Hoffman v. Nolte

29 S.W. 1006, 127 Mo. 120, 1895 Mo. LEXIS 238

• Court: Supreme Court of Missouri
• Decided: March 5, 1895
• Status: Published

Opinion

G-antt, P. J.

This is an action in equity to divest the title from defendant Anna Nolte in certain real estate in the city of St. Louis, and to set aside a certain deed of conveyance thereto by Joseph Nolte on the ground that it was executed in fraud of creditors. The tract contains twenty-one and thirty-nine hundredths acres. The substance of the petition is as follows:

Plaintiff states that on the fifteenth day of March, A. D. 1892, he recovered a judgment in the circuit court of the city of St. Louis, state of Missouri, against Joseph Nolte, now deceased, for the sum of $1,679.60 as appears by the certified transcript of the proceedings in said cause herewith filed and marked “Exhibit A;” that execution issued thereon against the property of the said Joseph Nolte, directed to the sheriff of said city and state, which said execution has been returned by the said sheriff wholly unsatisfied; and said judgment is wholly unpaid and unsatisfied and the whole thereof, with interest from said fifteenth day of March, 1892, is still due plaintiff from the said Joseph Nolte, deceased.

Plaintiff further states that said deceased, Joseph Nolte, with a view and with the intent to hinder, delay and defraud his creditors, and among others this plaintiff, did on the twenty-third day of October, 1883, execute a certain conveyance of that date, in which the defendant, Anna Nolte, his wife, joined and relinquished her dower, whereby he assigned to one John 0. Grmeiner, now deceased, certain property situated in the city of St. Louis and state of Missouri and described as follows, to wit: A tract of land in United States survey 1913 (here follows a description of the land by metes and bounds), containing twenty-one and thirty-nine hundredths acres, which said conveyance is recorded in book 714 at page 394; that upon the execution and delivery of said deed no possession was ever taken of said property by the said Q-meiner but that on the same day and date and immediately thereafter the said Joseph Nolte, deceased, caused another conveyance of said above described property to be made by the said Grmeiner to himself, said Joseph Nolte, and the defendant Anna Nolte, which said conveyance is of record in the recorder’s office of the city of St. Louis, Missouri, in book 709, at page 523; that the said Joseph Nolte, deceased, had and retained possession of said property and that the said Grmeiner never in any manner took possession of the same or entered thereon.

Plaintiff states that in truth no consideration passed from the said Grmeiner to said Joseph Nolte, deceased, and Anna Nolte his wife, one of these defendants, nor did any consideration pass from the said deceased Joseph Nolte and Anna Nolte, one of these defendants,- to the said Grmeiner ■ in the subsequent reconveyance to them aforesaid, but that both of said conveyances were voluntary ones and without consideration, and made, as above stated, for the purpose of hindering, delaying and defrauding the creditors of said Joseph Nolte, deceased, of which purpose the said Anna Nolte, defendant herein, was fully cognizant at the time such conveyance was made.

Plaintiff further states that said Johanna M. Werkmann, one of the said defendants, is the sole heir of said John C. Grmeiner and that said defendant John J. Werkmann is her husband; that the said Joseph Nolte departed this life on the twenty-first day of June, 1892, and that said defendant Anna Nolte is his widow and sole legatee under his will duly probated in the probate court of said city and state on the twenty-fifth day of June, 1892, and recorded in book Y, at page 665, and that she was, in pursuance of said will, on said date, appointed the executrix of the estate of the said Joseph Nolte, deceased, without bond; that defendant Nicholas Nolte and Joseph Nolte are the surviving children and only heirs of the said Joseph Nolte, deceased.

Plaintiff further states that on the eleventh day of . July, 1892, the said defendant, Anna Nolte, as executrix, filed in the said probate court an inventory and appraisement of the entire and complete estate of the said Joseph Nolte, deceased, and that the same was duly appraised at the sum of $169.55 and that the same is exempt from liability for the debts of the deceased. Plaintiff states that said Joseph Nolte, deceased, left no other property out of which the judgment and execution aforesaid can be satisfied in whole or in part, and that unless the property so fraudulently assigned to defendant, Anna Nolte, can be reached and applied' to the payment of the said judgment the same must remain wholly unpaid.

