143 Mo. 253 | Mo. | 1898
This is a suit by an attaching creditor under section 571, Revised. Statutes 1889, upon two different judgments in suits begun by attachment to set aside certain deeds for fraud, affecting lots one, two and three in block sixty-one in the city of Macon, Missouri. The suit was begun in the circuit court of Macon county, Missouri, from which the venue was subsequently changed to the circuit court of Audrain county. The petition, leaving off the formal parts, is as follows:
“Now at this day comes the said plaintiff by its attorneys and for cause of action against said defendants states that the said plaintiff is a corporation duly organized and existing under the laws of the State of Missouri for business purposes. That at the April term, 1894, of the said circuit court of Macon county, the plaintiff obtained a judgment against the defendant, George L. Jones, and one David M. Jones, for the sum of $470.60, in a suit by attachment against the said George L. Jones and David M. Jones, which said judgment bears interest at the rate of six per cent per annum from the date thereof, together with the costs
“Plaintiff further states that the defendants, George L. Jones and Sarah M. Jones, are seeking and proceeding to sell the said real estate under the said two deeds of trust, and have procured notices to be published in the 1Macon Times,’ a newspaper published in the city of Macon, that the said real estate will be sold on Friday, the 31st day of August, 1894, one of the said notices being signed by the said James W. White, sheriff of Macon county, Missouri, and the other by the said William P. Beach, trustee, the said Sarah M. Jones falsely pretending that she is the holder and owner of the note executed and secured to the said W. T. Moody, and falsely pretending that the said Allen W. Gilstrap refuses to execute the .said trust. That neither of the said deeds of trust appear satisfied of record, and unless the defendants be enjoined and restrained by an order of this court, they will proceed to sell and will sell the said real estate under the said two deeds of trust, pursuant to the advertisement aforesaid. That if the defendant, Sarah M. Jones, who is the mother of the said George L. Jones, furnished the money to pay off the said Moody
Defendant, Sarah M. Jones, answered as follows: “Defendant, Sarah M. Jones, says that it is true that George L. Jones, her son, was at the date of the filing of plaintiff’s petition the owner of lots 1, 2 and 3 in block 61, in the city of Macon, county of Macon, and State of Missouri, and she says that she sold and conveyed to him the same on the 19th day of January, 1893, and that the purchase price thereof was the sum of $5,000; that at the day of said sale and thereafter there were located on said lots, first, a blacksmith shop; second, a business house; and third, a dwelling house. And that the said dwelling house was at all dates thereafter occupied by the said George L. Jones as a
“This said $2,500 note was made due eighteen months after its original date, January 19th, 1893, and was entitled to certain credits, the exact amount of which was not then known by George L. Jones, but which was to be credited on said note upon delivery to said Sarah M. Jones, which was done. The said deed of trust given to secure the $1,000 note borrowed from A. W. Gilstrap and made payable to W. T. Moody, named the said A. W. Gilstrap therein as trustee and in the event of his refusal to act, the sheriff of Macon county, and the same contained power of sale in favor of said trustee in the event said note was not paid when due. The defendant further says that at the time she accepted the $2,500 note in May, 1893, she credited the same with all the amounts that had been paid her thereon and it left owing her at that time the sum ‘of $1,480.45 with interest from January 19th, 1893; that afterward, in September, 1893, the said George L. Jones, again paid her $128 in stock which she also credited on the same note, which left owing her the sum of $1,352.45 with interest on it, as afore
“Wherefore, the said defendant, Sarah M. Jones, says she is now the owner of said lands and that she was at all times the owner in good faith of the indebtedness aforesaid, against her said son, George L. Jones, and held the interest on said land above set forth, and that she purchased the note from said'A. W. Gilstrap aforesaid, in good faith and in May, 1894, paid him, the said Gilstrap, the sum of $1,112.25. That thereupon the said Gilstrap delivered to her the said
Defendants Gilstrap and White were mere nominal parties and filed no answer. The answer of George L. Jones was a general denial. Defendant Beach answered admitting that he was trustee in the deed of trust of September 30, 1893, and alleging that he had no knowledge or information sufficient to form a belief as to other matters charged in the petition.
