96 Mo. 216 | Mo. | 1888
This is an equitable proceeding, having for its object the determination of the question whether the plaintiff Slattery or the defendant, The German Savings Institution, has the better title to the property in controversy. Briefly told, the facts in the case are these: “ John Jones, being insolvent and largely indebted, for the purpose of defrauding his creditors, conveyed his property to his wife’s trustee in May, 1883; shortly thereafter, the German Savings
Subsequent to the obtaining of the judgment of January 8, 1884, in favor of said German Savings Institution, and on March 10, 1884, one day prior to the levy of execution thereunder, the plaintiff Slattery brought an attachment and levied the same on the same property, filed notice of his attachment on that day and followed it by judgment, execution, sale and deed recorded in June, 1884, and now claims that the subsequent levy of its attachment gave it a better lien upon the land than the German Savings Institution acquired by its prior judgment, followed in due course by execution and sale and deed.
The court below held that a judgment is not a lien upon property fraudulently conveyed prior to its rendition ; that such a transfer is not void, but only voidable as against creditors ; that the levy of an attachment created a superior lien to the supposed lien of a judgment thus rendered, and decreed the title to be in the plaintiff. Our statute declares that every conveyance of land made with intent to defraud creditors, etc., “ shall be from henceforth deemed and taken as against said creditors and purchasers * * * to be clearly and utterly void.” R. S., sec. 2497.
Sec. 2730: “Judgments and decrees rendered by any court of record shall be a lien on the real estate’of the person against whom they are rendered situate in the county in which the court is held.”
Sec. 2731: “ Such liens shall commence on the day of rendition of the judgment and shall continue for three years.”
Sec. 2767: “The term ‘real estate’ as used in this chapter shall be construed to include all estate and interest in lands, tenements and hereditaments liable to be sold upon execution.”
Sec. 2361: “No execution, prior to the levy thereof, shall be a lien on any * * * real estate to which the lien of the judgment * * '* does not extend.”
Sec. 2354: “The following property shall be liable to be seized and sold upon attachment and execution issued from any court of record: * * * fifth, all real estate, whereof the defendant, or any person for his use, was seized, in law or equity, at the time of the issue and levy of the attachment, or rendition of the judgment, * * * whereon execution was issued, ” etc.
In his work on Executions, Mr. Freeman observes : “Whoever goes out with an execution to seek the fruits of his judgment is too apt to find that fraud has forestalled him. It then becomes his business to pursue those fruits, wherever fraud has taken them ; to wrest them from the possession of his adversary, wherever they may be found, and to prepare himself to show that the refuge whence he has wrested them is still the refuge of fraud. In many instances, the aid of equity is invoked. But generally this is unnecessary; for a transfer made to hinder, delay or defraud creditors, while as between the parties it conveys the title, has, as against a creditor proceeding under execution, no such
And though the learned author states that if land be bought with the money of the debtor, and the title taken in the name of another, that in such case the title cannot be reached by e'xecution, but resort must be had to a court of equity; yet he admits that the rule is different in those states where statutes have been enacted which enable creditors to reach the legal title at law, citing, among others, the cases of Dunicca v. Coy, 24 Mo. 167; Rankin v. Harper, 23 Mo. 579; Eddy v. Baldwin, 23 Mo. 588, where that doctrine is announced as the law of this state. In Rankin v. Harper, supra, Leonard, J., said: “Our law subjects all that a man has as property to the payment of his debts, and we know of no reason why the trust that results to him who pays the purchase money * * * should not be allowed to result to the debtor for the benefit of his creditors, so as to afford them the speedy and easy remedy of an execution sale.”
In Bobb v. Woodward, 50 Mo. 101, it is declared that “ it has become settled law in Missouri, that upon lands held by a third person in fraud of creditors for the benefit of the debtor, or fraudulently purchased with money of the debtor and conveyed to his family, there is a resulting trust to the debtor for the benefit of the creditors, which may be sold upon execution. * * * It is held to be such an equitable estate as is comprehended in the language of the statute, which subjects to sale upon execution ‘ all real estate whereof the defendant or any person for his use, was seized in
An author of recognized authority says : “If the creditors obtain judgment against the debtor after the transfer, they acquire liens upon his property wherever the same are given by law, according to the dates of their respective judgments, in the same manner precisely as if no transfer had been made ; for the transfer is a nullity as against them, and the legal, as well as the equitable, title remains in the debtor for the purpose of satisfying debts.” Bump on Fraud. Con. [3 Ed.] 474. This position is abundantly sustained by the authorities. Jacoby’s appeal, 67 Penn. 434; Manhattan Co. v. Evertson, 6 Paige, 457; Mulford v. Peterson, 35 N. J. L. 127, and cas. cit.; Eastman v. Schettler, 13 Wis. 324; Thomas v. Walker, 6 Humph. [Tenn.] 93; Thomason v. Neiley, 50 Miss. 513; Scouten v. Bender, 3 How. Pr. 185; McKee v. Gilchrist, 3 Watts, 230.