Wherefore plaintiff prays for a decree that both of the said conveyances aforesaid be adjudged fraudulent and void as against plaintiff; that the same be set aside and for naught held; that the property therein mentioned be ordered to be sold for the satisfaction of said judgment of plaintiff, and that defendants be in the meantime enjoined and restrained from disposing of said property or paying out any of the proceeds thereof, or in anywise interfering therewith, and for such other and further relief as to the court shall seem meet and just.

All the defendants, except Johanna and John J. Werkmann, were duly served with process. Those served filed an answer containing a general denial of the averments of the petition.

Joseph Nolte and his wife Anna, Herman immigrants, landed in New York in the month of May, 1868; his sister, Mrs. Anna Sieler, sent him the money to enable them and his brother Henry to reach St. Louis. He commenced life here as a driver; finally about 1878 he drifted into the business of truck farming, or gardening; about August 15, 1878, Joseph Nolte hired Edward Hoffman, the plaintiff, then a boy, as a farm hand, who continued in his employ until August 15, 1886. About October 1, 1879; Joseph Nolte bought the Carondelet farm for $2,400, taking a deed in the joint names of himself and wife, and gave a deed of trust on the property on the same day for $1,000. He collected the proceeds of the business, hired the employees; briefly, it was Ms business in all respects, Ms wife attending to the household duties. October 17, 1881, he paid off the deed of trust for $1,000, and August 18, 1883, he sold the Carondelet farm for $3,050 cash. September 22, 1883, he bought the Natural Bridge road property, described in the petition, taking the deed in his name, the consideration being $6,417; he paid $3,417 cash and assumed a deed of trust for $3,000 on this and other property. On October 23, 1883, Joseph Nolte and his1 wife Anna, one of the defendants, transferred the property described in the petition to John C. G-meiner for a purported consideration of $6,417, which was recorded on the same day at 1:08 p. m. On the same day, October 23, 1883, G-meiner conveyed the property to Joseph Nolte and Anna Nolte, his wife, for a pretended consideration of $6,417, they to assume a certain deed of trust. June 10, 1890, the deed of trust for $3,000 on the property described in the petition was released of record. At the time of his purchase of the property in question he stated that he had enough money to pay the deed of trust and that he had his money at the Christian Brothers. It appears that he had money on deposit there at various times and in various amounts from 1878 to 1884.

Judge Alexander Davis, a neighbor of Nolte’s, testified that about the time that Nolte acquired the property in question, shortly after, he had litigation about a windmill and he said “it was giving him a great deal of trouble, and that the property was not his now, or was not going to be his.” He also had lawsuits in the criminal court.

Conrad Oxman, a gardener who knew Nolte for sixteen years, testified that about the time of the transfer by Nolte to his wife Nolte told him that “he was -turning everything over to his wife; ** * * that there might come trouble some time.”

John Brugge, a neighbor, who knew Nolte for fifteen years, testified that about the time he bought the property in question he said “that he gave it over to his wife on account of, if he had' any trouble that he did not have nothing, that he fix it all right. * * * It was about the time he got a lawsuit with the lightning rod company; at the time he conveyed the property he had about five lawsuits.”

Anna C. Nolte, defendant, had given her deposition in the case January 16, 1893, which was read in evidence, and is as follows: “I bought the property in question, I paid for the place $6,300; I got that money in the old country, where I worked for it; I first bought a place for $2,400 in Carondelet, I paid for it; we sold it and got $3,000, and we used that to buy the present place, the balance is still due on it; in 1883 or 1884, when I bought the property, my husband had no means, except that money; that was money I earned in the old country; I brought $2,400 from the old country, the amount the land cost; we did not pay all cash for the property, we paid $1,000 and the balance I could not get; I had misplaced it and could not find it, I found the money again, I do not remember how long after I purchased the property that I found it; I do not have to tell what part of the house I found the money; I do not know; I do not think I paid over the money as soon as I found it; I had borrowed the money for a year; I had the money from the man without security or a deed of trust for the balance; don’t remember the name of the man from whom I borrowed the money without security; it was not the party from whom I bought the property; we bought the Carondelet land together; I paid for it, it was my money. Owe $3,000 on property in question, all the money that was paid was the $3,000 I got for the other place; in 1883, and before, my husband did not make very much money; I don’t know whether he had any money on deposit anywhere or not ■ at that time. My husband had the deed to the property in question reioritten in order to give me half the property; the taxes were always paid with my money; the property was on the assessor’s books in my name until within the last few months, and the tax bills were made out .solely in my name; I can not recollect whether Gmeiner paid me anything for the property.”

