issues tendered by the petition and embraced within the pleadings. The suit is predicated upon the charge that the various conveyances by which Walter E. Hyde acquired the legal title were made to carry out a conspiracy to hinder, delay and defraud the creditors of his brother and co-defendant, Lucius D. Hyde and that the land was to be fraudulently held in secret trust for said Lucius D. Hyde, a party to said conspiracy. The decree is based upon the ground that Walter E. Hyde was an equitable mortgagee and his brother entitled to redeem the land, and that plaintiff succeeded to this right by her purchase at the sheriff's sale. A decree in equity must be founded upon facts embraced within the pleadings. Dallam v. Renshaw, 26 Mo. 543; Needles v Ford, 167 Mo. 495; Schnider v. Patton, 175 Mo. 684; St. Louis v. Contracting Co., 210 Mo. 491; Newton v. Kenton, 79 Mo. 382. (2) The land in controversy was conveyed to Walter E. Hyde, and he became the owner thereof, long prior to the marriage of the plaintiff to Lucius D. Hyde, and before any such marriage was contemplated or thought of, so far as is shown by this record. Not one of the existing creditors at the time of the conveyances is complaining and a subsequent creditor cannot succeed on the ground of fraud without showing that the transfers were made to hinder and delay future creditors. Krueger v. Vorhauer, 164 Mo. 156; Pane v. Stanton, 59 Mo. 158; Grocery Co. v. Smith, 74 Mo.App. 419; Loehr v. Murphy, 45 Mo.App. 519. (3) The decree was erroneous in declaring Walter E. Hyde an equitable mortgagee of the land, and in stating an account with him on that theory: (a) The petition did not allege any such relationship and made no charge in regard to the receipts and expenditures, and no issue was tendered upon that subject. Needles v. Ford, 167 Mo. 512. (b) The testimony concerning an agreement to permit a redemption of the land was in effect, that within two years after the first sale, which was under the Ehrhardt judgment, at the suggestion of the sister of the defendants, it was agreed that Lucius D. Hyde might redeem the land by paying all the expenditures, and a writing to that effect was signed. This was after the land had been sold under the Erhardt judgment. A mere promise to permit the owner of land, after it has been sold under a valid lien, to redeem, cannot be enforced in equity. Mansur v. Willard, 57 Mo. 347; Price's Heirs v. Evans, 26 Mo. 30. (c) The fact that the agreement was reduced to writing will not give it validity, if it was not founded upon a sufficient consideration. Taylor v. Von Schrader, 107 Mo. 206; Tucker v. Bartle, 86 Mo. 114. (d) Before such a contract can be enforced, its terms must be established by clear and satisfactory evidence, and not be based upon mere loose declarations or statements. Mansur v. Willard, 57 Mo. 347. (e) There was such laches as will prevent a redemption under the circumstances of this case. Ferguson v. Sodam, 111 Mo. 208.
H. J. West for respondent.
(1) The two conveyances made to Walter E. Hyde in February, 1895, were fraudulent and void as against creditors. The deeds were absolute in form, but intended only as security for $ 760 borrowed from the Farmer's Bank on their joint notes. The land was worth $ 2400. The fact that the deeds were intended only as security was kept secret between the parties; and the grantor continued to exercise much authority and many acts of ownership over the land. The following badges of fraud are all found in these transactions: False statement of consideration, inadequacy of consideration, retention of possession and continued exercise of control over the land by the grantor, and deeds absolute in form, but intended only as security, and this fact kept secret between the parties. Bump on Fraudulent Conveyances (4 Ed.), Secs. 45-67; 14 Ency. Law, 361 and 516-525; Farwell v. Meyer, 67 Mo.App. 566; Albert v. Van Frank, 87 Mo.App. 571; Gentry v. Field, 143 Mo. 399. (2) The purchase by Walter E. Hyde at the sale under the Ehrhardt execution was fraudulent and void as against creditors. This purchase follows closely upon the heels of the two conveyances in February, 1895, and was actuated by the same motives and bears the same marks of fraud. (3) The fact that this purchase was made at a public sale under a valid execution does not relieve it of its fraudulent character. Dallam v. Renshaw, 26 Mo. 533; Woodward v. Mastin, 106 Mo. 324; Miller v. Leeper, 120 Mo. 478. (4) Irrespective of the secret trust and the contract to reconvey, the conveyances complained of are fraudulent and void as against both existing and subsequent creditors. Sec. 2881, R.S. 1909; Pawecy v. Vogel, 42 Mo. 302; Payne v. Stanton, 59 Mo. 160; Bracken v. Milner, 99 Mo.App. 187; Cole