Opinion
May 26, 1941.
1. — Fraud — Fraudulent Conveyances. General rule is that a mere general creditor without a lien, has no right or interest in his debtor's property as will enable him to maintain an action at law, either ex delicto or ex contractu, against a third person converting the debtor's property with the intention of aiding and assisting him to defraud his creditors.
2. — Judgments — Liens. Under section 1269, Revised Statutes of Missouri, 1939, plaintiff's judgment obtained in circuit court of Jackson county constituted a lien on all real estate which defendants owned in such county at time of rendition of judgment or theretofore transferred by judgment debtor to debtor's son and in name of son at time of rendition thereof, but did not constitute a lien upon any of the other property mentioned in petition which was located outside State of Missouri.
3. — Fraud — Conspiracy. If transfer of realty by debtor to son destroyed or definitely impaired the lien of judgment creditor, creditors are entitled to maintain suit against debtor and son for damages founded upon fraud and conspiracy.
4. — Fraud — Conspiracy — Liens. Under section 3507, Revised Statutes 1939, transfers of realty by debtor to his son to defraud his creditors were clearly void and creditor's judgment remained a lien upon the real estate in name of son, the fraudulent grantee, and located in county where judgment was rendered, and may be enforced by execution notwithstanding the transfers, since transfers did not impair judgment creditor's lien so as to justify suit against debtor and son for damages founded upon fraud and conspiracy.
5. — Conspiracy. A conspiracy cannot be made the subject of a civil action unless something is done which without the conspiracy would give rise to a right of action and to maintain an action for damages something in pursuance of the conspiracy must have been done occasioning injury from which the damages have proximately resulted.
6. — Conspiracy. Where petition alleged plaintiffs recovered a final general judgment for $903.40 against debtor and that debtor and son thereafter entered into a conspiracy to cheat and defraud creditors by fraudulently transferring debtor's property to son and as a result thereof debtor was rendered insolvent and plaintiffs were unable to satisfy their judgment and claimed actual damages in the sum of $903.40 and punitive damages in the sum of $6,000, plaintiffs were not entitled to recover since there was no legal damage alleged in petition or suffered by plaintiffs.
7. — Conspiracy — Fraud. Petition claiming damages founded upon fraud and conspiracy alleging that debtor and son entered into a conspiracy to cheat and defraud creditors of debtor by fraudulently transferring debtor's property to son did not state cause of action under statutes making every person a party to fraudulent conveyance guilty of a misdemeanor, assuming that statute affords a basis for a civil action, since facts alleged in petition did not bring case within the purview thereof.
8. — Conspiracy — Fraud. Contention that suit was maintainable because judgment creditors of debtor would be required to institute many actions in many states to set aside transfers of property to debtors, sum was insufficient to authorize creditor's action for damages founded upon fraud and conspiracy against debtor and son.
Appeal from the Circuit Court of Jackson County. — Hon. Emory H. Wright, Judge.
AFFIRMED.
Virgil Yates and Ayers Blocher for respondents.
(1) Conspiracy is not in itself a ground or cause of action. Conran v. Fenn, 140 S.W. 82; Darrow v. Briggs, 169 S.W. 118; Harrelson v. Tyler, 281 Mo. 385; Seegers v. Marx Haas Clothing Co., 66 115 S.W.2d 526; Wass v. Hammontree, 77 S.W.2d 1006. (2) Appellants' second amended petition states no cause of action for damages against either defendant. Sec. 3507, R.S. Mo. 1939; 67 C.J. 264; 15 C.J. Secundum 1006, Art. 9b; Pullen v. Headberg, 127 P. 954; Enid Security State Bank v. Reger, 151 P. 1170; Blattel v. Stallings, 142 S.W.2d 9; Stroup v. Rauschelbach, 261 S.W. 346; McHale v. Heman, 28 Mo. App. 193; Castorina v. Herrmann, 104 S.W.2d 297. (3) The averments of appellants' second amended petition are not statements of facts but mere conclusions of the pleader, and do not support a cause of action. Thompson v. Farmers Exch. Bank, 62 S.W.2d 803; Seegers v. Marx Haas Clothing Co., 66 S.W.2d 526. (4) The allegations of appellants' second amended petition are, as to vital points, inconsistent with and nullify each other.
