Benne v. Schnecko

100 Mo. 250 | Mo. | 1889

Sherwood, J.

This is a proceeding in equity, to set aside, on the ground of fraud against creditors, two conveyances of about thirty-eight acres of land in St. Louis county, one of them dated in 1881, conveying the land in controversy to Keoeser, as trustee for Mary Schnecko, the wife of the grantor. This deed which expressed a consideration of twelve thousand dollars not only conveyed the land in suit, but also everything the grantor, Richard C. Schnecko, possessed in the world, as he testifies, in the way of personal property, horses, mules, cows, • hogs, wagons, plows, farming implements and machinery, fifty tons of hay and all the household and kitchen furniture in the house occupied by him, on the premises.

The testimony showed that the land thus conveyed was only worth five thousand to six thousand dollars; there was no dispute on this point. The property was also incumbered by a deed of trust, securing a debt of twenty-five hundred dollars.

In 1879, Schnecko became a principal in a note for seven hundred dollars to Jacob Bittner, with Herman and William Benne as sureties. Judgment by default was recovered on this note November 19, 1883, and on the same day, one Holthaus also recovered judgment against Schnecko, for $114.60, by “mutual consent,” with a stay of execution for sixty days. Matters were so managed, however, between Schnecko, the husband, his wife and their attorney, that Bittner’s judgment was tied up with a motion made by Schnecko, to set aside the judgment by default, which was filed on the twenty-third day of November, 1883, and not determined until December 27, of that year, but two days before the sale under the Holthaus judgment occurred.

By “mutual consent” also, the stay of execution on the Holthaus judgment was set aside, and on the same day, December 7, 1883, execution issued on that judgment, and the sale was made thereunder, on the twenty-ninth day of December, 1883, but two days after the motion to set aside the judgment by default, taken against Schnecko, and in favor of Bittner, had been overruled. At this sale Mrs. Schnecko became the purchaser of the land for one hundred and forty-five dollars, through her attorney who had advised this course. The deed made by the sheriff in consummation of this sale was also asked to be set aside as fraudulent.

It is in evidence, that when the motion to set aside the judgment by default, in favor of Bittner, and against Schnecko, came on to be heard, the court spoke about its insufficiency in that it failed to set up any meritorious defense, whereupon the attorney for the husband and wife remarked: “It might as well be overruled; it has accomplished its purpose.”

The claim is made on the part of the wife, Mrs. Schnecko, that she was a widow in 1865, in Kentucky; that her first husband left her three thousand dollars and a house and lot in Memphis, Tennessee, which sum her present husband borrowed, and after that, at his instance, she sold the house and lot for two thousand dollars, and loaned him the proceeds; this latter transaction was in the spring of 1865. No note .or memorandum was taken for these loans, nor does it appear that the wife had any separate estate.

In 1881, it was at her request, that the husband was induced to make her the conveyance mentioned, in order, as she says, to repay her for the money loaned some fifteen years before, and which was never before demanded, either principal or interest. Where this loan occurred does not appear; whether in Kentucky, Tennessee or Missouri. If in the last-named state, then the time specified being before the act of 1875 took effect (see R. S. 1879, sec. 3296), the status of the husband as towards the wife was as at common law, and he acquired, jure mariii, the title to alibi her personal property in possession. Woodford v. Stephens, 51 Mo. 443; Alexander v. Lydick, 80 Mo. 341; Modrell v. Riddle, 82 Mo. 31. So that, according to the showing made, the wife had no money to loan to her husband, because it belonged to him already. Nor would the case be altered for the better for Mrs. Schnecko, were the supposition indulged that the alleged loan occurred in either Kentucky or Tennessee, because, the statute law of those states as to married women not being established by the evidence, the presumption must be indulged that the common law prevailed, and that the husband became entitled accordingly. Meyer v. McCabe, 73 Mo. 236.

But apart from these considerations, there is no attempt made to account for, or to explain, the discrepancy between the actual value of the land, and the price mentioned in the deed. This false recital was a badge of fraud; and it was also another badge that the debtor transferred, by the deed made to his wife’s trustee, all of his property. Honest transfers do not commonly occur in this way. Indeed, anything out of the usual course of business is a sign of fraud. Bump. Fraud. Conveyances, pp. 34, 42, 51; Baldwin v. Whitcomb, 71 Mo. 651.

There is no doubt but what a husband may make a valid settlement upon his wife, for a valuable consideration. “Such settlements, however, are always watched with considerable jealousy, on account of the relative situation of the parties, and the convenient cover they afford to a debtor to protect his property and impose upon his creditors, and the payment of a valuable consideration must be made out by proof of the most unquestionable character.” Bump. Fraud. Conv. [3 Ed.] 306; Besson v. Eveland, 26 N. J. Eq. 468; Humes v. Scruggs, 94 U. S. 22.

But the sale under the Holthaus execution would undoubtedly have given Mrs. Schnecko a good title to the land, had it not been the fact that this sale was but in furtherance of, and tainted with, the original fraud already developed in the foregoing remarks. And the sureties having paid the debt of their principal, Schnecko, became entitled to an assignment of the judgment Bittner had recovered. Such payment did not extinguish the debt, at least in equity. Mere payment of the debt by the surety is considered to operate as an assignment of it to the party paying, with all the rights and liens which attached to it as incidents in the hands of the creditor. Bispham’s Prin. Eq., secs. 335, 336; Brandt on Suretyship, secs. 269, 270, 271; Furnold v. Bank, 44 Mo. 336; Berthold v. Berthold, 46 Mo. 557.

Nor is there any doubt that this proceeding was properly instituted in the name of William Benne, to whom the judgment was assigned for the benefit of himself and the other surety. But, if the suit were not properly brought, there was no objection taken either by demurrer or answer as to plaintiff’s capacity to sue, and so any such objection, even if existing, was waived.

It is proper to remark just here, that on numerous occasions we have said that in equity cases where the witnesses testify orally we will defer somewhat to the findings of the chancellor. Chouteau v. Allen, 70 Mo. 386; Erskine v. Loewenstein, 82 Mo. 309; Springer v. Kleinsorge, 83 Mo. 159; Berry v. Hartzell, 91 Mo. 138; Bushong v. Taylor, 82 Mo. 666; Mathias v. O Neil, 94 Mo. 530.

But by such remarks we are not to be understood as meaning that we are concluded by the finding of facts by the court below; far from it. Such remarks do not medn that we have abdicated our supervisory control over questions of fact in equity causes; they only mean that when there is conflict of testimony, or where the testimony is evenly balanced and the finding of the chancellor appears to be correct, then we will so far defer to his finding as to sanction it by our affirmance; “ that and nothing more.”

The cases above mentioned have no applicability to the case at bar. It is no case for nicely balancing probabilities as to whether or not the deeds in question were fraudulent, since the evidence establishes this beyond perad venture.

For the reasons given, we reverse the judgment and remand the cause with directions to enter a decree as prayed in the petition.

All concur, but Barclay, J., who dissents.