Riggs v. Price

277 Mo. 333 | Mo. | 1919

WALKER, J.

This appeal seeks a review of a judgment rendered in the Circuit Court of DeKal'b County, in a suit brought by plaintiff, as trustee in bankruptcy of the estate of Thomas Price, to set aside as fraudulent deeds to certain land in said county, transferring the title to same to the defendant, the wife of Thomas Price. The trial court adjudged the deeds fraudulent and decreed that the title to the land was in the trustee, subject, to a homestead interest of $1500, a mortgage for $5500 of prior date to said deeds, and a mortgage for $1000 made by the defendant subsequent to the transfer of the land to her. Neither party being content with the findings of the trial court, both appealed; the defendant from the entire judgment, and the plaintiff from the finding as to the $1000 encumbrance. A single review will suffice to determine all of the matters at issue.

Pleadings. After the formal allegations, proper in a proceeding of this character, concerning which there is no controversy, the petition avers in substance the ownership by Thomas Price on October 8, 1913, of the land, describing it; that the same was encumbered by a mortgage theretofore given by him to secure a debt of $5500; that at the time of the making of the deeds, Thomas Price was indebted to various persons, firms and corporations in the sum of $44,647, and was insolvent, and had no property with which to pay his debts; that while so insolvent, he and his wife, Ivie Price, with the intent to hinder, delay and defraud his creditors then existing, made a general warranty deed whereby, for a fictitious purported consideration of $7500, they conveyed the land to one John Price, a brother; that the deed thereto was without consideration and was made and executed for the purpose of transferring the title of said land to grantor’s wife, Ivie Price; that on the day immediately after the execution of the deed to John Price, the latter quit-claimed and released the land to Ivie Price for a purported consideration of $10; that no consideration in fact passed; that John Price was a mere conduit for the purpose of transferring the title to the land from Thomas Price to his wife, Ivie Price; that each of said conveyances was made while Thomas Price was insolvent, for the purpose of defrauding his creditors, and that his insolvency and the purpose of said transfers were known at the time to each of said grantees; that Thomas Price has no property out of which his creditors can satisfy their debts, and has not had since October 8, 1913; that the trustee has no adequate remedy at law to subject said land to the payment of the debts of Thomas Price, nor for obtaining assets with which the claims of his creditors may be satisfied; that the land cannot be subjected to the payment of Thomas Price’s debts, and become available to the trustee in bankruptcy for that purpose, unless the conveyances aforesaid be annulled and set aside, and the land declared to be the property of Thomas Price, bankrupt; that at the time of said conveyances, the land was occupied by Thomas Price as a homestead and he resided thereon; that the value of same at the time, and at all times since has been, $12,500; that Thomas Price was entitled to a homestead therein of th¿ value of $1500; that the value of the land, exclusive of the mortgage for $5500 and the homestead interest in same, is $5000, which sum should be devoted to the payment of the claims of his creditors; that of the indebtedness of Thomas Price existing at the time of said transfers, there has been adjudicated claims in bankruptcy in the United States District Court against his estate in the sum of $14,622.97; that additional claims have since been presented for allowance; that the’ entire assets of said estate, exclusive of the land, amount to no more than $166'.

The prayer asks that the deeds to said land he canceled, and for naught held, and that Ivie Price take nothing thereby, except the value of the homestead, and that said property.be ordered .sold subject to the mortgage for $5500, and that the proceeds, after paying Ivie Price $1500 be paid to plaintiff, as trustee in bankruptcy for the benefit of the creditors of Thomas Price, and for such other orders, judgment and decree as are proper in the premises.

The answer admits the marriage relation; the. ownership of the land; that it is the homestead of Thomas Price; that deeds were'executed as stated, and the existence of the encumbrance. All other allegations are denied generally. After a hearing, the court took the case under advisement, and in October, 1915, rendered a judgment therein for plaintiff.

