Court Opinion

ID: 8012030
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:59:19.682637+00
Date Added: 2024-06-11T16:36:07.857395
License: Public Domain

Bakclay, J.
This is a suit to set aside a deed of conveyance of land in Lincoln county. The deed was made by Mr. Lemuel M. Wells to Mr. Fielden Estes, May 17, 1887.
These parties are the defendants in this suit.
The plaintiffs are the purchasers of Mr. Wells’’ interest in the .land under a judgment against him. The judgment was rendered after the deed was duly executed and recorded.
The attack upon the instrument is grounded on the charge that it is void because designed to defraud the *407creditors of Mr. Wells, and that Mr. Estes, the grantee, participated in that purpose.
The allegations of fraud are denied by the answer.
The cause was fully heard; and, upon due consideration of a large mass of testimony, the circuit court found for plaintiffs and entered a decree annulling the deed.
Following is a general outline of the case:
In 1869, Mr. Wells bought a large body of land in the northeastern part of Missouri. The estate was generally known in the vicinity as the “Cole Land,” or tract, as it had formerly belonged to Mr. Cole. It comprised about 3,000 acres, 2,400 of which were in Pike county, and 600 in Lincoln county. The purchase price at which Mr. Wells bought was $45,000. Of this amount he paid in cash $17,700, and gave notes for the remainder, secured by a deed of trust on the entire tract.
About the same time Mr. Wells borrowed of his brother, Mr. Charles C. Wells, who lived in West Virginia, $10,000, for which he executed a note. This $10,000 was, presumably, a part of the cash payment made by L. M. Wells on the Cole land.
At the time of the purchase of the Cole land, L. M. Wells was the owner of other tracts in, and around Ashley, Missouri, and was largely indebted to sundry persons; to secure them he had mortgaged his Ashley lands.
As time passed on, L. M. Wells’ indebtedness (some of which bore-ten per cent interest) swelled to such proportions as to render him virtually insolvent.
In 1886 Mr. Charles C. Wells died, and shortly afterwards (in the same year), his legal representatives began an action in Pike county against Mr. Lemuel M. Wells to recover the indebtedness due by the latter to his brother Charles which had grown (by additions *408of interest) to nearly $30,000. That case resulted in a judgment against Lemuel M. Wells in favor of his brother’s estate, April 17, 1888, for $31,395.40; and it was under that judgment that the execution sale to plaintiffs, of that part of the tract which lies in Lincoln county, was made.
The defendant, Mr. Estes, long before the death of Mr. Chas. C. Wells had advanced money as loans to the defendant Mr. Wells, taking as security the purchase money notes of the Cole land from the prior holders thereof; and had also made other loans to Mr. L. M. Wells, to secure which he accepted a second deed of trust on the Cole tract.
In consequence of these transactions, defendant Mr. Wells was indebted to defendant Mr. Estes, May 18, 1887, in a sum which at that time was ascertained, by an account taken between them, to be $48,880.03, secured upon the Cole tract.
On that date the deed in question was made to Mr. Estes by Mr. Wells. It is an absolute deed to the ■entire Cole property for a recited consideration of .$48,000.03.
At the date of the deed, the action was pending ■against Mr. Wells, for the debt due his brother’s estate, which resulted in the judgment in 1888, under which plaintiffs claim their interest in the property.
The contention of the defendant, Mr. Estes, is that the transaction was a fair and honest purchase of Mr.- Wells’ interest in the land for the debt then due upon it, subject to a right of Mr. Wells to repurchase the property for a certain price within a specified period.
This right was evidenced by a written agreement, of May 18, 1887, between the parties, the particulars of which need not be more fully given.
The plaintiffs contend, and the trial court found, *409that the circumstances of the transaction established that its purpose was to cover up and conceal the property from the creditors of Mr. L. M. Wells, and that both grantee and grantor shared therein with the same design.
It is not necessary to go minutely into the details of the testimony in this opinion. A variety of facts were shown which tended strongly to support the plaintiffs’ allegations.
Many conversations and admissions of the principal defendant were given in evidence, by living witnesses, conducing to support the theory that Mr. Estes intended to aid Mr. Wells in, at least, hindering or delaying the promoters of the suit then pending.
The rules of law applicable do not seem to be seriously in controversy.
It is settled in Missouri that a debtor in failing circumstances may prefer one creditor to another.
It is equally well recognized that fraud must be affirmatively proved, but yet it may be shown by circumstantial, no less than by direct evidence.
It is also plain law that a purchaser of property from a failing debtor may be affected by the intent of the latter to hinder, delay or defraud his other creditors,. where such purchaser shares that intent and aids in giving effect to it. In that event, the transaction is rendered void by the express terms of our positive law, even though the purchaser may have given a sound price.for his purchase (R. S., 1889, sec. 5170).
Whether the transaction between the defendants was a conditional sale, or a mortgage in equity, we need not inquire. For if it was not characterized by good faith, it could not stand as to creditors, whatever its effect might be between the immediate parties.
The supreme court in suits of this nature, which fall within the cognizance of equity, has jurisdiction to *410review the facts as well as the law, and to pronounce the conclusion which may appear just upon such a review.
It is unnecessary to comment on the particulars of the case as presented by the facts of this record. We have considered them carefully, and see no ground to disapprove the decree of the circuit judge, the effect of which was to cancel the transfer to Mr. Estes of the equity of redemption owned by Mr. Wells. We regard the testimony as sustaining the conclusion then reached, and accordingly affirm the judgment.
Black, C. J., Brace and Macearlane, JJ., concur.
Per Curiam.
In pursuance of the foregoing opinion of Barclay, J., as modified, delivered in Division No. 1, which is adopted as the opinion of the Court in Banc, the judgment of the circuit court is affirmed. But in so doing the judgment is not to be taken as an adjudication upon any rights Mr. Estes may have, growing out of the relation of mortgagee to the property as it existed before the attempt to transfer Mr. Wells’ equity by the deed thereby canceled.
Brace, C. J., Barclay, Gantt, Sherwood, Macearlane, Burgess and Robinson, JJ., concurring.