J.M. Fisher and John H. Haley for appellants.
(1) Plaintiffs' amended petition alleges the essential elements of an action for damages for conspiracy, because it alleges that defendants entered an agreement whereby and pursuant to which Derby Sharpe transferred all of the property he then owned, and might thereafter acquire, to his son, E.L. Sharpe, to prevent persons who were, or might thereafter become, creditors of Derby Sharpe from collecting their debts by legal process out of the property of Derby Sharpe; that plaintiffs were judgment creditors of Derby Sharpe; that by reason of the performance of said agreement plaintiffs have been and will be unable to satisfy their judgment against Derby Sharpe without the institution and trial of many actions in many states to set aside said transfers of property by Derby Sharpe to E.L. Sharpe. Seegers v. Marx-Haas Clothing Co., 334 Mo. 632, 66 S.W.2d 526; Sec. 4098, R.S. Mo. 1929; Sec. 4490, R.S. Mo. 1939; Findlay v. McAllister, 113 U.S. 104; 5 Sup. Ct. Rep. 401. (2) The judgment rendered against the defendant Derby Sharpe in a former action by plaintiffs to recover the purchase price of securities under the Missouri Securities Act is not a bar to this action to recover damages resulting from an unlawful conspiracy between Derby Sharpe and another to prevent the collection of said judgment for the reasons that they are difference causes of action and are not between the same parties. Citations under Point 1, supra; Chapter 40, R.S. Mo. 1929; Scheurich v. Empire Dist. Elect. Co., 188 S.W. 114.
This is an action for damages founded upon fraud and conspiracy. The court sustained defendants' demurrer to plaintiffs' petition. Plaintiffs refused to plead further and judgment went against them. They have appealed.
The petition alleges that plaintiffs, on April 24, 1939, recovered a general judgment for $903.40 against the defendant, Derby Sharpe, in the Circuit Court of Jackson County, Missouri; that said judgment became final; that on or about the month of November, 1937, said defendant and his son, the defendant, E.L. Sharpe, entered into a conspiracy to cheat, wrong and defraud the creditors of the defendant, Derby Sharpe and, particularly, the plaintiffs herein and, in furtherance of such conspiracy, agreed with each other that all of the property belonging to the said Derby Sharpe, which he had or might acquire, should be placed in the name of the defendant, E.L. Sharpe, for the purpose of making the said Derby Sharpe insolvent and that defendants would claim and pretend that it was the property of E.L. Sharpe, and also for the fraudulent purpose of placing the property beyond the reach of plaintiffs so as to prevent plaintiffs from collecting their judgment out of it; that the property of said Derby Sharpe was ample to pay all of plaintiffs' judgment, "and that by making said fraudulent transfers . . . it would render the defendant, Derby Sharpe, insolvent, and make it impossible for the plaintiffs to satisfy their judgment out of the defendant's, Derby Sharpe, property without filing a number of suits in various states to set aside said fraudulent transfer;" that defendants, in pursuance of said conspiracy, made transfers of property and assets of Derby Sharpe to the defendant, E.L. Sharpe. A list of the purported transfers is set out, which includes personal property and real estate located in Jackson County, Missouri, and in the States of Kansas and Texas. The value of none of this property is stated.
The petition then alleges that the exact dates of said transfers were unknown to the plaintiffs; that as a result of said transfers the said Derby Sharpe has been made wholly insolvent and the plaintiffs are unable to collect the judgment obtained. The petition claims actual damages in the sum of $903.40, for which judgment is prayed, together with interest, and for $6000 punitive damages.
Plaintiffs insist that the court erred in sustaining defendants' demurrer to plaintiffs' petition. In this connection, plaintiffs say that the petition states all of the elements of a cause of action for damages for an unlawful conspiracy and that the facts pleaded show that, by reason of the transfers of the property mentioned in the petition, plaintiffs have been and will be unable to satisfy their judgment against Derby Sharpe "without instituting and trying many actions in many states to set aside said transfers."