Plaintiff made reply to the amended answer of Sarah M. Jones, as follows. “Now this day comes the said plaintiff by its attorneys and for reply to the separate and amended answer of the defendant, Sarah M. Jones, denies each and every allegation therein contained except in so far as the same admits the allegations contained in the plaintiff’s petition. And the plaintiff further replying to the said answer of the said SarahM. Jones, states that it is not true as alleged by her, that she purchased the note of a thousand dollars in favor of W. T.. Moody and secured by deed of trust on the real estate in question, from the said A. W. Gilstrap; denies that the said A. W. Gilstrap was the holder and owner of the said note; and denies that the said Gil-strap had any authority or power to sell or transfer said note to her; and denies that he, in fact, sold and transferred the same to her, but, on the contrary, that the said A. W. Gilstrap refused to assign or sell the same, and that upon the said Sarah M. Jones and the said George L. Jones paid off the said note; and that the said payment and pretended purchase of the said note was in furtherance of the fraudulent intent and purpose and design of the said Sarah M. and George L. Jones, to defraud, cheat, hinder and delay the creditors of the said George L. Jones, and prevent the said property from being subjected to the claims and judgm ents of this plaintiff. And further replying to
“Further replying to the said amended answer, plaintiff states that the property in question was of large value and admitted by the defendants to be worth the sum of five thousand dollars and that the said Sarah M. Jones purchased the said property at the said sales made by said Reach and the said J. W. White for the nominal consideration of three hundred and fifty dollars, which was a great and ruinous sacrifice thereof; that the consideration so paid by said Sarah M. Joues was so small and inadequate and at such a sacrifice that the same is unconscionably inadequate and ought not to be permitted to stand. That the said Sarah M. Jones so purchased said property long after the attachment suits of the plaintiff had been levied upon said property and sustained by the circuit court of Macon county, and long after the judgments in favor of plaintiff had been rendered, and said attachments sustained, and long after a notice of this suit had been duly filed in the recorder’s office of the county of Macon, where this suit was originally instituted, and plaintiff avers that said Sarah M. Jones purchased said property with the full knowledge of all the facts and circumstances of the plaintiff’s lien, claim and judgment upon the said property, and the notice of the
The trial was by the court and resulted in a judgment in favor of defendants, dismissing plaintiff’s peti
This litigation comes of the following state of facts:
On the thirteenth day of October, 1893, plaintiff began two suits in the circuit court of Macon county by attachment, one against George L. Jones and Thomas M. Jones, the other against George L. Jones and David M. Jones. And the lots in question were attached under writs issued in said causes. At the April term, 1894, trial was had upon plea in abatement filed by the defendants in the suit against George L. Jones and Thomas M. Jones which resulted in favor of plaintiff. No plea in abatement was filed in the other case; but in both cases there was personal service on the defendants, and general judgments were rendered against them. In the first named case the judgment was for $2,248.74, and in the other case for $470.60. No execution was ever issued upon these judgments, nor is it alleged in the petition in this cause that any of the defendants are insolvent.
Prior to 1892 the property in question upon' which there was a dwelling house, blacksmithing shop' and warehouse, repair shop and pair of scales, was owned by Sarah M. Jones, and her husband William Jones carried on there in his own name the implement business. William Jones had become indebted to larger dealers in about the sum of $1,000. In February, 1892, ■ Thomas M. Jones purchased out the interest of William Jones in the business for $300 but not assuming his debts. At the same time Thomas M. Jones formed a partnership with George L. Jones in the business at the same place under the firm name of Jones & Jones. In September, 1892, that firm was dissolved, Thomas M. Jones selling out his interest in the firm to David M. Jones for the sum of $400, the name of the firm
On the twenty-first day of January, 1893, the defendant, George L. Jones, with his wife, executed a deed of trust to Robert G. Mitchell, trustee, for Sarah M. Jones, upon the same property to secure the balance of the purchase money on the same expressed in two notes, one for the sum of $1,000 and the other for the sum of $2,500, amounting to the sum of $3,500, both of said notes falling due and payable on the fifteenth day of May, 1893, and bearing interest at the rate of six per cent per annum from maturity. The last mentioned deed of trust seems not to have been recorded. On the eighth day of May, 1893, George L. Jonesborrowed $1,000 from William T. Moody, through A. W. Gilstrap, for which sum he executed his promissory note due ninety days after date and to secure the same George L. Jones with his wife, on the same day, executed to A. W. Gilstrap, as trustee, a deed of trust on the property in question which was at the time duly recorded. Four or five days thereafter, George L. Jones borrowed the further sum of $300 from A. W Gilstrap for which he gave his note with personal security. The last mentioned sums of $1,000 and $300 obtained from Gilstrap and Moody seem to have been paid to Sarah M. Jones on her sale of said premises to her son, George.