Nicholas Nolte, defendant, deposition as follows: ■“When the property in question was bought I was twenty years old; I run the farm at Carondelet; my father ■did not have very much to do with it; he did not live there, mother ran the Natural Bridge road farm; all ■father had was two head of horses; it is a fact that I ■testified to before in the case that father looked after ■the business, and mother the household, that was the ■way of it; I guess I did testify before that father owned everything on the place; I don’t know how it was on vthe Natural Bridge road; father bought the Carondelet ■property in 1879, I run the place and was then sixteen years old.”

August Gehner testified that the deeds from Nolte •to Gmeiner, and Gmeiner to Nolte and wife, to the property in question, sought to be set aside in this .action, were without consideration and made by Nolte in order to get the title into the joint names of himself ■and wife.

The plaintiff brought suit against Joseph Nolte, July 17, 1891, for services rendered from August 15, 1878, to August 15, 1886, and March 15, 1892, recov■ered a judgment for $1,679.60. An unsuccessful motion for a new trial was made, execution issued, and returned ■nulla bona. An affidavit for an appeal was filed by him -June 4, 1892, but no appeal bond was given.

Nolte made his will June 11,1892, whereby he devised allhis estate to his widow. He died about June 21, 1892. His widow qualified as executrix, and the inventory filed by her shows property appraised at the sum of $169.55. This she afterwards secured under an order pf no process by the probate court. The property in question is now valued at about $32,300. ■

The statute against fraudulent conveyances, section 5170, Revised Statutes, 1889, declares void as against creditors, both prior and subsequent, every conveyance made or contrived with the intent to hinder, delay or defraud creditors of their lawful actions, damages, forfeitures, debts or demands.

The plaintiff in this case was a boy when he went to work for Joseph Nolte, on the fifteenth of August, 1878. He continued to labor for Joseph Nolte without interruption until August 15, 1886. He received nothing for his labor, save his board and lodging' during all that time, and was compelled to sue for his wages. By the verdict of a jury and the judgment of the circuit, court of St. Louis the justice of his claim has become-unalterably settled. It remains to be seen whether the-courts can afford him satisfaction of his judgment.

By his judgment it was affirmatively established that he was a creditor of Joseph Nolte for services rendered from August 15, 1878, to October 1, 1879, when Nolte first acquired title to the Carondelet farm, which, was jointly conveyed to him and his wife.

That his farm was purchased by Nolte out of his-' own earnings admits of little doubt ^ but if any doubt existed, the testimony of Mrs. Nolte dispels it. Her attempt to claim that she brought $2,400 with her from Germany is utterly discredited and confuted by the-testimony. No court is called upon to believe a story so unreason able and so self-contradictory. The evidence-shows that she and her husband were German immigrants; that, when they landed in New York in 1868, his sister, Mrs. Sieler, sent him $25 to enable them to come to St. Lonis. Eor ten years her husband engaged in driving a hack and truck gardening, and finally bought the Carondelet place for $2,400, and could only pay $1,400 down, and gave a deed of trust for $1,000. And yet Mrs. Nolte would have us believe that for ten years she had had in her possession $2,400 she had brought from the old country. When asked why she did not pay the whole purchase price when she had sufficient money on hand, she not only contradicts the record, which shows her husband paid $1,400 down, by saying they only paid $1,000, but she asserts “the balance 1 could not get, I had misplaced it and could not find it. I found the money again. I do not remember how long after I purchased the property that I found it. I do not have to tell what part of the house I found the money. I do not know. I do not think I paid over the money as soon as I found it. I had borrowed the money for a year. I had the money from a man without security, or a deed of trust for the balance. I don’t remember the name of the man from whom I borrowed the money without security.” In short she says she bought the Carondelet farm in 1879 and paid cash for it by borrowing $1,400 of a friend who required no security, and whose name, notwithstanding his extreme kindness and confidence, she can not recall. The record shows this farm was bought October 1, 1879, for $2,400. $1,400 was paid down and $1,000 secured by mortgage on the property.

