Webb v. Darby
| Decision Date | 19 March 1888 |
| Citation | 7 S.W. 577,94 Mo. 621 |
| Parties | Webb, Administrator, Appellant, v. Darby et al |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. T. A. Gill, Judge.
Affirmed.
A Comingo, G. W. Buchanan and Gates & Wallace for appellant.
(1) A conveyance made with intent to either hinder, delay, or defraud creditors, or a particular creditor, to one having notice of such intention, is void, irrespective of the solvency of the grantor or the value of the consideration. Nor is actual knowledge on the part of the grantee necessary. Knowledge of facts sufficient to put a prudent man on inquiry is sufficient. R. S., sec. 2497; Bump on Fraud. Con. [3 Ed.] 200-1; Burgert v. Borchert, 59 Mo. 83; Daugherty v. Cooper, 77 Mo. 529; Rupe v. Alkire, 77 Mo 642; Johnson v. Sullivan, 23 Mo. 474. (2) A voluntary conveyance made by one who is insolvent or in failing circumstances, or whose estate is disproportioned to the amount conveyed, is void as to existing creditors regardless of the intention of the parties to it. Hurley v. Taylor, 78 Mo. 238; Sloan v. Torry, 78 Mo. 623; White v. McPheeters, 75 Mo. 286; Potter v. McDowell, 31 Mo. 62. (3) A promise by the grantee to pay debts of the grantor which are secured on the property is not a valuable consideration unless he also agrees to protect the debtor and the rest of his property from them; or, if the value of property exceeds the amount of the incumbrances, a promise to pay off the incumbrances is not a valuable consideration, and the conveyance is voluntary. Bump on Fraud. Con. [3 Ed.] 228; United States v. Mentz, 2 Watts, 406; Carpenter v. Carpenter, 25 N.J.Eq. 194; Bank v. Beatschy, 52 Wis. 438. (4) Fraud is seldom capable of direct proof, but may be gathered from surrounding circumstances indicative of an intention to hinder, delay, or defraud creditors. Burgert v. Borchert, supra; Frederick v. Allgaier, 88 Mo. 598. (5) Insolvency or pecuniary embarrassment of the debtor furnishes a strong motive for a fraudulent transfer, and is a badge or mark of fraud. Bump on Fraud. Con. [3 Ed.] 36; Glenn v. Glenn, 17 Iowa 498; Sheppard v. Iveson, 12 Ala. 97; Merrill v. Locke, 41 N.H. 490; Sayer v. Fredericks, 25 N.J.Eq. 207; Forsyth v. Mathews, 14 Pa. St. 104. (6) A transfer by a debtor of all of his property which is subject to execution is a badge of fraud. Bump on Fraud. Con. [3 Ed.] 34; Twyne's case, 3 Coke, 80; Glenn v. Glenn, 17 Iowa 498; Vandall v. Vandall, 13 Iowa 247; Adams v. Sater, 19 Ind. 418; Searle v. Arnold, 7 R. I. 582; Wheelden v. Wilson, 44 Me. 20; Tub v. Williams, 7 Humph. 370. (7) If the conveyance is made pending or in expectation of a suit, it is a mark and sign of fraud. Bump on Fraud. Con. [3 Ed.] 37; Twyne's case, 3 Coke, 80; Hawthorne v. Eames, 31 Me. 93; Glenn v. Glenn, 17 Iowa 498; Adams v. Sater, 19 Ind. 418; Sayer v. Fredericks, 16 N.J.Eq. 207; Stewart v. Wilson, 42 Pa. St. 104; Merrill v. Locke, 41 N.H. 490. (8) Inadequacy of consideration raises a violent presumption of fraud. Bump on Fraud. Con. [3 Ed.] 44; Shelton v. Church, 38 Conn. 416; Rhoods v. Blatt, 84 Pa. St. 31; Davidson v. Little, 22 Pa. St. 252; Robinson v. Robards, 15 Mo. 319; Curd v. Lackland, 49 Mo. 451. (9) It is an object of suspicion and badge of fraud if the conveyance is from father to son, and especially when residing together. Berland v. Walker, 7 Ala. 274; Thompson v. Feagin, 60 Ga. 82; Hawkins v. Alston, 4 Ired. Eq. 146; Hawthorne v. Eames, 31 Me. 93; Glenn v. Glenn, 17 Iowa 498; Leavitt v. LaForce, 71 Mo. 354; Vandall v. Vandall, 13 Ia. 247; Searle v. Arnold, 7 R. I. 582; Bump on Fraud. Con. [3 Ed.] 56; Trefts v. King, 18 Pa. St. 157. (10) Omission to place the deed on record until after the judgment is a badge of fraud. Bump on Fraud. Con. [3 Ed.] 39; Goldsby v. Johnson, 82 Mo. 606; Hood v. Brown, 2 Ohio 269; Thompson v. Feagin, 60 Ga. 82; Coates v. Gerloch, 44 Pa. St. 46. (11) Failure to state the true character and consideration of the transaction in the deed is a mark of fraud. Bump on Fraud. Con. [3 Ed.] 41; McKinster v. Babcock, 26 N.Y. 382; Ingles v. Donalson, 2 Hayn. [N. C.] 57; Divver v. McLaughlin, 2 Wend. 600; Pickett v. Pipkin, 64 Ala. 525-6; Summers v. Howland, 2 Baxter, 412. (12) The irresponsibility and youth of the purchaser is a badge of fraud where the sale is on credit and no security is taken. Glenn v. Glenn, 17 Iowa 498; Chappell v. Clapp, 29 Iowa 194. (13) Where no change of possession follows the conveyance it is a badge of fraud. Bump on Fraud. Con. [3 Ed.] 49; Chappell v. Clapp, 29 Iowa 194; Merrill v. Locke, 41 N.H. 489; Gibson v. Hill, 23 Tex. 77.
