261 Mo. 675 | Mo. | 1914
Suit begun in Pike County Circuit Court, August 26, 1909. The plaintiffs are Wertheimer-Swartz Shoe Company, and Laudan Grocery Company, corporations, and Louis Landau their trustee. The defendants are Clevie H. Wyble, Bank of Eolia and William J. Buchanan. The object of the suit is to obtain a decree establishing the title to about one hundred acres of land in Pike county as against the defendants.
The petition states, in substance, that in October, 1906, L. Taylor Sanderson, and Robert B. Sanderson, as executors of the will of Thomas N. Sanderson, deceased, for the consideration of $4000-, conveyed the land in question to Tillie P. Rettke, wife of one Gustavus Charles Rettke, by deed duly recorded. That the purchase money was paid by Gustavus Charles Rettke by the transfer to the grantors of a stock of goods owned
“That the said judgments were from and after said 12th day of November, 1906, and still are, liens upon said real estate; that on the 23d day of August, 1907, said Tillie P. Rettke and her said husband by deed of conveyance of that date purporting- to convey said lands to said Clevie H. Wyble, which said deed was made without any consideration moving therefor, and was made with full notice to the parties thereto of the attachment of said lands, the lien thereon and the sale thereof as hereinbefore set forth; that such pretended sale was made and accepted in bad faith for the purpose of defrauding, hindering and delaying the creditors of said Gustavus Charles Rettke, and Clevie H. Wyble held said lands in trust for said creditors, and the said Clevie H. Wyble still so holds the same; that on the 30th day of August, 1907, said Clevie H. Wyble made a deed of conveyance of said lands purporting to be a deed of trust in the nature of a mortgage to said William J. Buchanan, as trustee for said Bank of Eolia, made for the pretended purpose of securing the payment of a promissory note for $2000 made as alleged by said grantor to said bank; that said deeds' of trust and promissory noté were made without any
“Plaintiffs further state that said Gustavus Charles Rettke was rendered insolvent by said alleged sale of said lands to his wife, that he had no other property at any of the times herein mentioned nor has he any now and plaintiffs have no remedy at law and no means of collecting their said, debts except by proceedings as herein set forth.
“Wherefore plaintiffs pray that said conveyances of said lands to said Tillie P. Rettke, to the said Clevie IT. Wyble, and the deed of trust to said William J. Buchanan, trustee for said Bank of Eolia, and each of them, be held fraudulent and void as against the creditors of said Ghstavus Charles Rettke, and especially the plaintiffs, and for all such further relief as may be deemed meet and just, and for costs.”
Wyble answered admitting the execution of the deed from Tillie P. Rettke to himself and denying all other allegations of the petition. The bank and Buchanan filed a joint answer admitting the execution of the deed of trust and denied each of the other allegations of the petition. It will be observed that there is no allegation in the petition of the execution of a deed by the sheriff. The respondents made the following statement in their brief:
“ This suit was brought under section 416, Revised Statutes 1899. Every .allegation as required by said section is set out in the petition.”
The court recites in its decree that the Sander-son conveyances “were fraudulent as to the plaintiffs and were a part of the plans and scheme and were procured by the said Tillie P. Rettke with the knowledge of the other defendants, for the purpose of de
The decree also mentions quitclaim deeds of twenty-three other persons, made and recorded before the beginning of this suit, and not mentioned in any pleading in the case, holding that they were made without consideration for the purpose of correcting supposed defects in the original executors’ deed, and are fraudulent and void as to the plaintiffs.
Under the ruling of this court in Craig v. Railroad, 248 Mo. 270’, approved in Bridge Co. v. Corrigan, 251 Mo. 683, the bill of exceptions was filed too late, and the case is before us on the record proper only. This imposes the duty to inquire whether the petition is sufficient to support the decree rendered. The sufficiency of the petition as the statement of a cause of action is a proper subject of inquiry at every stage of the case. [R. S. 1909, sec. 180.]
