Lindsley v. Caldwell

234 Mo. 498 | Mo. | 1911

FEREISS, J.

— This suit arises upon a bill in equity filed by plaintiff in the circuit court of the city of St. Louis against the defendant.

The petition charges that W. H. Stevenson, acting as agent for plaintiff, Mrs. Lindsley, entered into an agreement with defendant to the effect that defendant should receive in his own name the certificate of stock alleged to belong to plaintiff for sixty shares of stock in the Helmbacher Forge & Rolling Mill Co., and indorse same in blank and immediately transfer it to Stevenson as agent for plaintiff; that the certificate wa,s so issued to defendant, and that defendant refused to comply with the agreement so made; and the court is asked to decree that the said defendant holds said stock as trustee for plaintiff, also that plaintiff be enjoined from transferring said stock, and for other and further relief.

Defendant in his answer alleged that the plaintiff had no title, right or interest in such certificate; that she had unlawfully confederated with the said Stevenson, who was the real party in interest, to put herself forward in his place and stead as the owner of said stock; that said Stevenson was insolvent; that said Stevenson had owned certain shares of stock in the Bristol Realty Company, together with the participation contract of that company, and that, with intent to hinder, delay and defraud bis creditors, said Stevenson transferred said stock and contract to plaintiff, and that such transfer was made without the knowledge or co-operation of plaintiff, and that the hill of sale for same was not delivered to plaintiff until after this suit was instituted; that said shares of stock and contract were exchanged by Stevenson for other property, a part of which consisted of this sixty shares of stock of the Helmbacher Forge & Rolling Mill Company; that said stock was issued to plaintiff at the request of said Stevenson for the purpose on the part of Stevenson of hindering, delaying and defrauding Ms creditors, and that this claim of ownership by the plaintiff is made in pursuance of the fraudulent plan of said Stevenson to conceal and cover up the property so as to hinder, delay and defraud his creditors, and that the plaintiff and Stevenson unlawfully conspired for this purpose; that it was the purpose of Stevenson to cause the stock involved in this suit to be transferred to a holding corporation, the stock of which was to be issued to the defendant and by him indorsed in blank and delivered to Stevenson.

It will be perceived that the defendant does not allege any facts which would give him any interest or ownership in this stock. The case was tried before the court, and it developed in the evidence that the defendant asserted a claim against Stevenson for legal services rendered during, a period of four or five years, during which time he was the confidential attorney and adviser of Stevenson in the various financial transactions developed in the evidence, which transactions, defendant claimed, were had on, the part of Stevenson for the purpose of hindering, delaying and defrauding his creditors. The defendant does not claim any ownership in this stock, but admits that he was holding it to force Stevenson to settle his claim-for attorney’s fees. He claimed that Stevenson owed him $15,000, which claim Stevenson denied in toto. Defendant offered to return this stock to Stevenson if the latter would acknowledge in writing that he owed the defendant $15,000 for his services, which Stevenson refused to do.

The plaintiff introduced evidence which tended to prove that she was the owner of this stock; that Stevenson was her agent; that all of the transactions, so far as she was concerned, were bona fide; that defendant had no claim against Stevenson for fees, and that he had been paid for all of his services.

The pleadings were quite lengthy, and the transcript of the evidence presents a large record. It is unnecessary to go into the testimony in detail.

The court found the issues in favor of the plaintiff, and ordered, adjudged and decreed that defendant indorse to plaintiff and deliver to her or her counsel of record the certificate of stock described in the petition.

I. After a thorough consideration of the facts in evidence, we are of the opinion that the finding of the court in favor of the plaintiff is.fully justified by the record. The evidence for the plaintiff is clear and satisfactory that she was the owner of this stock; that she had permitted Stevenson to use her property in St. Louis, not for the purpose of hindering and delaying his creditors, hut as a loan to enable him to extricate himself from financial difficulty, and that he had so used the property; that this particular stock was placed in the name of the defendant who was acting as attorney for plaintiff’s agent, with the understanding and agreement that he was to indorse the certificate in blank and turn it over to plaintiff’s agent; that defendant, in violation of this agreement, refused to turn over the stock; that he asserted no legal or equitable ownership in same, hut held it for the avowed purpose of compelling Stevenson to give him a written acknowledgment that he, Stevenson, owed defendant $15,000' for legal services.

Tlie defendant did not itemize his claim for services. He testified that he had not and conld not render a hill. The evidence fails to establish that he had a claim against Stevenson to the amount of fifteen thousand dollars or any other amount; that is to say, he gave no testimony which, even if true, would afford a satisfactory basis for a judgment in his favor against Stevenson in any amount for services rendered as an attorney. He stated in effect that he had • represented Stevenson for four or five years, and that his services were worth $15,000. But it is unnecessary to decide whether defendant had a legal claim against Stevenson for services, because even if he had such claim he had no right to hold this stock for the sole purpose of forcing a settlement with Stevenson. It was placed in his name as the confidential adviser of Stevenson, under an express agreement that he would immediately indorse and deliver it to Stevenson. Such action on his part is to be condemned, if for no other reason than that it is violative of the confidential relation which existed between him and his client. This would be true-if the stock in point of fact belonged to Stevenson. It is certainly true when the stock in point of fact belonged to plaintiff; especially, where it may be fairly inferred that defendant, because of his knowledge of all of these transactions, knew that the stock belonged to the plaintiff.

II. The defendant, recognizing no doubt the weakness of his position so far as his attempt to hold this stock as security for his fees is concerned, defends upon the further ground that the transfer of this stock to him by Stevenson was made for the purpose of hindering and delaying the creditors of Stevenson; and he invokes the rule that where a conveyance is made for such purpose, and an attempt is made by the grantor to regain the property, equity, because of the corrupt purpose which prompted the conveyance, will leave the parties where it finds them. We are of the opinion, however, that this unhappy defense is not available to tbe defendant. The rule which he invokes does not apply to a case like this, where the grantee is the confidential attorney of the grantor, and receives the conveyance as such. The rule applicable to this case is clearly expressed in 3' Am. and Eng. Ency. Law, p. 338, and is as follows: “Even where the conveyance by the client to his attorney is for the declared purpose of hindering and delaying the creditors of the client, it cannot be sustained as against him by the attorney or his assignee with notice; the parties are not regarded as being in pari delicto., and equity will refuse to sustain such a conveyance.” The leading case cited to support the text is Ford v. Harrington, 16 N. Y. 285, which held that, although the object of the assignment was to perpetrate a fraud on the creditors, yet on account of the relations existing between attorney and client, the attorney must be compelled to restore what he had acquired under the assignment. Therefore, even if the defendant should succeed in establishing as a fact that Stevenson was the real owner of this stock, and that the purpose of the transfer of the stock to defendant was to hinder, delay and defraud the creditors of Stevenson, still the defendant would have no right to hold the stock as against Stevenson.

This case was very fully tried by the circuit court, and great latitude was allowed the defendant in the introduction of testimony and examination of witnesses. The findings of the court are fully sustained by the evidence, and its judgment and decree are affirmed.

Kennish, P. J., and Brown, J., concur.