Judgment After formal findings as to the bankruptcy of Thomas Price, the trusteeship of plaintiff,, and his ^hority as such herein, the court finds that ” the defendant is the wife of Thomas Price; his ownership of the land, describing it, and the conveyances of same, and his insolvency at the time; that the transfer to John Price and his deed to Ivie Price were made without consideration and for the purpose of placing the title to said land in the defendant, Ivie Price, and were voluntary and void as to the creditors of Thomas Price, and as to 'his bankrupt estate, and as to the plaintiff, as trustee of same; that Thomas Price and his wife, Ivie Price, the defendant, occupied said land as a home, and that said Ivie Price is entitled to retain a homestead therein of the value of $1500; that the deeds made by Thomas Price to John Price and by John Price to Ivie Price be canceled and for naught held, except as to the homestead; and that the title to said real estate be vested in plaintiff as trustee in bankruptcy of the estate of Thomas Price, subject to the encumbrance of $5500, and one for $1000, and the homestead right of said Ivie Price.

It was developed by the testimony, but does not otherwise appear in the record, that the $1000 mortgage on the land was placed thereon by the defendant after the fraudulent conveyance of same to her.

The Facts The facts disclose that Thomas Price was adjudged a bankrupt on his voluntary petition in the United States District Court for the Western District of Missouri, March 19, 1914; that his indebtedness at the time the deeds to said land were made, and at the time of his adjudication as a bankrupt, was even greater than alleged in the petition; that his assets at said times were insufficient to satisfy same. In other respects, the facts are in substantial accord with the averments of the petition. The main issue at the trial was whether on the 8th day of October, 1913, the financial condition of Thomas Price was such as to endanger the claims of his creditors by the transfer of the title of said land to his wife, the defendant. Incidental »to this issue are other matters of fact, a presentation and discussion of the legal force and effect of which will, where necessary to the determination of this case, be made in the opinion.

The defendant’s assignments of prror are .as follows :

The absence of jurisdiction; the insufficiency of the petition; the .improper admission on the part of the plaintiff, and exclusion on the part of defendant, of testimony; and the refusal to permit Thomas Price to testify on the part of his wife, the defendant. Other assignments, formal in their nature, are incidental to and dependent for their determination upon the conclusions which may be reached in regard to the foregoing. The plaintiff’s assignment of error is that the judgment is n'ot responsive to the pleadings.

Jurisdiction I. The defendant contends that the making of the deeds in controversy more than four months prior to the of the petition herein divested the bankruptcy court of power to direct the trustee to prosecute this action, and that the State court consequently acquired none.

First, as to the validity of the act of the bankruptcy court: Upon an adjudication of bankruptcy, the decree becomes as immune from collateral attack as any other judgment. [Chapman v. Brewer, 114 U. S. l. c. 169; Lamp Chimney Co. v. Brass & Copper Co., 91 U. S. l. c. 661; Michaels v. Post, 88 U. S. 398; Marvin v. Anderson, 111 Wis. 387; Golden & Co. v. Loving, 42 App. D. C. 489; 5 Cyc. 237n; Collier’s Bankruptcy (11 Ed.), pp. 12, 121.] If possible, the conelusiveness of the decree is emphasized where, as here, the proceeding was voluntary. Not being subject, as a farmer, to the* coercive provisions of the act, the bankrupt invoked the jurisdiction of-the court (Sec. 4a), which is required to make an adjudication, or dismiss the proceeding, upon the filing therein of a petition (Sec. 18g), accompanied as it was with, a verified schedule of the bankrupt’s property and the names of his creditors, and the statement that he owes debts he is unable to pay, and is willing to surrender all of his property for the benefit of his creditors (Sec. 7, Subd. 8). Under this state of facts, the act of bankruptcy is held to have been committed upon the filing of the petition. [Hanover Natl. Bk. v. Moyses, 186 U. S. l. c. 190.] The finality' of the decree, therefore, obviates any objection of the general jurisdiction of the bankruptcy court, and as a consequence, its authority to direct the trustee to institute the action at bar.

