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Muenks v. Bunch et al., Appellants

Supreme Court of Missouri1886-10
90 Mo. 500

Summary

Holding. The judgment is reversed and the bill is dismissed for failure of proof, as the plaintiff failed to prove the deeds were made in fraud and the circumstances showed the conveyance was supported by adequate consideration and made in good faith.

George Bunch conveyed eighty acres of land to his two sons, James and William, in 1876 when he was elderly, infirm, and unable to work. The property was mortgaged, and the sons agreed to pay off the mortgage debt and support their parents for life in exchange for the conveyance. The sons subsequently transferred the property between themselves and eventually sold it to Drury Smith. After George Bunch's death, a creditor with an unsecured claim against his estate sought to set aside the deeds as fraudulent and subject the property to payment of the debt.

The court found that the initial conveyance to the sons was supported by valuable consideration—the payment of the mortgage and the sons' obligation to support their elderly parents. The circumstances of the transaction were consistent with good faith rather than fraud. The court rejected the creditor's arguments that the deeds should be treated as mortgages, that creditors held a vendor's lien, or that a trust arose in their favor, finding that the petition failed to allege facts supporting such alternative theories of relief. Additionally, the court noted that the property constituted the homestead of George Bunch and therefore could not have been sold to satisfy unsecured debts against his estate.

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

Key issues

  • Whether a conveyance by a debtor to his sons for assumption of mortgage debt and parental support constitutes fraud on creditors
  • Whether homestead property can be subjected to unsecured creditor claims
  • Whether a petition for relief based on fraud must allege specific facts establishing fraud or may rest on general allegations

Procedural posture

The plaintiff brought suit to set aside deeds executed by George Bunch and his sons and to subject the property to payment of the plaintiff's creditor claims against Bunch's estate, which were allowed by the probate court.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Blaok, J. —

George Bunch, being the owner of the eighty acres of land here in question, conveyed the same to his sons, James and William Bunch, by deed, dated November 17, 1876. In 1879, William conveyed to James, who re-conveyed to William, and in 1880, the latter sold and conveyed the land to the defendant, Drury Smith, George Bunch died in 1878, indebted to the plaintiff and others on demands existing at the date of the deed to the sons. These demands were allowed by the probate court against the estate of Bnnch, and the plaintiff now prosecutes this suit to set aside the deeds before mentioned and to subject the property to the payment of his demands, which amount to three or four hundred dollars. The petition alleges that the deed to the sons was without consideration, and further, that that deed and the other deeds between the sons were to defraud the creditors of George Bunch, and that the defendant, Smith, had notice and knowledge of that fraud when he purchased the property.

The evidence shows that when George Bunch made the deed to the sons he was old, infirm and unable to work. He and his wife and son, William, who was tinder the age of twenty-one, resided upon the land. The property was encumbered by a mortgage, payment of which was being pressed and he was unable to pay it in whole or in part. The father proposed to convey the land to the sons if they would pay the mortgage debt, and keep the old folks the remainder of their lives, and the deed was executed upon that verbal agreement. James, who was then married and living to himself, moved to the land in question and at once paid the interest on the mortgage, and in time the two boys liquidated the debt, at the same time giving the father and mother a support. The land was worth twelve or fourteen hundred dollars. The amount of the mortgage is not given. It must have been in excess of four hundred dollars. William became indebted to the defendant, Smith, and sold the land to him for seventeen hundred dollars. The widow of George Bunch preferred to live with her son, George, and William gave her seven hundred dollars of the money received from Smith. There can be no doubt that the deed to the boys was made upon sufficient consideration. The party who seeks relief upon the ground of fraud must prove it. Fraud may be gathered from the circumstances attending the transaction and often times they furnish the most convincing proof of fraud. But here the circumstances are all consistent with good faith. The arrangement was such as the father had a right to make and one which his necessities demanded. The payment of the seven hundred dollars by William to his mother would at first indicate some previous secret trust, but it is to be remembered that he was then under an obligation to give her a support, and as she desired to go, and did go, to live with the other son, it was proper for him to pay her the money in lieu of the support. Some of the evidence tends to show that the boys were to pay all the debts of the father, but there is express evidence to the effect that they were to pay only the mortgage. Be that as it may, there is no evidence in the case to justify the decree, even as against the boys. It máy be stated that this property was the homestead of George Bunch, and, as against him, could not have been sold for the payment of the unsecured debts.

It is also urged that the consideration of the sale by the father was the assumption and payment of the unsecured as well as the secured debts, and that the de fendant, Smith, had notice oí all this when he purchased. On this proof it is contended, (1) that the deed should be treated as a mortgage; (2) that the creditors have • a vendor’s lien as for unpaid purchase money; (3) that a trust results to them to the extent of their debts. These questions of fact and law are not before us for determination ; for the petition lays no foundation for relief on any such grounds. The plaintiff may, under the prayer for general relief, have any relief to which he shows himself entitled, and which is also founded upon and consistent with the petition. But there must be facts stated upon which the relief can be based — facts from which, when proved, the relief flows as a legal sequence. Newham Kenton, 79 Mo. 382. The only facts stated in this petition are that the deeds were made in fraud of creditors, and one of them without any consideration. These facts, if proved, lead to a cancellation of the deeds, not an affirmance of them.

The judgment is, therefore, reversed, and the bill dismissed for failure of proof.

All concur, except Sherwood, J., a nt.