The evidence further shows that in 1883 Joseph 'Nolte and wife sold and conveyed the Carondelet place for'$3,000. On October 1, 1883, Annie Wise and others conveyed to Joseph Nolte the property in suit for $6,417. When Joseph Nolte acquired this title, the evidence shows that he had sufficient money deposited with the Christian brothers to pay for it. He, however, did not pay the whole purchase price. He paid $3,417 down and gave a deed of trust for $3,000, which he afterward paid. At the time of acquiring the sole title to this land, he was indebted to plaintiff for five years’ wages, for which he afterward recovered judgment.

About this time he became involved in various lawsuits and concluded to have the title conveyed to himself and wife by entireties. John C. Gmeiner was used as a convenient conduit. Nolte and wife conveyed the land to Gmeiner and Gmeiner immediately reconveyed to them. No consideration moved from or to Gmeiner for either deed. Joseph Nolte continued to be the sole apparent owner. By this deed Joseph Nolte intended to secure the whole title to said tract to his wife in case of his death. That it was a purely voluntary conveyance on his part there can be little doubt.

But it is urged that in conveying this estate jointly to his wife, Joseph Nolte was simply placing her where-she would have been, had they not sold the Carondelet property. It is apparent that she furnished no other-consideration for said deed. But the Carondelet property was acquired during coverture and, in the absence-of any pleading or evidence that it, or some portion of it, was purchased with the separate means of Mrs. Nolte, the presumption is that it was purchased with the property of her husband. Patton v. Bragg, 113 Mo. 595; Sloan v. Torry, 78 Mo. 623.

Such has always been the rule of the common law, and the rule continues, though statutes have modified the doctrine that gave the husband absolutely the personal property of his wife in possession, and the right to reduce into his possession and ownership all her choses in action. Seitz v. Mitchell, 94 U. S. 561; Gamber v. Gamber, 18 Pa. St. 363; Walker v. Reamy, 36-Pa. St. 410; Ryder v. Hulse, 24 N. Y. 372; Connors v. Connors, 4 Wis. 112; Edson v. Hayden, 20 Wis. 682; Duncan v. Roselle, 15 Iowa, 501; Cramer v. Reford, 17 N. J. Eq. 367.

It devolved, then, upon Mrs. Nolte to rehut the presumption that the Carondelet property was purchased solely by her husband’s funds.

It is needless to pause at any length to show that the presumption was not rebutted by her most unreasonable, contradictory and unsatisfactory, if not absolutely incredible story.

It follows, then, that as the Carondelet property was Joseph Nolte’s, and its proceeds went into the Natural Bridge property, the deed by him to Grmeiner, and from Gmeiner to his wife, was purely voluntary, and, as to plaintiff, who was a prior creditor, it was presumptively fraudulent in law. Patton v. Bragg, 113 Mo. 601; Jordan v. Buschmeyer, 97 Mo. 94.

We are met at this point with a plea that Joseph Nolte was entirely solvent, and this provision for his wife, made at a time when he was perfectly solvent, is good and valid even against existing creditors.

In Snyder v. Free, 114 [Mo. 360, loc. cit. 369, this court approved the statement extracted from the various decisions by Mr. Bump in his work on Fraudulent Conveyances [3 Ed.], pp. 276 and 277, to this effect: “The burden of proof rests upon the donee to establish the circumstances which will repel the presumption of a fraudulent intent. The conveyance stands condemned as fraudulent unless the facts which may give it validity are proved by him. If no evi-« dence is given to show that the donor had ample means to meet his liabilities, then the transfer must be deemed void as against creditors. ’ ’

In Walsh v. Ketchum, 84 Mo. 427, the prior cases in this state were reviewed and the rule announced in Patten v. Casey, 57 Mo. 118, was approved to this effect: “That a voluntary conveyance made by a debtor in embarrassment or doubtful circumstances, without ample means outside of the particular property conveyed, for the satisfaction of his then existing debts, though made without any specific intent to defraud, is fraudulent in law as to all who were creditors at the time of the execution of the conveyance.”