From an examination of these pleadings it is not easy to obtain a clear idea of the nature and object of the suit. The controversy is about a tract of land alleged to have been sufficiently valuable to have been sold by its owners to • one Rettke for $4000. The payment-of this amount stripped Rettke, who owed nearly $500 to two of the plaintiffs, of everything he had, and he caused the land to be conveyed to his wife, so that to all appearances she became the capitalist and he the insolvent debtor. Each of the two creditors sued him by attachment, levied on the same land, obtained judgment, and one of them took out- an execution under which he caused it to be sold by the sheriff. Instead of bidding independently, they jointly employed their co-plaintiff to bid for them both, and he became the purchaser for three dollars. The petition leaves them here. It does not disclose that a sheriff’s 'deed was made.
Although it is evident that none of the plaintiffs have or can be entitled to any interest in the land otherwise than under the deed to Mrs. •Rettke, the only prayer of the petition is that this deed be held fraudulent and void. It is true that there is, if we use a little construction to aid the language, a prayer
The fact that in such a case as this, whatever may be the nature of the rights and remedies of creditors, and they are undoubtedly ample, the debtor has no title, either legal or equitable, of which the law can take notice, has induced some courts to doubt whether there is anything vendible on execution under statutes like ours, which only cover “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 at
The Supreme Judicial Court of Maine, in distinguishing a case like the present, Des Brisay v. Hogan, 53 Me. 554, said: “It was decided in Corey v. Greene, 51 Me. 114, that where the debtor never had any title to the land, a levy is unnecessary. It is true that, in that case, the title was held by a stranger, while in this it is held by the debtor’s wife. But this makes no difference. It is only when the debtor once had a' title to the land and has conveyed it away fraudulently, that a levy can be of any use. In such case, the conveyance being fraudulent, it is as to the creditor no conveyance, and he may treat the title as still remaining in the debtor. But when, as in this case, the debtor never had any title, treating the conveyance to his wife as either valid or void will not give him a title — it will be either in "the wife or her grantor — it will not be in the debtor — and a levy upon it as his property would be an idle and useless ceremony. No title could possibly be obtained by it.”
In Chicago & A. Bridge Company v. Packing Company, 46 Fed. 584, 588, a similar case which arose under the Missouri statute, the court said that there is much practical sense in this distinction. ‘Justice, however, does not require that we should follow it in this case. We can rather profit by the example Dickens has given us in Mr. Jaggers. The scented soap with which he washed his hands of the sins of his clients left an odor more pungent, and characteristic, and telltale, than the sin itself. So when a court of equity has found that a litigant has, by an attempted fraud upon his creditors, either actual or constructive, placed him
The plaintiffs claim to have three dollars worth of equity in the four thousand dollars worth of land. It will not be claimed for a moment that the Eettkes, or any of the defendants, ever received any benefit whatever from this three dollars; in short, the court, in vindication of its own common sense and common knowledge, will presume that it was not sufficient to pay the cost of advertising and other costs incident to the sale. Instead of this sum having been applied to any extent toward the satisfaction of the judgments, it was used by the plaintiffs in payment of the cost of putting themselves in the commanding position from which they are carrying on this suit, leaving their judgment still intact for future use.