In addition, it is clearly indicated by the language of the statute that the limitation of four months within which a trustee may sue to set aside transfers has reference to preferences' under Section 60a, and to proceedings under Section 67e, of the act, in which transfers are declared to be void if made within the time limited (Bush v. Export Sto. Co., 136 Fed. 918; Collier on Bankruptcy, 11th Ed. p. 1062 and cases), and not to the right of action of the trustee under Section 70e to set aside a fraudulent conveyance. [Underleak v. Scott, 117 Minn. l. c. 140.]

The provisions of the act in regard to the character of the trustee’s title to the property of the bankrupt estate, and the powers conferred on him in the care and management of same, are futher illustrative of the .unsoundness of defendant’s contention in regard to the application of the bankruptcy statute of limitations to this ease.

Section 47a, Subd. 2, of the Bankruptcy Act, as amended July 25, 1910, provides: “That as to all property not in the custody of the bankruptcy court, he (the trustee) shall be deemed vested with all rights and powers of a judgment creditor holding a judgment execution duly returned unsatisfied.” This provision must be construed together with those portions of Section 70a and Section 70e (In re Hammond, 188 Fed. 1020), of the act, as amended July 25, 1910, which further emphasizes the vesting of the title of the bankrupt’s property in the trustee, and expressly includes property transferred by him in fraud of his creditors, and authorizes the trustee to institute actions to avoid any of such transfers which any creditor might have avoided by a suit in a bankruptcy court, or in a state court, which would have jurisdiction if bankruptcy had not intervened. [Parker v. Sherman, 195 Fed. 648, 28 Am. B. R. 379.] The trustee is thus subrogated to the rights of the creditors, and the limitation as to his right of action is that prescribed by the State law as to proceedings to set aside fraudulent conveyances, and not to the four months of the bankruptcy act. [Baldwin v. Kingston (U. S. Dist. Ct. N. J.), 40 Am. B. R. 641; Manders v. Wilson, 230 Fed. 536; Holbrook v. Inter. Tr. Co. (Mass. Sup. Ct.), 107 N. E. 665; Bick v. Nimmo, 88 Atl. (Md.) 116; Hobbs v. Frazier, 55 So. 848; Newcomb v. Birver, 199 Fed. 529; Hall v. Glenn, 39 Am. B. R. (U. S. Dist. Ct. Cal.) 54; McKenna v. Simpson, 129 U. S. 506.]

Powers of and Rights of Creditors. II. It is not necessary to tbe maintenance of an action under Sections 47a and 70e for tbe trustee to aver or show that some creditor bas reduced bis claim to a judgment and issued execution tbereon which has been returned unsatisfied, as in a like proceeding in equity. [Bean v. Parker (Vt. Sup. Ct.), 38 Am. B. R. l. c. 903.] Tbe reason tberefor being that after an adjudication, no creditor can reduce bis claim to a judgment in tbe ordinary way, nor can tbe trustee do so in bis belialf. Tbis renders the relation of those whose claims have been allowed against tbe estate that of judgment creditors, and affords a reason for .the uniform ruling of tbe courts in that behalf, that a judgment returned unsatisfied as in an ordinary proceeding in equity, is not a prerequisite to tbe right of action of tbe trustee, but that in tbe exercise of tbis right be may, as a sort of alter ego of all of the creditors (Blake v. Meadows, 225 Mo. l. c. 26), file a bill to avoid any transfer by tbe bankrupt of bis property, which any creditor might have avoided bad bankruptcy not intervened. [Coleman v. Hagey, 252 Mo. l. c. 128; Hood v. Blair St. Bk., 91 N. W. (Neb.) l. c. 705; Southard v. Benner, 72 N. Y. 424; Beasley v. Coggins, 48 Fla. 215, 12 Am. B. R. 355; Mueller v. Bruss, 112 Wis. 406, 18 Am. B. R. 442.]

Mueller v. Bruss, supra, is but one of a type of many cases we have cited bolding that jurisdiction may be exercised by tbe court of a state, under Section 70e, to set aside a conveyance of real estate, made by tbe bankrupt six months prior to the filing of tbe petition in bankruptcy; and that a judgment and return of an execution are not a necessary prerequisite to such a suit, since, under the bankruptcy act, neither the trustee nor the creditors whom he represents could obtain such a judgment. The requirement as to a judgment, and the return and issue nulla bona of an execution required in equity before proceeding to have a fraudulent transfer set aside is to show that all other remedies have been exhausted.

