
    Lillard, Appellant, v. Johnson et al.
    Division One,
    February 15, 1899.
    Fraud: conveyance from father to son: after-acquired title by son. Where a father, entirely solvent, transfers his stock and other personal property to his son in payment for four years’ work, and afterwards in order to defeat his creditors conveys his farm to his wife and then he and his wife conveyed the same to his partner, to whom he owed $300, and the son for the next two years rented the farm from the partner, and when he had paid the partner $300 as rent the partner conveyed it to the son without his knowledge, and put the deed of record hut did not deliver it to him, hut before this, a bank had obtained judgment against the father, sold and bought his interest in the land at execution sale, and then brought suit to set aside the father’s sale of the stock to the son, made (at that time) eight years before, and the son, in accordance with an agreed settlement of the suit, sold the stock and with the money paid the father’s judgment debt, and the bank conveyed to him the farm (six months before the father’s partner had made the deed to the son), it will be held, in a suit by a purchaser under the junior judgment against the father, to set aside the bank’s deed to the son, that the son, knowing nothing of his fraudulent intentions or declarations, and having rendered value for the stock obtained from his father, and paid a valuable consideration for the bank’s debt, held a good and valid title.
    
      !Appeal from Vernon Circuit Court.- — HoN. D. P. Strattou, Judge.
    ArNIRMED.
    M. T. JaNuaey for appellant.
    (1) If land be bought with the money of one and the title is taken in the name of another in fraud of the creditors of the first, a trust results which is the subject of sale on execution. (2) The fact that all the personal property and stock was assessed against Josiah’s father up until the time the father undertook to cheat his creditors, shows that Josiah did not claim to be the owner of the property. (3) Josiah recognized his father as the owner of the stock when he agreed that that stock might be sold to pay his father’s debt. (4) His payment of rent to Gorse showed that he knew of the fraudulent transfer of the land by his father.
    S. A. Wight, J. B. JOHNSON and H. H. BlaNTON for respondents.
    (1) The sale of the stock and personal property to Josiah by his father was a tona fide transaction, for value, and hence Josiah became the actual owner thereof. (2) The sale was made four years before the transfer by his father of the farm, at a time when the father was entirely solvent. (3) The execution in favor of the Union National Bank was a prior lien to the execution'in favor of the Citizens Bank. (4) If Josiah was the owner of the stock, he acquired whatever title the TJnion National Bank had obtained at the sheriff’s sale. That title was superior to the defendant’s subsequently-acquired interest at the execution sale under the judgment in favor of the Citizens Bank. (5) Josiah never did claim under Gorse, never knew that he had made a debt to him, did not know of his father’s declarations to transfer his property to cheat his creditors, and is not chargeable therewith.
   MABSHALL, J.

Bill in equity to set aside conveyances of real estate, declare a resulting trust, and divest title.