It was quite unnecessary that the plaintiffs should have expended these three dollars. The statute under which they attached the land gave them a remedy as broad and effective as that afforded by the statutory provisions relating to fraudulent conveyances and sales upon execution combined; and it certainly limited its remedy to a time preceding the execution and delivery of the sheriff’s deed in which the attachment proceeding, if successful, must culminate; for it is given to the creditor and not to the execution purchaser. [R. S. 1909, sec. 2344.] The statement of plaintiffs in their brief that the ease was brought upon the section just cited, together with the fact that the petition fails to allege the execution of a sheriff’s deed, and does state that the defendant Wyble still holds the
There is no subject upon which the courts and textbooks have been more circumspect in the use of language than in treating of the effect of inadequacy of price upon execution and judicial sales. Mr. Rorer states the doctrine thus: “If there be no fact or circumstance relied on to set a sale aside but inadequacy of price, then the inadequacy must be such as in itself to raise the presumption of fraud, or else the sale will not be disturbed.” [Rorer on Jud. Sales (2 Ed.), sec. 549.] In section 1095' of the same excellent work he repeats the idea as follows: “But although inadequacy of price will not alone be cause to set a sale aside, unless so gross as to raise a presumption of other cause, yet when inadequacy is combined with accident or appearance of fraud or unfairness, the sale will be set aside.” In Mangold v. Bacon, 237 Mo. 496, 523, the court in correcting the language used by the majority in the same case upon a former appeal (229 Mo. 459), with a trifle more frankness said: “The majority opinion closed and locked a door heretofore open for use to reach relief in extreme and aggravated cases. That door should be left open — not only so, but used in this case on the facts here before us, even if no other ground of relief appears. In so far as the' majority opinion is in' conflict herewith, it should not be followed.” We also, said in Guinan v. Donnell, 201 Mo. 173, 202: “It has always been held by this court that
Applying these principles to the case stated in this petition we find no difficulty in dealing with the alleged equities of the plaintiffs; The inadequacy of price under the circumstances alleged is such as to render the sale a feigned and colorable one, a form through which whatever title or interest could be conveyed through the execution sale might be taken by these creditors without any rebate from their respective judgments or other consideration. This alone casts discredit upon the transaction, for the law contemplates that the single purpose for which land may be sold out at execution sales of this character is to raise money for application upon the judgment debt. The laws for this purpose are not open to the discreditable interpretation that they were devised to give creditors the opportunity to speculate upon either the misfortunes or sins of their debtors. Added to these considerations is the fact that the petition shows upon its face that the inadequacy of price was produced by a wrongful combination between the attachment creditors which amounted to a fraud against the debtor.
We do not say that it is not competent for creditors under some circumstances to combine to bid upon the property of a debtor. We only say that any such combination is unlawful which leaves out of consideration the right of the debtor to a fair disposition of his property and substitutes’ its appropriation by the combination without any consideration whatever. In Durfee v. Moran, 57 Mo. 374, 379, in considering the same question we said: “That the price was grossly inadequate there can be no doubt, and although it is true that inadequacy of consideration is not of itself a distinct or independent principle of relief in equity, still, where the transaction discloses a state of affairs that shocks the moral sense or outrages the conscience, courts will interfere on slight circumstances to promote the ends of justice and defeat the schemes of fraud. [Han. & St. Joe R. R. Co. v. Brown, 43 Mo. 294.] Where property is palpably sacrificed, and a valuable estate is acquired for a mere pittance, all the attending circumstances will be closely scrutinized.
It does not help the plaintiffs to say that the transaction out of which they are trying to develop their remedy is a fraudulent one, and that therefore the defendants must be content to be meat for any beast of prey that chooses to make a meal off them. One cannot read the petition and 'decree without the impression that it was intended to be framed upon the theory 'of constructive notice of the attachments by the filing of the abstracts, and that these attachments of this land were notice of the claim that the title of Mrs. Rettke was affected by the fraud charged generally in the affidavit. The fact that the defendants overlooked or misapprehended these things would not outlaw them. In fact, were they in the penitentiary for crimes growing out of the same fraud, the circumstance would not justify this court in abating its watchfulness to make sure that any litigant seeking the aid of its equity powers to extinguish their interests came with clean hands and a worthy cause. We are of the opinion that could we consider this petition as a bill to remove the cloud of the Wyble claim from a title acquired by plaintiffs through the execution sale, it contains no equity, and the decree necessarily entered upon that theory is therefore erroneous. We do not think that, should it turn out that a deed was executed by the sheriff in pursuance of his sale to Landau, the circumstance, under the facts of this case, would stand
• The judgment of the circuit court is reversed, and the cause remanded for further proceedings in accordance with this opinion, with leave to the parties to amend their respective pleadings in accordance with the rules of law applicable in such cases should they be so advised.
PER CURIAM. — This cause coming into Banc on a dissent is reheard there;