A New York court in discussing this question, in a ruling in harmony with the cases above cited, says: “To hold that a trustee cannot attack a fraudulent conveyance made by the bankrupt more than four months before the filing of the petition, without showing that some creditor had obtained a judgment and issued an execution thereon, so that he could maintain a similar action, would be simply to provide an easy and convenient method for a dishonest debtor to dispose of his property.” [Thomas v. Roddy, 122 N. Y. App. Div. l. c. 856.] There is nothing in the rulings in Coleman v. Hagey, supra, which militates against this conclusion. What was said in that case in regard to the rights of creditors was arguendo, in reference to such' rights in proceedings not in bankruptcy. In that case we held the petition insufficient only on account of the omission therefrom of allegations that the trustee had no adequate remedy at law, or an equivalent allegation, showing the presence of jurisdiction peculiar to a court of equity. The petition in the case at bar not only does not lack any of the averments held essential in the Coleman-Hagey case, but in other respects meets the requirements of a bill in equity. [O’Farrell v. Poston (S. C.), 37 Am. B. R. 470.]

In Davis v. Gates (U. S. Dist. Ct. Pa.), 37 Am. B. R. 818, the sufficiency of such a petition as is here under review was exhaustively considered. There the pleading was held good, except as to a failure to allege that the defendant, to whom the property had been transferred, had knowledge of and participated in same. The trustee was permitted to- amend on the testimony showing such fact, and a decree entered hi accordance with the prayer of his petition. All of the questions as to good faith and the existence of creditors at the time of the fraudulent act are fully discussed in this case. The rulings therein define the requisites prescribed for a hill of this character, and the petition at bar is in conformity therewith.

A petition even more general in its terms was held good by the United States District Court for the Southern District of Georgia, in Johnston v. Forsyth Merc. Co., 11 Am. Bk. Rep. 669. The court said that while the charges in the bill might have been more elaborately stated, they are set forth with sufficient particularity to enable the defendant to traverse and meet them (p. 673). In that case, a demurrer was interposed, but it was not accompanied by a denial of fraud. The demurrer might have been denied on that ground. In the instant case, there was no demurrer, but simply a general denial.

Tne Supreme Court of Alabama, in Cartwright v. West. 185 Ala. 41, 64 So. 293, in ruling upon a petition broughl- by a trustee in bankruptcy, as in the case at bar, says generally that: “If the property was obtained by the defendant in fraud of the bankrupt act plaintiff was entitled to recover the same, and this is the only question involved.” And, further as to the proof required and the effect of the decree, that court says: “In order that we may not be misunderstood, we' hold: First. That when a bill is filed by a trustee to set aside a voluntary conveyance made by the bankrupt, he need only show one existing creditor who could have avoided the conveyance, and the State court will set aside the conveyance in favor of all existing creditors who file and prove their claims in the bankrupt court, and which last fact is to be determined and the fund distributed by said court. Second. When the trustee files a bill to set aside a conveyance as fraudulent and void as to subsequent as well'as existing creditors the averment of bankruptcy is sufficient to charge the existence of creditors, and that their demands are due, and, if relief is granted, the conveyance will he set aside as to all creditors of the bankrupt, and the property will become assets of the estate, and subject to the claims of all creditors who have properly filed and proven their claims, and which last fact is to be determined by the bankrupt court.”

Naming Creditors. III. It is further contended that the petition identifies no creditor entitled to the remedy. We take this to mean that a designation of the creditors by names is an essential allegation. The terms of the act defining the relation sustained by the trustee to the estate and as a consequence to the creditors are sufficiently definite and ample to furnish an answer to this contention.