Stated in the order of their sequence the facts in this case are these: John Johnson was a prosperous farmer in Yernon county. He had several sons, and after each attained his majority, he worked for his father for several years, and the father then started them in business for themselves. About 1873 he gave his son "William a farm, worth from eight hundred to a thousand dollars. He gave his son J. D. Johnson some cattle and corn. Defendant Josiah became of age in 1883, and stayed on the place working for his father until March, 1887, when his father transferred to him some horses, mules, cows, hogs, wagons and farming implements, worth from eight hundred to a thousand dollars, in payment of what he owed him for his services;-he sold the other stock on the place and rented the farm of 280 acres to Josiah for $300 a year. He then moved to the town of Clayton, and engaged in buying and selling stock, and later went into the saloon business. In 1888 A. G. White was elected sheriff of Yernon county, for a term beginning January 1st, 1889, and John Johnson became one of the sureties on his official bond. White was re-elected in 1890, and John Johnson again became one of his ten sureties. In March, 1891, John Johnson conveyed the farm to his wife, previously stating that he believed White, the bank and the country generally was going to default. On the 9th of July, 1891, the Citizens Bank of Nevada made an assignment for the benefit of its creditors, and it was then ascertained that White was financially ruined. On the 21st of July, 1891, Johnson and wife conveyed the farm to his partner, John Gorse. Johnson owed Gorse some three hundred dollars, but there was no arrangement between them that the conveyance was to be a security for the debt. Josiah, the defendant, rented the farm from Gorse for the years 1892 and 1893, and paid him the three hundred dollars rent for 1892, which Gorse applied on the father’s debt to him. The Union National Bank of Kansas City obtained judgment against John Johnson and John Vetters on-May 6th, 1892, on a note for $1,100 made by them, and on or about the same day the assignee of the Citizens Bank of Nevada obtained judgment against John Johnson on his note for $300. An execution was issued on the judgment in favor of the Union National Bank, and the Johnson farm and that of Vetters were sold and bought in on the 13th of December, 1892, by Neal, the vice-president of the bank and by him conveyed to the bank. What was left of the personal property transferred by John Johnson to his son Josiah in 1887, and what Josiah had accumulated in the meantime, was also levied on. Josiah claimed the property. The bank then instituted a suit in equity against John and Josiah, returnable to the May term, 1893, to have the sale of the personal property from John to Josiah set aside, and to subject the property to the payment of the bank’s claim. On the 24th of June, 1893, Gorse conveyed the farm to Josiah but it was done wholly without Josiah’s knowledge or consent, and the deed, though recorded, was never delivered to him. During the taking of depositions in the case against John and Josiah to have the sale of the personal property set aside, an agreement was made between Josiah’s attorney and the attorney for the bank, each having-authority from his client, that Josiah should sell the stock and pay the judgment of the bank, and that the bank would convey the Johnson farm and the Vetters farm to Josiah. Accordingly Josiah sold the stock, paid the bank, and the bank couTejed tbe property to him on September 30th, 1893, and Josiah transferred the Yetters farm to him. Subsequently an execution was issued on the judgment in favor of the Citizens Bank of Nevada, and the Johnson farm was levied on and sold on the 15th of Eebruary, 1895, the assignee becoming the purchaser for $25, and afterwards at the assignee’s sale of the property of the assigned estate, the plaintiff bought the Johnson farm for $25. Thereupon this suit in equity was begun, against John, Josiah and Gorse, praying to have the deeds from John Johnson and wife to Gorse and from Gorse to Josiah Johnson set aside, and that Josiah be declared a trustee, with a resulting trust in John, and that the right, title and interest of both be divested out of them and vested in plaintiff. The answer of Josiah disclaimed title under the deed from Gorse and claimed title under the deed from the Union National Bank.

The trial in the circuit court resulted in a decree for defendant, Josiah Johnson, and after proper steps, the case was appealed to this court.

I.

If the transfer of the personal property, in March, 1887, from John Johnson to his son Josiah, was bona fide, in payment of four years’ services of the son, after he attained his majority, the title of Josiah to the land in controversy is indefeasible; otherwise it is fraudulent.

No claim is made that there was any legal impediment in the way of a valid transfer of his property by John Johnson, in March, 1887. He did not become surety on White’s bond until January, 1889, and there is nothing in the record to show that any liability attached as surety on that bond during White’s first term. His second term began January 1st, 1891, and although there is evidence that when the Citizens’ bank failed in July, 1891, White was in trouble, it does not appear that Johnson or the other sureties were called on to respond to tbeir liabilities as suck bondsmen. It does not appear wben the $1,100 note beld by the Union. National Bank of Kansas Gity was given, or wben tbe $300 note to tbe Citizens Bank of Nevada was executed. ■

Tbe plaintiffs principal reliance is upon tbe fact tbat some time (tbe exact date is not stated) prior to March, 1891, John Johnson told Clemens tbat "White, tbe bank and tbe country generally were “going to default;” tbat be stated to other persons tbat tbe other sureties bad covered up tbeir property and be intended doing the same thing; tbat be conveyed tbe farm to bis wife in March, 1891; tbat twelve days after tbe bank failed be and bis wife conveyed tbe farm to his partner, Gorse; tbat be told Bond be bad to sell bis stock to pay tbe Union National Bank; tbat tbe assessments for taxation for tbe year 1888, showed be owned $2,570 worth of personal property, while Josiab only owned $50 worth, and for 1889 be owned $940 worth, while Josiab only owned $80, and for 1890, be owned $1,021 worth, while Josiab only owned $78, while for 1891 be only owned $113, while Josiab owned $1,033 worth; tbat on tbe trial of tbe case John admitted tbat be put tbe farm, first, in bis wife’s name, second, in Gorse’s name, and lastly in Josiab’s name in order to defeat tbe collection of bis creditor’s claims; and tbat on June 24th, 1893, Gorse conveyed tbe farm to Josiab.

