Nelson v. Hall

79 S.W. 500, 104 Mo. App. 466, 1904 Mo. App. LEXIS 505
CourtMissouri Court of Appeals
DecidedFebruary 16, 1904
StatusPublished
Cited by1 cases

This text of 79 S.W. 500 (Nelson v. Hall) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nelson v. Hall, 79 S.W. 500, 104 Mo. App. 466, 1904 Mo. App. LEXIS 505 (Mo. Ct. App. 1904).

Opinion

REYBURN, J.

In the early part of the year 1900, appellant Hall, who owned a lumber yard in the city of Granby, while returning therefrom to Monett, where he was then living, encountered on the train his codefendant Conner, with whom he had been acquainted for several years, a carpenter by trade and also a resident of Monett. Hall then stated to Conner that his lumber yard was overstocked with high-priced lumber, and as a measure of relief he must put it in buildings, and he proposed to Conner the' building of some houses at Monett, to, which Conner replied, that he doubted whether they could be made profitable. Soon after this conversation, at instance of Hall, Conner negotiated the purchase of two lots, known as numbers seven and eight, in block number 23, of city of Monett; the purchase was conducted by Conner, the price paid for both, five hundred dollars, of which two hundred dollars were paid in cash, furnished by Hall, and delivered to Glassner, their owner; a warranty deed dated June 19, 1900, was taken from him- to Conner as grantee. Conner in turn executed two deeds of trust of same date, June 20, 1900, to A. Y. Darroch, trustee, each conveying one lot and purporting to secure ten notes of two hundred dollars each, all executed by Conner to order of Hall and payable respectively, one each year after date. Lumber was then shipped from the Granby Lumber yard for houses on both lots, and a dwelling completed on lot number seven, the corner lot; but the lumber piled on the other, the inner lot, number eight, was later disposed of and [469]*469removed. Lot seven and house erected thereon were conveyed by Conner and wife to Mamie Hull by warranty deed, dated April 10, 1901, and a deed of trust taken back, conveying the property to Robert Johnson, as trustee of Hall, securing $1,985, evidenced by forty-four notes’ of forty-five and fifty dollars each, 'the first maturing May 21, 1901, and one due each third month thereafter. All these deeds were duly recorded. In July, 1900, plaintiff Nelson, manager of the Long-Bell Lumber Company, a creditor of Hall, and W. R. Cowley, its attorney, called on Hall, and pressed him for adjustment of an indebtedness to their concern, then exceeding three thousand dollars, upon which Hall at the time paid a small sum on account and closed by notes for the balance at sixty and ninety days, secured by collateral, a part of which later proved valueless, and a part consisting of notes secured by mortgage on lot number eight. This property was in plain view from Hall’s residence, where the parties were gathered, and from which Hall pointed it out and described the lot conveyed as located on the corner of the second block north and on opposite side of the street. The representatives of the creditor lumber corporation, inspected the property and apparently satisfied, accepted Hall’s notes above described, including those secured by mortgage on lot eight. The notes received for the balance of the debt were not met, and in October, following, Nelson again waited on Hall, found another creditor’s representative also pressing Hall, and a settlement on behalf of all Hall’s creditors was discussed and later a meeting of his creditors was held, a statement of his assets prepared by him, submitted to them and a trust deed made respondent Nelson, conveying the remaining stock at the lumber yard, sundry accounts, .and certain notes, including the notes executed by Conner and secured by his deed of trust on lot number eight; the conveyance being in trust to Nelson as trustee for creditors of Hall, enumerated, with power in the trustee to reduce the [470]*470trust property to cash, distribute its -proceeds pro rata among the creditors listed, the grantor agreeing to pay them the balance of their respective debts, if any then remained unpaid, within five years from the date of the trust instrument. Throughout the negotiations with Hall by Nelson and other representatives of his creditors, the false impression was created, encouraged and tolerated that among the securities conveyed were the notes secured upon the corner lot with dwelling thereon, or to be built thereon; it was charged by the respondents, and the proof tended to establish, that Hall, as an inducement and consideration to the creditors to accept the trust agreement, fraudulently represented that the mortgage notes delivered were secured upon lot numbered seven upon which the dwelling had been 'or was to be erected, and not upon lot numbered eight which remained unimproved, but which was discovered to be the lot described in the deed of trust securing the notes delivered to the trustee of the creditors; whether any intention ever existed to improve also lot eight was controverted and doubtful.

This action was in nature of an equitable proceeding on behalf of the trustee in the deed of trust for the benefit of Hall’s creditors, against the latter, his wife, Conner, Mamie Hull, the purchaser from Conner of lot seven, her husband, Robert Johnston, trustee in the mortgage, and another party (essential to be joined at inception of action but later no longer a necessary party)' as defendants. The bill was voluminous and described at length the various transactions briefly summarized above, charged a fraudulent conspiracy between Hall, his wife and Conner to defraud. creditors of the first named, averred fraudulent representations by Hall and Conner, that the notes tendered and later delivered to the trustee, respondent Nelson, were secured by first mortgage upon the unimproved lot (number eight), in lieu of upon the improved lot; that after the fraudulent substitution of the notes secured by [471]*471lot eight, Hall sold and caused to be conveyed lot seven with dwelling to the defendants Mamie and O. S. Hull, for a consideration expressed of twenty-five hundred dollars, but paid by notes for two thousand dollars in all, the amounts and maturities of which were described and secured by deed of trust.to' Robert, Johnston, as trustee of Hall, and prayed judgment that 'the Conner notes held by respondent be declared a first lien on lot seven, for appointment of a receiver, for injunctive and general equitable relief. Defendant Hall, interposed for his defense, an answer containing a general denial, and admitting the execution of the trust deed which was embodied in full; and averring that respondent as trustee had proceeded to administer the trust therein created, but charged mismanagement in particulars detailed, and specifically averred that there was no equity in plaintiff’s bill entitling him to relief, and concluded with prayer for removal of Nelson from the trusteeship, and an accounting by him as trustee.

The answer of Mary M. Hall, wife of the principal defendant, was a general denial. The defendants, Mamie and O. S. Hull, pleaded also a general denial coupled with allegations of payment of part of the notes described by plaintiff. The separate answer of Conner, after a general denial, acknowledged the execution of the notes mentioned in plaintiff’s complaint, and their delivery to plaintiff, but averred that the notes were without consideration, the consideration having failed, and that plaintiff was not an innocent purchaser for value, and closed with a prayer for their cancellation. After trial, and prior to decision of the cause, defendant Conner and wife filed an amended answer, admitting the execution of the notes and deed of trust described as conveying lot number eight, and acknowledging their own insolvency.

The testimony introduced by plaintiff, as gathered from the abstracts submitted, consisted of the evidence [472]

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Bluebook (online)
79 S.W. 500, 104 Mo. App. 466, 1904 Mo. App. LEXIS 505, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nelson-v-hall-moctapp-1904.