"It is a generally recognized rule that a mere general creditor, without a lien, has no such right or interest in his debtor's property as will enable him to maintain an action at law, either ex delicto or ex contractu, against a third person converting the debtor's property with the intention of aiding and assisting him to defraud his creditors. . . . The rules stated, however, do not hold in the case of a creditor who has obtained a lien." [See, also 11 Am. Juris., pp. 582, 583; 12 C.J., pp. 587, 588; 15 C.J.S., p. 1006; Fernandez v. LaMothe, 147 Mo. App. 644; Lamb v. Stone, 11 Pickering, 527; Wellington v. Small, 3 Cushing, 145; Austin v. Barrows, 41 Conn. 287; Field v. Siegel, 47 L.R.A. 433 (Wisc.); Gardner v. Ex. of Sherrod, 9 N.C. 173; Adler v. Fenton, 24 Howard, 407; Adams v. Paige, 7 Pick. 542; Sawyer v. Wieser, 84 S.W. 1101; Tasker v. Moss, 82 Ind. 62; Hurwitz v. Hurwitz, 31 N.Y.S. 25, 26, 27; Annotation to Schwenn v. Schwenn, 2 A.L.R. 287.]
Plaintiffs' judgment constituted a lien on all of the real estate which defendants owned in Jackson County at the time of its rendition (Sec. 1269, R.S. 1939), but it did not constitute a lien upon any of the other property mentioned in the petition. [Sec. 1343, R.S. 1939; Adler v. Fenton, supra, l.c. 411; Hurwitz v. Hurwitz, supra.]
There is no question but that, if the action of the defendants destroyed or definitely impaired the lien of plaintiffs' judgment, they are entitled to maintain this suit. [Adler v. Fenton, supra; Hurwitz v. Hurwitz, supra; Tasker v. Moss, supra, l.c. 65; Adams v. Paige, supra; Lamb v. Stone, supra, l.c. 536, 537; Sawyer v. Wieser, supra; Fullen v. Headberg, 127 P. 954, 955, 956 (Colo.).] But such is not the case. Under the provisions of Section 3507, Revised Statutes 1939, the transfers were "clearly and utterly void," and the judgment remained a lien upon the real estate in Jackson County in the hands of E.L. Sharpe, the fraudulent grantee, and may be enforced by execution notwithstanding the transfers. [Loinberger v. Baker, 88 Mo. 47; Slattery v. Jones, 96 Mo. 216; Woodard v. Mastin, 106 Mo. 324; Castorina v. Herrmann, 104 S.W.2d 297.]
We find that the petition alleges that the real estate located in Jackson County had been sold by the defendant, E.L. Sharpe, and the money from the sale placed in the bank in his name. However, there is no allegation that the purchaser from said Sharpe was without notice. [Lionberger v. Baker, supra.]
A conspiracy cannot be made the subject of a civil action unless something is done, which, without the conspiracy, would give rise to a right of action. To maintain an action for damages something in pursuance of the conspiracy must have been done, occasioning injury from which the damages have proximately resulted. [Bitzer v. Washburn, 121 Iowa 462, 466; Field v. Siegel, supra, l.c. 440; Kimball v. Herman et al., 34 Md. 407; Wellington v. Small, supra, l.c. 150; Austin v. Barrows, supra, l.c. 300; 12 C.J., p. 586; Conran v. Fenn, 159 Mo. App. 664; Darrow v. Briggs, 261 Mo. 244; Seegers v. Marx et al., 334 Mo. 632.]
Plaintiffs, in their brief, admit that they must have been damaged by the alleged unlawful agreement and the acts done in pursuance thereof, or they are not entitled to recover. However, there was no legal damage suffered, if any, insofar as is claimed in the petition.
We have examined the cases cited by the plaintiffs and find them not in point. In Findley v. McAllister, 113 U.S. 104, the judgment was rendered worthless as a result of the conspiracy involved in that case.
Plaintiffs say they have a cause of action, in view of the provisions of Section 3440, Revised Statutes 1939. However, assuming that this statute affords a basis for a civil action, the facts alleged in the petition do not bring the case within the purview of this statute. [Fernandez v. LaMothe, supra, l.c. 651, 652.]
No authority has been cited by plaintiffs supporting their contention that this suit is maintainable because, otherwise, plaintiffs will be required to institute "many actions in many states to set aside the transfers" of the property.
The facts may be defectively pleaded but, having found that no cause of action is stated, in any event, we have not gone into such matters. The judgment is affirmed. All concur.