I find no case in this court where the point has been directly decided in accordance with the cases just cited ; but such a decision necessarily results from our statutes and adjudications already quoted. If, as against creditors, the fraudulent conveyance of the debtor is a nullity, a dead letter, “clearly and utterly void,” as the statute puts it, how is it possible for such a conveyance, even though it be prior in point of time, to balk a creditor’s judgment of its customary and binding force and operation % If our statutes are to receive the meaning which their plain language imports, I cannot see how the attitude of this case differs from that of one where the fraudulent conveyance is made subsequently to the recovery of judgment.
It is said, however, that if a conveyance be made by the fraudulent grantee, it would pass a good title to an innocent purchaser, as against the alleged judgment lien; and that this circumstance shows that the judgment cannot be a lien against the property. I cannot
All that the last purchaser, innocent, of course, has to look to, is that the title of his immediate grantor is clear upon the record; he is not bound to search for judgment liens occurring subsequently to the time of his grantor’s acquired title. Moreover, but for statutory provisions, requiring that an abstract of the land attached be filed in the recorder’s office, it is to the last degree doubtful whether the property of A, fraudulently conveyed to B, and afterwards attached as that of A, would be affected by the attachment lien, when subsequently conveyed to innocent purchaser C.
And, if the debtor, by reason of the fraudulent conveyance, has no interest to which the lien of a subsequently rendered judgment could attach, it is very difficult to see what interest would be left in him which can be seized by the subsequent levy of the writ of attachment. It appears to me that the same argument which defeats the one, also defeats the other. If there be nothing remaining for the judgment lien to fasten on, how will the attachment lien fare any better % The fact that the judgment lien is a general one, and the attachment lien a specific one, cannot alter the case or vary the result, since, in either instance, there must be something, and that something an interest of the debtor in the real estate, upon which the general binding force of
N ow, all the cases in this state show that the debtor, in instances similar to the one at bar, has a leviable interest in the fraudulently conveyed property, and wherever this is the case, “the right to issue execution and to satisfy it by the sale of the real estate, ordinarily implies that the judgment is a lien upon such real property,” and “because the lien of a judgment is inseparably associated with * * * the right to take lands in execution, it follows that there can be no lien except upon such judgments as the plaintiff is entitled to satisfy by levy upon the lands of the debtor.” Freeman on Judgments, secs. 350, 340. Indeed, it is impossible to conceive of a judgment capable of being enforced against real property, upon which it is not a lien. Stadler v. Allen, 44 Iowa, 198, and cas. cit.
In this case, it will scarcely be denied that the judgment of the appealing defendant was capable of being enforced by execution against the property of Jones, while it remained in the hands of his fraudulent grantee; to deny this, would be to deny and to annul the force and effect of our statutes on this subject, and numerous decisions based thereon. The only question here at issue is one of priority between the judgment lien and that of the attachment. But, according to the premises, if the judgment was capable of enforcement, then it must have been a lien. The capability of enforcement being established presupposes the existence of a lien which is the basis of such capability.
Here then, we have first, a fraudulent conveyance of real estate, and for^that reason, void; second, such real estate liable to be sold upon execution as that of the fraudulent grantor and debtor; third, a judgment rendered against such debtor, which the statute declares shall bind with its lien all real estate, etc., liable to be sold upon execution. When all these things are taken into consideration, it seems to me that there is no room.
This execution, according to the terms of the statute (section 2361, supra), was a lien, also, upon the property in controversy; and it is by no means certain that a levy of the execution was necessary in order to a valid sale of that property. Freeman on Executions, sec. 280. This court has confessed that the law is silent as to what acts are necessary to constitute a levy on real estate. Duncan v. Matney, 29 Mo. 368. When the sale was made under this execution, and a deed made to the purchaser, the deed related to the date of the judgment (Union Bank v. Manard, 51 Mo. 548), and cut out all intervening liens and incumbrances. Durrett v. Hulse, 67 Mo. 201.
In relation to the delivery of the execution to the sheriff to hold for further orders, no importance is to be attached to it. The land was sold at the return term of the writ, and the delay was satisfactorily explained by counsel. But even had it not been thus explained, there exists no reason why the rights of the defendant should be postponed or subordinated to those of the plaintiff. There was no hindrance of the plaintiff from attaching the property. There is a very wide distinction in this regard between liens upon real, and those upon personal, property. Ensworth v. King, 50 Mo. 479; Bump on Fraud. Conv. 571. Dormancy cannot be affirmed of an execution in regard to a sale of land. Even agreements to postpone the issuance of execution where land is to
In conclusion, it has not been thought necessary to review, in detail, the authorities which are opposed to the views here announced, as to a judgment being alien upon property previously transferred to a fraudulent grantee, for the reason that those views are thought to be best supported by reason and authority, and that they are in consonance with our own statutes and adjudications in relation to matters similar to those involved in this controversy.
The result is that the judgment must be reversed and the cause remanded.