John A. Sea and G. W. Staley for respondents.
(1) Fraud will never be imputed when the circumstances and facts of the transaction assailed as fraudulent, may, as a whole, with any reasonableness, consist with honesty and purity of intention. Courts act upon the principle that though the facts of the transaction might admit of a different construction, nevertheless where doubts are entertained as to the true construction to be given as to the conduct of the parties in the transaction assailed, these doubts should be resolved in favor of the defendant. Bump on Fraud. Con. [3 Ed.] 603; Dallam v. Renshaw, 26 Mo. 533; Rumbolds v. Parr, 51 Mo. 592; Page v. Dixon, 59 Mo. 43; Chapman v. McIlwrath, 77 Mo. 38; Forrester v. Scoville, 51 Mo. 268. (2) While the verdict of a jury, or the finding of a chancellor, on questions of fraud is not conclusive, nevertheless it will not be disturbed by the Supreme Court, on the ground of fraud shown, unless the facts are entirely irreconcilable with the hypothesis of honesty and good faith. The findings of the chancellor in such cases will be deferred to unless he has manifestly disregarded the evidence; and this, because the chancellor, having them before him, is the best judge of the credibility of the witnesses, and when the evidence is very conflicting, the Supreme Court will defer to the finding of the trial court and will affirm the judgment. Page v. Dixon, 59 Mo. 43; Snell v. Harrison, 83 Mo. 652; Erskine v. Lowenstein, 82 Mo. 301; Dryden v. Bank, 15 Mo.App. 580; Barbette v. City of Edina, 19 Mo.App. 550; Renney v. Williams, 89 Mo. 139. (3) Relationship between parties to a conveyance is not sufficient to establish a fraudulent intent as to creditors, nor is the insolvency of the grantor. Renney v. Williams, 89 Mo. 139. (4) The value of a thing is what it will bring and admits of no precise standard. It must be in its nature fluctuating, dependent in various circumstances. Hence to justify an inference of fraud, from inadequacy of price, the consideration must be so clearly below the market value, as to strike the understanding at once, with the conviction that such sale could never have been made in good faith. Bump on Fraud. Con. [3 Ed.] 45. (5) Courts take a practical view of all matters. The conveyance of the equity of redemption in premises so covered by incumbrances that the equity of redemption is valueless, will not, in the absence of actual fraud, be set aside at the suit of a creditor. Mittelburg v. Harrison, 11 Mo.App. 136, 142; S. C., 90 Mo. 444. (6) Where a party has a claim and allows another party to expend his money, or waits until the property has largely increased in value, either from these expenditures or other causes, courts of equity are very reluctant to interfere, though there be no bar of the statute. Moreman v. Talbot, 55 Mo. 392; Henshaw v. Bissell, 18 Wall. [U.S.] 255. And courts of equity will deny aid to those who have slept upon their rights for such a length of time, that it would be against good conscience and operate as a fraud to allow them to be asserted. Bradshaw v. Yates, 67 Mo. 221.
This is a proceeding instituted by plaintiff, Webb, as administrator of the estate of A. Philpot, deceased, to vacate and overrule, on the ground of fraud, a deed made by John Darby on the seven-teenth of February, 1882, conveying to Samuel Darby, among other lands, the following: The east half of the southeast quarter of section 8, township 48, range 29. The circuit court rendered judgment for the defendants, from which the plaintiff has appealed and claims that the judgment is against the evidence.
It appears from the record that A. Philpot was one of the sureties on John Darby's administration bond, and that, in a suit instituted thereon, in 1878, by Ruth Darby, she recovered judgment against plaintiff, Webb, as the administrator of said Philpot, for $ 4,675.10, which, as administrator, he paid; that said John Darby, in 1878, gave said Webb a deed of trust on certain real and personal property to secure him in the payment of said debt; that this deed of trust conveyed all of Darby's real estate except his homestead; that the property thus conveyed was thereafter sold, and after applying the proceeds of sale to the payment of said debt there remained a balance, for the recovery of which plaintiff instituted suit, on the seventh of May, 1880, against said Darby, and on the sixth of March, 1882, obtained judgment against him for $ 1,637.50, on which execution issued, on the twenty-fifth of August, 1883, and under which the eighty acres of land in controversy were sold, as the property of said John Darby, to plaintiff, on the twenty-ninth of September, 1883, for two hundred and forty dollars, and this suit was begun on the twentieth of February, 1884.
The evidence tends to show satisfactorily that, in 1878, John Darby, after executing the deed of trust conveying his real and personal estate to secure plaintiff from liability on the judgment rendered against him as administrator, furnished him with money to pay off a prior encumbrance on the land; that when plaintiff, in 1879, caused said property so...
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