In Walsh v. Ketchum it appeared that Ketchum was neither in embarrassed or doubtful circumstances, but was perfectly solvent; that he was worth $50,000 over his debts and he had conveyed a piece of property worth $7,000 on which was an incumbrance of $4,000, in trust for his wife. It was held that this conveyance was not fraudulent.

In this case Joseph Nolte conveyed to his wife by this deed an estate by the entirety in the only visible property he had in the world. When he died no administration was had on his estate, because the inventory only amounted to $169.55, and this his widow received. The money he had at the Christian Brothers was inaccessible. It was not deposited in any of the banking institutions of the city and no creditor would have thought of' finding money on deposit in a church school. The preponderance of evidence, however, tends to show this went to the satisfaction of the $3,000 deed of trust. If not, no sufficient explanation is given of it.

But it is now said that his interest in the land in suit was vendible after the estate by the entireties was created; and so it was. Hall v. Stephens, 65 Mo. 670. But plaintiff obtained his judgment March 15, 1892. Motions for new trial and in arrest were filed March 16, and overruled April 18, 1892. Nolte died on June 21, 1892. By his death this valuable property all passed to his widow by the right of survivorship and, as was said by Lord Hardwicke in Stileman v. Ashdown, 2 Atkyns, 477-480, “unless we let the plaintiff in upon these estates (this land) the plaintiff has no possibility of being, paid.”

The solvency required by an unbroken line of decisions in this state, essential to protect a voluntary gift, “consists not only in the present ability of the debtor to pay his debts, but in such a condition of his means that payment can be enforced by process of law.” Eddy v. Baldwin, 32 Mo. 369; State ex rel. v. Koontz, 83 Mo. 323.

Outside of the specific property conveyed to his wife this record discloses no property belonging to Joseph Nolte, and, considering his age, the mere ■expectancy in this land fell far short- -of that ample provision he was required to make for his debts, before lie could generously donate his estate to his wife. Moreover it ignores the fact that $3,000 was placed in this- land by him after :the deed was made against which plaintiff has a clear equity.

The plaintiff has a judgment for work and labor performed on this tract for Joseph Nolte, the apparent owner, and his wife the defendant herein. Doubtless his work has aided in enhancing its value. The owner gave it away without making any provisions for the laborer. If the conveyance should stand, Joseph Nolte’s widow and sons take an estate worth $30,000 and plaintiff’s judgment is utterly, valueless. By the very act of conveying this property to his wife he rendered his estate incapable of meeting the just demand of plaintiff. His wife became the universal donee of all he had and the result was .inevitable. It necessarily was a fraud on plaintiff. The statute was designed to frustrate schemes of this kind. Snyder v. Free, 114 Mo. 360; Claflin v. Mess, 30 N. J. Eq. 211.

But we need not rest our judgment upon presumptions which, the law indulges to prevent parties placing their property out of the reach of their creditors. There is ample evidence that Joseph Nolte was a litigious man; that he had as many as five lawsuits on his hands at one time and he then confided to his two friends and fellow countrymen, Oxman and Brugge, that he had conveyed it all to his wife so that “if he had any trouble, that he did not have nothing; that he fix it all right.” Brugge says at that time he had a lawsuit with a lightning-rod company. Had about five lawsuits.

This is not a case of conflict in the evidence, in which we would feel disposed to yield to the judgment of the circuit court. The evidence for plaintiff stands practically unimpeached, and we have no hesitancy in pronouncing that it establishes not merely constructive fraud, but a clearly established purpose to convey his property so as to hinder and delay his creditors, and such being the case it is within our jurisdiction to so adjudge it on appeal, notwithstanding the judgment of the circuit court. The judgment of the circuit court is reversed and the cause remanded with directions to enter a decree for plaintiff setting aside said deeds as to plaintiff as prayed in his petition.

Shebwood and Bubgess, JJ., concur.