v. Cole, 231 Mo. 236; R.S. 1909, Sec. 2881. A voluntary conveyance is not fraudulent per se as to subsequent creditors, but where there is actual fraud, as in the case at bar, the conveyance is void even as to subsequent creditors. Cole v. Cole, 131 Mo. 260; Bracken v. Miller, 99 Mo.App. 187. (5) The sheriff's deeds made under the Ehrhardt and the Wilding and Scrivenor judgments and executions were void because no homestead was set out to the execution defendant. Macke v. Byrd, 131 Mo. 682; Brewing Assn. v. Howard, 150 Mo. 445; Creech v. Childers, 156 Mo. 338; Smith v. Thompson, 169 Mo. 561; Kessner v. Phillips, 189 Mo. 515. (6) By means of the conveyances complained of in the petition the defendant, Walter E. Hyde, acquired title to the land in controversy to the use of his brother Lucius D. Hyde, and the interest of Lucius D. Hyde therein was subject to sale under execution. R.S. 1909, Secs. 2192 and 2880; McIlvaine v. Smith, 42 Mo. 45; Lackland v. Garesche, 56 Mo. 267; Lackland v. Smith, 5 Mo.App. 153; Bank v. Lime Co., 43 Mo.App. 561; Mfg. Co. v. Steel, 36 Mo.App. 496; Roberts v. Barnes, 127 Mo. 405; Bank v. Powers, 134 Mo. 432; Johnson v. Christie, 79 Mo.App. 46; Bump on Fraudulent Conveyances, secs. 191, 194, 298, and 592; 14 Ency. Law, 263. (7) The title acquired by Walter E. Hyde to the swamp land from the county and to the other land at the foreclosure of the deed of trust was acquired under a contract, whereby he agreed to advance certain money, and, when reimbursed out of the rents, profits and sales of the land, to reconvey the remainder of the land to Lucius D. Hyde. This constituted him a trustee for the use of Lucius D. Hyde, or an equitable mortgagee. Wilson v. Dumrite, 21 Mo. 325; O'Neill v. Capelle, 62 Mo. 202; Hargadine v. Henderson, 97 Mo. 375; Book v. Beasly, 138 Mo. 455. (8) The destruction of that contract by Bettie could not affect rights acquired under it. Neither could any change of mind on the part of Walter E. Hyde affect such rights. "Once a mortgage always a mortgage." Wilson v. Dumrite, 21 Mo. 325; Reilly v. Cullen, 159 Mo. 322. (9) The contract to reconvey was supported by ample consideration. The consideration is found in the relation of the parties. It is found in the fact that the titles were acquired by Walter E. Hyde at grossly inadequate prices. It is found in the fact that the swamp lands were paid for with the proceeds of other lands conveyed to other parties, the money of Lucius D. Hyde. It is found in the fact that the title acquired by Walter E. Hyde under the Ehrhardt execution sale was void because no homestead was set out to the execution defendant, and that the only legal title ever acquired by him to any of the land except the 160 conveyed to him in February, 1895, as security for a debt, was after this contract was made, and while it was in force and recognized as binding by all the parties. This contract was made by Walter E. Hyde to protect his brother. They thought it was sufficient to protect him then, and we agree with them. If it was sufficient then it is sufficient now. Its validity is not changed by the changed relations and interests of the parties, however much they may desire it. Neither do we understand that under the law of this State it is or ever was necessary that a writing declaring a trust should be supported by a consideration. Trusts are peculiarly free from conditions of this kind. Bispham's Equity (7 Ed.), Sec. 65. Measured by the standard here fixed, the written agreement executed by the defendants and given into the keeping of Bettie, meets all the requirements of the law, and fixed in Lucius an interest in the lands, which is now vested in the plaintiff. Lane v. Ewing, 31 Mo. 75; Leeper v. Taylor, 111 Mo. 324; Mullock v. Mullock, 156 Mo. 431; Leahey v. Witte, 123 Mo. 207; Richardson v. Champion, 143 Mo. 538.
Plaintiff, for three weeks the wife of Lucius D. Hyde and residing with him during that time in Chariton county, where he lived, then sued him in the Jackson Circuit Court for divorce. The relief she obtained in that suit was threefold, viz.: first, a judgment in January, 1903, for $ 5250 alimony; second, the restoration of her maiden name; and, third, the marital bonds binding her to Lucius were cut in twain.
Subsequently in February, 1904, having sued out execution and caused certain real estate in Chariton county to be levied on as his property, it was struck off to her under the hammer at sheriff's sale and she received a sheriff's deed. Presently, she brought this suit against him and his brother, Walter E. Hyde, the object and general nature of which was to set aside certain recorded conveyances purporting to transfer the land to...
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