Stam v. Smith
| Decision Date | 02 July 1904 |
| Parties | STAM, Executor, Appellant, v. SMITH et al |
| Court | Missouri Supreme Court |
Appeal from St. Francois Circuit Court. -- Hon. James D. Fox, Judge.
Affirmed.
George M. Wilson and Jerry B. Burks for appellant.
(1) Under the testimony plaintiff was entitled to decree setting aside the deed executed by Murphy to defendant, Lou M. Smith. According to her own testimony, if true, the transaction was a sale, not a case of a creditor honestly protecting herself to the extent of her claim. Smit v. Strauss Saddlery Co., 64 Mo.App. 120; Cooper v. Stanley, 40 Mo.App. 138; Frederick v. Allgaier, 88 Mo. 598; McVeagh v. Baxter, 82 Mo. 522; State to use v Mason, 112 Mo. 382; Snyder v. Free, 114 Mo 361; Garische v. MacDonald, 103 Mo. 11; Martin v. Estes, 132 Mo. 409; Ames v. Gilmore, 59 Mo 537. (a) The only proof, worthy of belief, of a consideration paid for the property, was the amount paid by defendants in satisfaction of the McCormick deed of trust, $ 326.10. This inadequacy of price for the property, over and above homestead exemptions, is of itself a badge of fraud. This, together with the relationship of the parties to the transaction, their statements, acts and conduct, clearly shows a transaction which actually bristles with fraud. Van Raalte v. Harrington, 101 Mo. 608; Blacker & Co. v. Ryan, 65 Mo.App. 239; Massey v. Young, 73 Mo. 260; Renny v. Williams, 89 Mo. 145; Bank of Versailles v. Guthrey, 127 Mo. 193. (b) That Zebulon Murphy intended to defraud plaintiff's testator, and that his daughter, the grantee in the deed, knew it, was abundantly shown by the declarations and admissions of Murphy and his daughter after the transaction. The statements made by Zebulon Murphy, while in possession of the land, to his brother Bart, and others, that the conveyance was to beat the Parkhurst debt, was competent not only against himself but against his grantee. State ex rel. v. Durant, 53 Mo.App. 500; Boyd v. Jones, 60 Mo. 454; Meredith v. Wilkinson, 31 Mo.App. 9; Bagnell v. Bank, 76 Mo.App. 126. (2) The court erred in permitting codefendant, Lou M. Smith, to testify as a witness, over the objection of plaintiff's counsel, she being a party to the contract in issue and on trial, the other original party to the contract, Zebulon Murphy, being dead. R. S. 1899, sec. 4652; Meier v. Thieman, 90 Mo. 444; Ashbrook v. Letcher, 41 Mo.App. 375; Teats v. Flanders, 118 Mo. 670; Chapman v. Dougherty, 87 Mo. 626; Gunn v. Thurston, 130 Mo. 344; Jones v. Burden, 56 Mo.App. 204; Bagnell v. Bank, 76 Mo.App. 125; Davis v. Ward, 161 Mo. 29; Baker v. Reed, 162 Mo. 355. Nor does the fact that Mrs. Zebulon Murphy was alive at the time of the trial alter or change the rule. Messmer v. McCray, 113 Mo. 389. (3) Codefendant, John Smith, being the husband of Lou M. Smith, was incompetent to testify, and the court erred in permitting him so to do. He was incompetent at common law and the statute does not qualify him. R. S. 1899, sec. 4656; Reno v. Kingsbury, 39 Mo.App. 244; Callahan v. Billat, 68 Mo.App. 435.
Rufus C. Tucker and B. H. Marbury for respondents.
(1) The transfer will be valid if it is made in good faith, although it includes all the debtor's property; and does not warrant the inference that the grantee is aware of the debtor's insolvency. Carson v. Murray, 15 Mo. 378; Stewart v. Dunham, 115 U.S. 61; Sibley v. Hood, 3 Mo. 290; Richardson v. Marqueze, 59 Miss. 80; 8 Am. and Eng. Ency. of Law, 768; Bump on Fraud. Conv. (2 Ed.), p. 35; Wait on Fraud. Conv. (2 Ed.), p. 324. (2) To justify the inference of fraud from the inadequacy of the purchase-price alone, the consideration must be so clearly below the market value as to strike the understanding at once with the conviction that such a sale never could have been made in good faith. Briant v. Jackson, 99 Mo. 598; Jones v. Geery, 153 Mo. 476; Farrell & Co. v. Meyer & Wolff, 67 Mo.App. 566; Robinson v. Dryden, 118 Mo. 540; Kincaid v. Irvine, 140 Mo. 615; Bump on Fraud. Conv. (2 Ed.), pp. 43, 189, 289 and 587; Wait on Fraud. Conv. (2 Ed.), p. 326. (3) Possession, after the sale of real estate, does not, per se, raise a presumption of fraud; it must be inconsistent with the sale, and repugnant to it in terms or operation, before it raises a just presumption of fraud. Robinson v. Dryden, 118 Mo. 540; Turner v. Hall, 60 Mo. 275; King v. Moon, 45 Mo. 551; Stewart v. Thomas, 35 Mo. 208; Bump on Fraud. Conv. (2 Ed.), p. 122; Wait on Fraud. Conv. (2 Ed.), p. 368. (4) To render a conveyance fraudulent as against creditors, there must have been mutuality of participation in the fraudulent intent, on the part of both the grantor and the grantee. Kincaid v. Irvine, 140 Mo. 615; Schawacker v. Leedington, 77 Mo.App. 415; Smith v. S. S. Co., 64 Mo.App. 120; Bank v. Russey, 74 Mo.App. 656; Sexton v. Anderson, 95 Mo. 373; Baker