Ziekel, Appellant, v. Douglass, et al.

Supreme Court of Missouri1885-10

88 Mo. 382

Summary · law.co

Holding. The judgment of the lower court was affirmed, upholding the validity of the deed and rejecting the claim that it was fraudulently conveyed to hinder or delay collection.

Ziekel sought to void a deed dated October 1878, in which Arnot P. Douglass transferred property to his brother James Douglass. The deed was not recorded until January 1879, and creditor judgments against Arnot were not entered until months after the recording. The court examined whether the transfer constituted fraud on creditors. Arnot had transferred the property after using proceeds from a prior homestead sale to purchase the subject property, which he then occupied as a homestead. The court found that a $1,500 homestead exemption protected that portion from creditor claims, and that other debts satisfied by James Douglass in the transaction substantially equaled the value conveyed.

The court noted suspicious circumstances surrounding the transfer but deferred to the trial court's factual findings. Critically, the creditors pursuing the fraud claim were subsequent creditors—those whose debts arose after the deed was made—rather than creditors whose claims existed when the conveyance occurred. The court applied a higher evidentiary standard for fraud claims by subsequent creditors and found the evidence insufficient to establish fraudulent intent.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a deed transferring property between brothers constituted fraud on creditors
Application of homestead exemption rights to creditor claims
Evidentiary standard for fraud claims by subsequent creditors versus existing creditors
Whether suspicious timing and circumstances alone establish fraudulent intent

Procedural posture

The plaintiff appealed from a lower court judgment that upheld the validity of the challenged deed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Sherwood, J.

The object of the plaintiff is to set aside as fraudulent a deed made October 8, 1878, by defendant, Arnot P. Douglass, to his brother and co-defendant, Jas Douglass. This deed was not put to record till January 13, 1879. The judgments upon which, executions were issued under which the property in question was sold, were not rendered until over eight months after the deed was made, and over five months after the deed was recorded. It does not appear in evidence when the-debts on which these judgments were rendered were contracted. It wotdd seem that there were no debts at the time the deed sought to be set aside was made, save the debt due to James Douglass, his brother, and those for which he was responsible as security. These sums amounted to as much as the consideration mentioned in the deed, and a little more. Thus : $1,700, Evans note and interest; the Rehard note, $660.00; Pollard debt for $270.00, and interest; $70.00 paid on Shaffer, which was assumed, and another note for about four hundred dollars, making in all some $3,100.00.

In addition .to that, evidence was offered without objection that Arnot P. Douglass had a homestead in the land he first owned, the deed to which was filed in 1872, and that he sold this place and applied the proceeds to-the purchase of the “Polo place,” which he afterwards occupied as a homestead, and which place he subsequently conveyed, as aforesaid, to his brother, James Douglass. Some of the authorities hold that a homestead right must be specially pleaded. Others hold that under the general issue, as pleaded in the case at bar, you may show a right to a homestead. As no objection was made to the introduction of evidence of the character mentioned, any formal plea of homestead, even if one were necessary, may be considered as waived. Looking at the matter in this light the creditors whose claims are the foundation of the present suit, were, not interested in the homestead or its proceeds so far as concerns the fifteen hundred dollars, for that amount was beyond their reach, and this sum deducted from the amount paid and assumed by James-Douglass for his brother would leave but sixteen hundred dollars, as to which his creditors could lay any claim, and this sum would be covered by other debts paid by James Douglass, leaving out of consideration •the Evans note and interest, as to which, the chief objection is ijrged.

It must be conceded that there are some circumstances in this case not free from grave suspicion, but ■deferring, as we must, to some extent, to the trial court, as has been our wont ( Ryan v. Gilliam, 75 Mo. 132), qnd looking to the fact, that so far as this record discloses the creditors under whose judgments plaintiff bought, were subsequent creditors, as. to whose claims stronger evidence is required as to fraudulent iuteut on the part of the debtor than when the debtor is in bankrupt circumstances, and the creditors are existing creditors at the time the conveyance charged to be-fraudulent is made. The judgment of the lower court, in consideration of the foregoing facts and considerations, should be affirmed.

All concur.