Weir v. Baker

• Decision Date: 08 March 1948
• Docket Number: 40339
• Citation: 209 S.W.2d 253,357 Mo. 507
• Parties: Royal A. Weir v. Elizabeth A. Baker, Mary Elizabeth Baker (Also Known as Mary E. Baker), Charles J. Baker, Appellants, Ralph H. Roehrs, Richard C. Spackler, Trustee, and George R. Hunsche, Trustee, Defendants
• Court: Missouri Supreme Court

209 S.W.2d 253

357 Mo. 507

Royal A. Weir v. Elizabeth A. Baker, Mary Elizabeth Baker (Also Known as Mary E. Baker), Charles J. Baker, Appellants, Ralph H. Roehrs, Richard C. Spackler, Trustee, and George R. Hunsche, Trustee, Defendants

No. 40339

Supreme Court of Missouri

March 8, 1948

Appeal from Circuit Court of City of St. Louis; Hon. Edward M Ruddy, Judge.

Affirmed.

D Calhoun Jones, Philip S. Alexander and Jones & Alexander for appellants.

(1) Plaintiff has burden of proving a conveyance is fraudulent as to creditors, and of making out his case by clear and convincing evidence. Farmers & Merchants Bank of Festus v. Funk, 338 Mo. 508, 92 S.W.2d 587; Talley v Richart, 353 Mo. 912, 185 S.W.2d 23; Weigel v. Wood, 194 S.W.2d 40; Hale v. Hummel, 64 F.2d 211. (2) Although conveyances between parent and child where the rights of creditors are involved should be closely scrutinized, the existence of the relationship does not of itself establish fraud in the transfer. Weigel v. Wood, supra; Moberly v. Watson, 340 Mo. 820, 102 S.W.2d 886; Talley v. Richart, supra. (3) A debtor in disposing of property cannot commit a fraud on his creditors unless the creditors had a legal right to look to such property for satisfaction of his claim. Maender v. Breck, 159 S.W.2d 310; Butte Inv. Co. v. Bell, 201 S.W. 880. (4) Courts of equity have long distinguished between legal title, and equitable title. Equity will at the suit of persons holding the complete equitable title to land, restrain as to their estate the levy of an execution issued on a judgment against the person holding the legal title. Parks v. Peoples Bank, 11 S.W. 41, 97 Mo. 130; South Presbyterian Church v. Hinze, 72 Mo. 363; Neeley v. Bank of Independence, 89 S.W. 907, 114 Mo.App. 467. (5) A conveyance of real estate from the record owner to the real and equitable owner, even though done with the intent of hindering the creditors of the record owner, cannot be a fraudulent conveyance. Butte Inv. Co. v. Bell, supra; Neeley v. Bank of Independence, 89 S.W. 907, 114 Mo.App. 467; C. Aultman & Co. v. Booth, 95 Mo. 383, 8 S.W. 742. (6) While courts scrutinize transactions wherein it is charged husband is covering property in wife's name, they have not yet put up an embargo upon the wives of unfortunate debtors preventing them from securing homes for themselves and their families. Gruner v. Scholz, 154 Mo. 145, 55 S.W. 441. (7) An equity case, on appeal, is considered de novo by the appellate court, which may weigh the evidence for itself, make its own findings, and determine what decree should be entered. Peikert v. Repple, 342 Mo. 274, 114 S.W.2d 997; May Stores v. Union Electric, 107 S.W.2d 41; Shaw v. Butler, 78 S.W.2d 420.

C. Robert Tester, Joseph J. Howard and Blayney, Barrett, Cook, & Fairfield for respondent.

(1) The chancellor's findings in an equity case will not be disturbed unless clearly erroneous. Conrad v. Diehl, 344 Mo. 811, 129 S.W.2d 870. (2) As against existing creditors, a voluntary transfer of property by a debtor which renders him insolvent is fraudulent per se and proof thereof places the burden upon the grantee to show that the transfer was bona fide and without fraud. Godchaux Sugars, Inc., v. Quinn, 95 S.W.2d 82; Oetting v. Green, 350 Mo. 457, 166 S.W.2d 548; McDonald v. Rumer, 8 S.W.2d 592. (3) Defendants' evidence reveals that they have not borne the burden of proof that the transfer was bona fide and without fraud. 27 C.J. 398.

OPINION

Douglas, P.J.

Plaintiff obtained a judgment on a note against Charles and Mary E. Baker, father and daughter. Then plaintiff brought this suit against them and Baker's wife, Mrs. Elizabeth Baker, Mary's mother, to set aside a conveyance dated in 1943 by Mary to her mother of residence property in St. Louis.

Mrs. Baker claims she originally acquired the residence property in 1931 but had always carried it in the name of a straw party. On February 2, 1942 Baker and his daughter Mary executed a promissory note payable to plaintiff. On July 24, 1942 the property was conveyed by the straw party, in whose name it had stood since 1931, to Mary. The promissory note was not paid and suit against Baker and Mary was instituted to collect it on December 2, 1944. Service of process was obtained on Baker and Mary on January 13, 1945. On February 5, 1945 a deed was recorded by which Mary had conveyed the property to her mother. The deed was dated January 29, 1943, but the cancellations of the revenue stamps affixed to it were dated January 29, 1945. Plaintiff recovered judgment against Baker and Mary on March 29, 1945 for $ 8,211, and shortly thereafter filed this suit to set aside the deed from Mary to her mother. Plaintiff obtained a decree, and defendants have appealed.

It is undisputed that the deed from Mary to her mother was without consideration, and neither Mary nor her father has any other property with which to satisfy plaintiff's claim.

The rule is well settled in this state that a voluntary conveyance which renders the grantor insolvent and unable to pay creditors is presumptively fraudulent as to such creditors. Consequently the burden rests on the party accepting the conveyance to establish facts which will rebut the presumption that grantor's conveyance was made with fraudulent intent as to creditors. McCluer v. White, 338 Mo. 1017, 93 S.W.2d 696; Oetting v. Green, 350 Mo. 457, 166 S.W.2d 548.

To rebut such presumption of fraud Mrs. Baker attempted to prove her daughter Mary held only the legal title to the property and at all times the equitable title was in her. Of course if she established her equitable title to the property, the plaintiff, a creditor of the grantor daughter, would not be permitted to subject the property to his judgment. As a rule a creditor is not entitled to avoid a conveyance by his debtor of property to which the debtor has no such title as could be subjected to the payment of the claim. In the absence of elements of estoppel, and there is no estoppel here, a conveyance of property held in trust to the beneficial owner by a debtor is not fraudulent as to the debtor's creditors.

In order to establish her equitable title to the property Mrs Baker introduced a ...