Section 70 of the act, so far as same is pertinent hereto, provides that the trustee,- upon appointment and qualification, shall be vested with the title to the bankrupt’s property as of the date of the adjudication, excluding that which is exempt and including that transferred by him in fraud of creditors. By subdivision e. of the same section, it is provided that “the trustee my avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was bona-fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whomever may have received it, except a bona-fide holder for value.”

While in a sense the trustee in the exercise of the powers authorized under this and other sections of the act, may be said to be the alter ego of the creditors in that his action is for their benefit, he is, in law and in fact but an arm of the court and acts not for the creditors individually or collectively, but for the estate (In re Morton, 118 Fed. 908). The powers of the creditors as such, cease upon the adjudication of bankruptcy and the allowance of their claims, and thereafter they possess neither power to sue nor be sued in any proceeding to collect, control, preserve or recover the assets, the entire administration of the estate being invested in the trustee to be exercised under the direction of the Court (Coleman v. Hagey, supra; Blake v. Meadows, 225 Mo. l. c. 26). The merger of the identity of the creditors in the estate, therefore, in that they are stripped of all power after the adjudication, renders their specific designation in a; petition of the character here under review unnecessary. [Barrett v. Kaigler, (Ala.) 76 So. 320, 40 Am. B. R. 161; Cartwright v. West, (Ala.) 64 So. 293.]

The nature of the decree to which the trustee is entitled, when a fraudulent' conveyance is set aside, is a further indication of the immateriality of the allegation urged. Upon the rendition of the decree, the property inures not to the benefit alone of the unsecured creditors, existing at the time of the transfer, and who, in the absence of bankruptcy, would have been authorized to attack the conveyance; but to all of the creditors having provable claims, including those whose claims accrued subsequent to the transfer (In re Kohler, 159 Fed. 871; In re Farmers’ Co-op. Co., 202 Fed. 1008). Considering, therefore, the nature of the proceeding and the character of the decree that may be rendered therein, it will be sufficient for the petition, in so far as the contention here made is concerned, to allege that there were unsecured creditors existing at the time of the transfer, the aggregate amount of their claims, and that the assets of the estate are insufficient to satisfy the same (Treseder v. Burgor, 130 Wis. 201; Davis v. Gates, 37 Am. B. R. l. c. 482). This requirement is met by the petition.

Nor is it necessary that the creditors be designated to inform the defendant of the nature of the action. Their particular indentification can constitute no element of the defense; and if necessary for any of the purposes of the proceeding their introduction therein must he regulated by the rules of evidence, and not of pleading.

Amount or Nature of Claims. IV. The further contention is made that the petition does not state the amount or nature of any claim to which the property sought to be recovered can be applied. Much of the reasoning and the authorities cited in support of same to show the unsoundness of the preceding contention may well be applied to demonstrate the lack of tenability of that here made.

It will only be necessary therefore, to say in addition, that when a decree is rendered, setting aside a conveyance, the property recovered becomes a part of the general assets of the bankrupt estate, and is so distributed in the pro-rata payment of all -claims of a like character. The assumption, therefore, that upon a recovery of property by a trustee in a proceeding of the character here involved, it can be applied to the payment, of any particular claim, is wholly unfounded.

Sustained by reason, and approved by numerous authorities, we hold the petition herein sufficiently states all of the material allegations necessary to clearly present the issues involved, and that the objections made thereto by the defendant are not tenable.

Testimony. V. The admission of testimony to show the amount of secured claims against the estate is assigned as error. A material allegation had been made in the petition that the assets of the estate then in possession of the trustee were insufficient to satisfy the claims against the estate. The introduction of testimony, therefore,, as to all of the claims, whether secured or unsecured, was necessary to sustain this allegation.

Objection to the admission of testimony as to other claims are based upon the ground that they had not been reduced to judgment, and hence were not such claims as were admissible as tending to show the financial condition of the bankrupt. The testimony admitted was only in regard to claims which had been allowed by the bankruptcy court, and, as we have shown, partook of the nature of judgments. No error was committed, therefore, in their admission in evidence. The ruling in Crim v. Walker, 79 Mo. 335, and in Davidson v. Dockery, 179 Mo. 687, cited by defendant in support of this contention, have reference to claims of unsecured creditors in ordinary proceedings in equity, and not in bankruptcy; hence they have no application here.