From July to September, 1893, the plaintiff had
It is shown by the evidence that George L. Jones had charge of the shop and implement store and transacted all the business and made all' the purchases of goods that came into the firm, both when Tom and David Jones were with him. During the transactions between George L. Jones and this plaintiff, the Mansur & Tebbetts Implement Company, he made two property statements. The first .is dated November 15, 1891.
This statement shows that all the goods purchased from plaintiff had been disposed of except $500 worth on the thirteenth of October, 1893, and they were
A large part of the testimony introduced at the trial was upon the question of the payments George had made to his mother on the property prior to the thirtieth day of September, 1893', when the $2,500 deed of trust was executed. In his testimony at Macon, read in evidence as a part of his cross-examination, the defendant, George L. Jones, testified that on the thirtieth day of September, 1893, when the $2,500 deed of trust was executed, the balance due from him to his mother on the property was $1,000 or $1,200. In his calculation he estimated the property •at $5,000, and did not include in his payments the amounts paid to the Williams Wagon Company, the Morrison Plow Company and Moon Brothers, on the old debts of his father, amounting to about $800. The defendant, Sarah M. Jones, testified that the balance due her from George on the thirtieth day of September, 1893, when she took the $2,500 mortgage, was about $1,300. She agreed and contracted with her son, George, that whatever debts he paid for her husband should be credited as payment on the price of the lots. She so represented ■ to Mr. Cunningham, Mr. Cady, David M. Jones, Thomas M.. Jones, and to •others; and Dave Jones heard the contract and arrangement between George and his mother. George Jones frequently admitted that his mother had been paid off, or nearly so, “and may be a little over.” On
I. Defendants contend that the petition states no cause of action, in that it does not allege the insolvency of either of the judgment debtors, that any effort was. made to collect the judgments by execution, or that the plaintiff has no remedy at law.
It may be conceded that “one seeking aid in a court of equity must, as a general rule, first exhaust his remedies at law.” Merry v. Fremon, 44 Mo. 518; Alnutt v. Leper, 48 Mo. 319; Martin v. Michael, 23 Mo. 50; Crim v. Walker, 79 Mo. 335; Thias v. Siener, 103 Mo. 314; Mullen v. Hewitt, 103 Mo. 639; Mellier v. Bartlett, 106 Mo. 381. Under this well established rule the petition in the case in hand states no cause of action, for it does not show that plaintiff had exhausted its remedies at law, and unless section 571, Revised Statutes 1889, furnishes an exception to the general rule the petition must be held to be insufficient. That section provides that, “Any attaching creditor may maintain an action for the purpose of setting aside any fraudulent conveyance, assignment, charge, lien or incumbrance of or upon any property attached in any action instituted by him; and where several attachments in favor of different plaintiffs are levied on the same property, all or any number of such plaintiffs may join in the same action for that purpose.” This statute authorizes an attaching creditor to proceed for the purpose of setting aside any fraudulent conveyance, charge, lien or incumbrance of or upon any property attached by him, without more, and removes the case from the general rule in such cases. By reason of the levy of the attachment, plaintiff acquired a lien upon the property attached, which by express provision authorized it to maintain an action to set aside any
The petition charges that the deed of trust upon the property executed by the defendant George L. J ones and his wife Maggie, on the thirtieth day of September, 1893, to William P. Beach, as trustee to secure ,the payment of a note purporting to be for the sum of '$2,500, given by the defendant George L. Jones to his mother and co-defendant Sarah M. Jones, dated January 19, 1893, due eight months after its date, was without any consideration, or else the same was given for a sum largely in-excess of any amount due from George L. to his mother, for the purpose of defrauding, hindering and delaying the creditors of the said George L. and was accepted by the said Sarah' M. Jones with full knowledge of the intention of said George L., and that she was a party to the fraud, and stated a good cause of action under the statute. Boland v. Boss, 120 Mo. 208.