v. Harvey, 133 Mo. 653; Bump. on Fraud. Conv. (2 Ed.), p. 194; Wait on Fraud. Conv. (2 Ed.), p. 283. (5) A debtor, though in failing circumstances, may prefer one of his creditors over another, and in so doing he may secure such preferred creditors to the exclusion of all others, provided only that it be done bona fide. Kincaid v. Irvine, 140 Mo. 615; Drug Co. v. White, 165 Mo. 136; Milling Co. v. Burnda, 152 Mo. 350; Milling Co. v. Commission Co., 128 Mo. 488; Hart v. Leete, 104 Mo. 317; Hargadine v. Henderson, 97 Mo. 375; Shelby v. Booth, 73 Mo. 74; Bump on Fraud. Conv. (2 Ed.), p. 178; Wait on Fraud. Conv. (2 Ed.), p. 530. (6) The homestead not being subject to the right of creditors, its conveyance can not be fraudulent as to them. Rose v. Smith, 167 Mo. 81; Bartels v. Kinnenger, 144 Mo. 370; Macke v. Byrd, 131 Mo. 682; Grimes v. Portman, 99 Mo. 229; Thompson on Homesteads, pp. 352 to 394; Bump on Fraud. Conv. (2 Ed.), p. 242; Wait on Fraud. Conv. (2 Ed.), p. 71. (7) The spirit of section 4652 is not to close the mouth of the living party to a contract, where the other party is dead, under all conditions and in every circumstance, but to close his mouth where to permit him to speak would give him an advantage which he would not have were the other party living. Henry v. Buddecke, 81 Mo.App. 360; Bank v. Payne, 111 Mo. 291; Brim v. Fleming, 135 Mo. 597; Orr v. Rodes, 101 Mo. 387; Coughlin v. Haussler, 50 Mo. 126.
This is a suit in equity to set aside a deed from Zebulon Murphy to Mrs. Lucinda Smith on the ground that it was made to hinder, delay and defraud the creditors of said Murphy.
The plaintiff, as executor of Mr. Parkhurst, in the lifetime of said Zebulon Murphy, obtained a judgment on the thirteenth of November, 1896, in the circuit court of St. Francois county for $ 173.85; Zebulon Murphy died about January 1, 1897, and after his death the said judgment was exhibited and classed against his estate. It was alleged that said Zebulon Murphy at the time of his death was indebted to a considerable amount to J. B. Murphy, Dr. George W. Williams and John T. Burks.
On the fourteenth day of July, 1896, Zebulon Murphy and his wife, Amanda, conveyed their homestead, consisting of one hundred and eleven acres in St. Francois county and described as the north part of the southeast quarter of section 19, township 36, range 6 east, and two hundred acres, the northeast quarter and the northwest quarter of the southeast quarter of section 10, township 34, range 5 east, also in said county, to their daughter Lucinda M. Smith, for the recited consideration of $ 2,000, and the further consideration that Mrs. Smith should support her said parents during their natural lives. This deed was duly recorded July 16, 1896, and is the conveyance assailed by this suit for fraud. The answer denied all fraud; alleged that the consideration was truly stated and the money consideration paid and that the defendants have furnished Zebulon Murphy support until his death in January, 1897, and had been and were continuing to support Mrs. Murphy; that the one hundred and eleven acres was the homestead of Zebulon Murphy, acquired long prior to the incurring of any of the debts alleged to be owing by him at the time of his death and duly recorded in the office of the recorder of deeds and did not exceed the value of fifteen hundred dollars, and the same was exempt from attachment or execution. The replication denied the new matter alleged in the answer. The cause was heard and resulted in a finding for defendants and a dismissal of the bill. From that decree plaintiff appeals.
I. It is conceded that Zebulon Murphy and his wife had a homestead in the one hundred and eleven acres, but plaintiff insists that this tract exceeded $ 1,500 in value and that as to such excess the conveyance to Mrs. Smith was fraudulent. On this point the proof of the value was heard before the circuit court. The testimony was conflicting. There was no special finding made as to the value of the homestead. This was a question of fact. The witnesses were all before the trial judge and he was better able to weigh their testimony than we possibly can be, especially as to the value of land in that country, a matter upon which the judge of that circuit would naturally have a more correct judgment than this court, and it is a case in which this court will largely defer to the judgment of the chancellor on the circuit. As there was a general finding for the defendant, it may be presumed that the court found as a matter of fact that the homestead of one hundred and eleven acres did not exceed in value fifteen hundred dollars. As to the homestead, the creditors of Zebulon Murphy had no interest whatever. It could not be subjected to their debts, and they have no right to complain of...
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