As against this showing on tbe part of tbe plaintiff, it was proved by tbe defendant, tbat John was perfectly solvent in 1887, and tbat be transferred the stock and other personal property to Josiab, as payment for about four years’ work after be became of age, just as be bad previously made provision of about tbe same value for his older sons, William and John D.; tbat about tbe time of tbe transfer be rented tbe farm to Josiab, moved into tbe town of Clayton and engaged in business and never lived on tbe farm afterwards, but tbat Josiab remained there, controlled tbe business, bought and sold these and other cattle, kept a separate bank account from at least as early as July, 1890, and prospered as a farmer and stock dealer; that Josiah never knew that Gorse had conveyed the farm to him,until during the proceedings in the suit by the Union National Bank against him to set aside the transfer of the personal property to him, and never had the deed or claimed under it, in fact laid no claim to the real estate until he purchased it from the Union National Bank; that the real estate was sold under the Union National Bank’s execution on December 13th, 1892, and the conveyance from Gorse to Josiah was not made until June 24th, 1893; that the statements of John Johnson about covering up his property were not made in the presence or hearing or to the knowledge of Josiah; that Josiah made the arrangement to pay the judgment of the Union National Bank against his father and sold his stock and paid the $1,100 in order to get rid of the litigation and because he would thereby get a good title- to the farm from the Union National Bank, and that the farm was worth more than the $1,100 he so paid the bank and the $1,200 mortgage that encumbered it, and hence there would be a profit to him, and he would not be injuring his father, who had already lost title to the farm by the sale to the bank; that he did not make return for. the personal property for the years 1888, ,1889 and 1890, because his father had done so before the assessor came to see him, and he did not think it made any -difference in whose name the taxes were assessed as long as they were paid.

The transfer of the personal property by John to Josiah in March, 1887, was established by the positive, direct and un-impeached testimony of John Johnson, Josiah Johnson, and his brothers "William, John D. and Charles, and also by the testimony 'of John Yetters, who owned and lived on the adjoining farm. The only countervailing testimony, if it can be called such, is that of M. S. Bond, who said that he and everybody thought the personal property on the farm belonged to John until the bank failed.

Tbe father and all tbe sons were ably examined by plaintiff’s counsel, and tbe testimony of tbe sons appears to be candid, straightforward and explicit and reads like it was truthful. Tbe circumstances surrounding tbe original transfer are convincing that tbe transfer was bona fide, and as John was not in debt or contemplating going into debt at tbe time, that transfer was lawful. It was made over four years before tbe bank failed and about eight years before plaintiff acquired any right to question tbe transfer. Tbe only circumstance that in anywise casts even a suspicion on tbe transfer of tbe personal property to Josiah, is tbe fact that the father was assessed for a large amount of personal property in 1888, 1889 and 1890, and tbe son was assessed for a small amount for those years, while for 1891 tbe son was assessed for a large amount, and tbe father was assessed for a small amount. This circumstance would be entitled to more weight were it not for tbe fact that tbe taxes for tbe year 1891 were assessed prior to July 9th, 1891, tbe day on which tbe bank failed, and are based upon property owned on tbe first of June, 1890, and on that day there appears no reason why tbe father should desire to cover up bis property from bis creditors, and in fact it does not affirmatively appear that be bad any creditors at that time.

A careful and thorough examination of all tbe evidence taken and preserved in tbe record, with a full consideration of tbe very able brief and argument of plaintiff’s counsel, leads this court to tbe same conclusion, as to tbe transfer of tbe personal property, in 1887, to Josiah, as that reached by tbe learned chancellor who tried tbe case below.

In all of its legal essentials this case falls within tbe rule so ably laid down by Sherwood, J., in Dozier v. Matson, 94 Mo. 328, and following that case, it results that Josiah was tbe owner of tbe personal property, and not being a party to or cognizant of any fraudulent intent on bis father’s part in making tbe several transfers of tbe farm, and not being aware of tbe deed of Gorse to him, and tbe Union National Bank Laving a good legal title to tbe land, be bad a right, when bis title to tbe personal property was assailed by that bank, to compromise and settle that litigation by selling bis personal property, paying tbe $1,100 to tbe bank and acquiring its title to tbe property, and to that formerly owned by John Vet-ters; and that be acquired in this way as good a title to tbe land as tbe Union National Bank bad, and that title was superior to the title acquired by tbe assignee of tbe Citizens Bank of Nevada, on February 15th, 1895, and consequently superior to that acquired from tbe assignee by tbe plaintiff. It also follows that tbe 'circuit court did not err in excluding evidence as to tbe transfer of tbe Vetters property from Josiab to John Vetters, for, as above shown, Josiab acquired a good legal title to that as well as to bis father’s former farm, and hence bad a right to give it to Vetters, if be saw fit to do so.

Tbe decree of tbe circuit court was right and is affirmed.

All concur.  