II. It is insisted by plaintiff that if the deed of trust from George L. Jones to his mother Sarah M. Jones, of September 30; 1893, was fraudulent and void as to creditors for any reason, then the plaintiff ought to prevail in this suit. That under such circumstances the payment, or purchase of the prior Gilstrap note and mortgage by her, will not avail her, because she had no interest to protect. Upon the other hand it is contended by defendants that by purchase or payment of the Gilstrap note Mrs. Jones became subrogated to all the rights of the original holder thereof. Gilstrap, the trustee in the deed of trust given by George L. Jones on the lots to secure the payment of the $1,000 borrowed from Moody, testified that it was Moody’s money; that the note was not paid when due, and that he
This receipt was signed by G-ilstrap as trustee. It does not purport to be a sale or assignment of the note. In fact the evidence of G-ilstrap shows that it was not, and that the note was simply surrendered to Judge Hess, the attorney for Mrs. Jones, ■upon its payment by him for her. It is equally as •clear that Mrs. Jones did not pay off the note at the •request of George L., the mortgagor. In fact, there is no such averment in her answer, but it is therein alleged that she'purchased the note from Gilstrap, in good faith, and paid him therefor the sum of $1,112.25. Therefore, unless Mrs. Jones paid the note to protect some interest of her own at the time, she was not •entitled to be subrogated to the rights of the mortgagee.
In Norton v. Highleyman, 88 Mo. 621, it is said: “Before a third party, making payment of a debt secured by mortgage-, can be subrogated to the rights
While there was some conflict in the evidence as to the price agreed to be paid by G-eorge L. Jones to his mother for the lots, the weight of the evidence we think showed that it was $4,500. It is, however, clear, that on that day he owed Mrs. Jones $3,500 balance on the purchase price of the property, and that he on 'the twenty-first day of January, 1893, executed to her his two promissory notes of that date, one for $2,500 and the other for $1,000 secured by deed of trust on the same property. This deed of trust was never recorded for the reason as stated by Mrs. Jones that a Mr. Cunningham was going to loan G-eorge $2,500, to be secured by mortgage on the property and would want his mortgage recorded first, and then she intended recording hers. That George paid $2,200 to the county for her in May, and then $300. That he afterward got $1,000 from G-ilstrap which he also paid to the county for her. That when he got that he took both notes and papers and destroyed them. Assuming then that $4,500
Mrs. Jones from George L. as stated in January, 1893.........$3,500.00
He paid Macon county for her in May, 1893................ 2,500.00
Balance due her at that time.................................$1,000.00 Paid her in stock and implements........................■... 385.00
This would leave a balance due her of.......................$ 615.00
Yet her son George thereafter on the thirtieth day of September, 1893, executed to her at her request, a deed of trust on the property to secure the payment of a note for $2,500, which upon its face bore date January 19, 1893, due eighteen months after its date, but which in fact was executed on the thirtieth day of September, 1893. This deed of trust was recorded in the recorder’s office of Macon county at ten o’clock a. m.
It was held in State ex rel. v. Hope, 102 Mo. 410, that where a part of an alleged indebtedness is fraudulent that it will taint the whole transaction and avoid the entire sale in favor of creditors. Boland v. Ross, supra; Barton v. Sitlington, 128 Mo. 164. In Kuykendall v. McDonald, 15 Mo. 420, it was said “the law will not suffer a creditor, although he may have a just demand against his debtor, to use that debt as a screen to protect the debtor’s estate from his other
When Cunningham saw Gleorge on the thirtieth of September, Gleorge then stated that he did not owe his mother anything and did not intimate to Cunningham that he had given her a deed of trust on the property. When Cunningham returned again about ten days thereafter he found the deed of trust of record. He testified as follows with respect to a conversation which he then had with Gleorge: “ ‘I see by the record this morning that you have given your mother a deed of trust on the property for $2,500 that day I was here, a week or ten days ago, when I was down to Tom’s,’ and
Our conclusion is that George L. Jones was not indebted to his mother Mrs. Sarah M. Jones in any sum whatever at the time of the execution of the last note and deed of trust and that even if he was in some amount, the taking of his note by Mrs. Jones for a much greater amount, which was antedated and secured by the deed of trust on the property, of date September 30, 1893, was under the circumstances fraudulent and void as to his creditors, and that she was a party thereto.
We therefore reverse the judgment and remand the cause with directions to the trial court to enter up a decree that the said first mentioned deed of trust of Allen W. Gilstrap, trustee, be adjudged to have been paid off and satisfied and that the same be released and satisfied of record; and that the second deed of trust, executed to-the said William P. Beach, trustee, be adjudged and declared to be fraudulent and void as to