Testimony of Husband. VI.' Error is also assigned in the refusal of the trial court to permit the bankrupt to testify in behalf of his wife, the defendant. This contention is based on the assumption that the husband is a. tenant by the curtesy initiate in the land conveyed to his wife; and that the interest thus created renders him, under Section 6354, Revised Statutes 1909, a competent witness in this proceeding and removes his common law incompéteney and the limitation by exclusion to his testimony under Section 6359. This reasoning would have been more cogent if he had been made a party to the suit and his right to testify had been based on an interest acquired in his wife’s property prior to the enactment of the Married Woman’s Act in 1889, when the husband was, upon the birth of living issue, seized of an estate for life in his own right as a tenant by the curtesy initiate. Since the enactment of this statute,- however, the wife as to the control and conveyance of her separate property is sui juris, and as such clothed with the right to sell her land and make a deed thereto independent of her husband. The consequent effect of this grant of power is to destroy the tenancy by tbe curtesy initiate, because it can no longer exist as an estate or intesest in tbe husband in tbe presence of tbe wife’s complete power of disposal of ber property, but is reduced to a mere interest in expectancy.

This conclusion finds its sufficient support in tbe language and purpose of tbe Married Woman’s Act itself, wbicb provides as to tbe matter bere at issue, that sbe shall be deemed a femme sole, so far 'as to enable ber to carry on and transact business on ber own account, to contract and be contracted with, to sue and be sued, and to enforce and have enforced against her property such judgments as may be rendered for or against her; and that, in law or equity, sbe may sue or be sued without ber husband being joined as a party. [Sec. 8304, R. S. 1909.].

In construing this statute, we have explicitly held in Farmers’ Bk. v. Hageluken, 165 Mo. 446, that it empowers a married woman to convey ber real estate without joining ber husband in tbe deed.

Further than this, that sbe may grant power to an agent to make a binding contract for tbe sale of ber land or to ratify such a sale when made. [Kirkpatrick v. Pease, 202 Mo. 471.]

These rulinss are in evident accord with tbe snirit and purpose of tbe act, tbe effect of wbicb as we have stated, in conferring upon a married woman tbe absolute power of disposal of ber property, destroys whatever present estate tbe husband may have therein, wbicb would, prior to tbe enactment of tbe statute, have qualified him, by reason of interest, to testify in a suit brought by or against ber concerning ber separate property.

A contrary ruling is impliedly announced in Roberts v. Bartlett, 190 Mo. l. c. 702, in wbicb it was held, in a suit brought by wives and husbands, as joint plaintiffs, after tbe enactment of tbe Married Woman’s Act, concerning tbe separate property of tbe former, that the latter were competent witnesses on account of their material interests in the properties, as tenants by the curtesy initiate. This ruling is erroneous, so far as it is based upon the assumption that the interest named exists in the husbands to the extent of rendering them competent to testify under Section 6354; such interest being, as we have shown, non-existent since the enactment of the Married Woman’s Act. Aside from this ruling, based as well upon the fact that the husbands were co-plaintiffs, not the case here, the current of authority is in harmony with that announced in the Hageluken case, as to the complete dominion and right of disposal by the wife of her separate property, and the consequent absence of such an. interest therein by the husband as to render him a complete witness in a suit against her.

Whatever doubt may seem to be cast on the Hage-luken ruling by certain language employed in Myers v. Hansbrough, 202 Mo. 495, is dissipated by an analysis of the facts in that case, in which the question involved was one of tenancy by the curtesy consummate, and not initiate. The wife died, seized of real estate. Issue had been born alive, and upon the wife’s death curtesy was cast upon the husband. The sole question upon which the language of the court -could have any. ruling force was one of preference between the creditors of the wife who had no lien, and the husband, as the owner of the estate by the curtesy consummate. This was independent of any consideration of the interest of. the husband during the life of the wife. The expression, therefore, in that .case, that curtesy initiate constitutes a vested interest cannot reasonably be construed as more than a passing remark, and being responsive to no issue is determinative of nothing. Otherwise construed, the effect of the Myers case is to declare that a husband can have a vested interest, by the .curtesy initiate in his wife’s real estate, contemporaneously with her power under the statute of 1889, to. convey same and invest the grantee with an absolute fee therein. Such a construction limits the letter and destroys the purpose of the Married Woman’s Act. It it repugnant to reason, and. despite the remark made in Teckenbrock v. McLaughlin, 246 Mo. l. c. 717, that “there are two lines of authority in this State on this question,” the rulings here and elsewhere will be found in accord with that in the Hageluken case. The Teckenbrock case did not attempt, nor was it necessary for it to define the nature of a husband’s interest as a tenant by the curtesy initiate in his wife’s property since the enactment of the Married Woman’s Act. All that it did decide was that when suit was brought by a husband and wife, to set aside a will, it could not be maintained on the ground of the husband’s interest as tenant by the curtesy initiate in the property of his wife acquired by descent since the statute of 1889. That nothing therein gave any authority to the maintenance of an action of this character under Section 555, Revised Statutes 1909; defining who may contest the validity of wills; and for the additional reason that the issue was res adjudicata, in having been determined in a former proceeding identical in its character.

Apposite precedents affirming the rule announced in the Hageluken case are to be found in Kirkpatrick v. Pease, 202 Mo. l. c. 490; Harvey v. Long, 260 Mo. l. c. 391; Moseley v. Bogy, 272 Mo. 328; Haguewood v. Britain, 273 Mo. l. c. 92; and Regal Realty & Inv. Co. v. Gallagher, 188 S. W. (Mo.) l. c. 153.

The ruling of the trial court, therefore, as to the incompetency. of the husband to testify, was not error; first, because he was not a party to the proceeding, and second, because he had no material interest in the judgment to be rendered within the meaning of Section 6354. See Layson v. Cooper, 174 Mo. l. c. 223, and cases cited, discussing the competency of husband and wife as witnesses under facts similar to those at bar.

Decree. VII. Tile relief sought was the setting aside of the fraudulent conveyance under which it was alleged that the defendant held the land. Other than formal allegations necessary to properly plead this character of action, the petition specified the existence of a prior lien, evidenced by a mortgage and homestead interest in the land, to which it was prayed that the decree, if rendered, be made subject. The answer contained nothing which in any way extended the issue, its defensive character being limited, wholly to a general denial.

Aside from the introduction in evidence of the existence of a mortgage for $1090 placed on the land by defendant, subsequent to its transfer to her, the record is silent on this subject. Despite this fact, the trial court, while finding the conveyance to the defendant fraudulent, and that the decree should be rendered subject to the pre-existing mortgage and homestead interest, also .found that it should be subject to the $1000 mortgage placed on the land by the defendant. This latter finding was unauthorized. It was not an issue in the case, and was not admitted to be so made by the parties. [Welz v. Venard, 253 Mo. 67; Davidson v. R. Est. & Inv. Co., 249 Mo. 474; Howard v. Scott, 225 Mo. 685; Charles v. White, 112 S. W. 545; Schneider v. Patton, 175 Mo. 684.]

The rule, therefore, that in a chancery case any relief may be granted consistent with the pleadings, can have no application here. [Ames v. Gilmore, 59 Mo. 537.]

Nor need the rule, in the condition of the pleadings, be invoked that if the conveyance be fraudulent, the defendant got no title, and hence could convey none. [Peyton v. Rose, 41 Mo. 257.]

But it will suffice to say that the decree should have been limited to a determination of the character of the conveyance under which the defendant held the land subject to pre-existing liens, as stated in the petition. A finding other than this did not respond to the issues, and was consequently error.

This will necessitate a reversal and remanding of this case, with directions to the trial court to enter a decree in accordance with the views herein set forth. It is so ordered.

All concur, except Blair, J., not sitting; Faris and Williams, JJ., concur in the result and in all except paragraph 6.