Williams v. Snebly

Schmucker, J., delivered the opinion of the Court: The appellant, being the holder of a judgment for $31,209.43 against Chew Snebly, filed a creditor’s bill against him and others in the Circuit Court of Baltimore City asking to have a building in that city known as the Hotel Baltimore, with its furniture and equipment, declared to be the property of Snebly and subjected to the payment of his debts. The bill as filed asked for similar relief as to certain leaseholds in other parts of the city, but the case was not pressed as to them. The Hotel Baltimore is a four-story building, composed of three adjoining dwellings, formerly known as Nos. 221, 223 ¹¹ and '225 Courtland Street which, by means of various alterations and additions have been converted into the present structure. Nos. 223 and 221 were purchased by Snebly and conveyed to him on May 29, 1884, and July 19, 1885 respectively.

He paid $750 in cash for each house and gave mortgages of $2,000 on one house and $3,000 on the other for the balance of the purchase-money. On January 27, 1889, Snebly conveyed the two houses, subject to the mortgages, to one Matthew Swann for a professed consideration of $13,000, and on April 24, 1891-, Swann conveyed them for the same professed consideration to Jennie Myers. The deed to Swann did not' disclose his residence, but the testimony shows that he lived on a farm in Nebraska and was Snebly’s brother-in-law. The third house, No. 225 Courtland Street, was conveyed to Jennie Myers by Mrs. Wm.

S. Waters, its former owner, on January 24, 1894, for a consideration of $7,000, of which $5,000 were paid by the check of Jennie Myers to the order of Snebly and by him indorsed, and the remaining $2,000 were secured by a purchase-money mortgage. The alterations, by which the three dwellings were enlarged and converted into the hotel, were made at different times and were paid for, as was the furniture and equipment, mainly out of the profits earned in conducting the hotel, although $2,000 of it seem to have been derived from the sale of an interest in a fire extinguisher which Jennie Myers claims to have owned. Snebly testified that a further $2,500 of the money spent for the repairs and alterations consisted of proceeds of the sale in 1886 of real estate in New York belonging to his daughter Ray, now Mrs. Miller. The bill was filed by the appellant, after a fi. fa. on his judgment had been returned milla bona, on behalf of himself and such other creditors as might come into the case, asserting that the hotel and its contents were in fact the property of Snebly, and that the conveyances by which the legal title thereto was put into Jennie Myers were covinous and fraudulent contrivances made or procured by Snebly for the purpose ¹² of placing the property beyond the reach of his creditors.

Certain other of Snebly’s creditors, to whom he was indebted for materials purchased by him and used in the alterations' to the hotel building, came into the suit as co-plaintiffs. All of the defendants answered the bill under oath. Matthew Swann admitted the making of the deeds to and from him and that no actual consideration had been paid for either of them, and averred that he had no knowledge of or interest in the transactions, but had simply permitted the use of his name by Snebly in that connection at the request of the latter. He expressly disclaimed any fraudulent intent, but expressed his ignorance as to what may have been the purpose of Snebly in procuring the conveyances to be made.

Snebly in his answer denies the ownership of any interest in the hotel property or its contents, and insists that the conveyances by him to Swann and by Swann to Jennie Myers were in all respects bona fide. He admits that no money consideration passed in either case, but asserts that the real purpose of the two deeds was to protect his daughter, Ray Snebly, in reference to $4,000 of her money which he says were used by him in the purchase and repair of the Courtland street houses. In support of this allegation, he sets out two written agreements, professing to have been executed at the same time as the deeds. The first is a covenant from Matthew Swann which recites the conveyance of the houses to him, and that Snebly had invested $4,000 of Ray Snebly’s money in their purchase and improvement, and then agrees to hold the houses “for her use and benefit." The second is a covenant from Jennie Myers containing like recitals and agreeing to hold the property to secure to Ray Snebly the repayment of the $4,000, and to pay to her that sum "at the death of her father, Chew Snebly.” The answer further asserts that Jennie Myers purchased the house No. 225 Courtland street and its contents, and made the alterations and repairs to it with her own money derived to the extent of $2,000 from the sale of an interest in a fire extinguisher, but mainly earned by her in conducting for her own account the ¹³ hotel which Snebly says she rented of him prior to her alleged purchase of it.

Jennie Myers in her answer gives substantially the same account as Snebly of the hotel enterprise, averring that after she had successfully conducted the boarding-house business as a tenant of Snebly she entered into negotiations with him for the purchase of the building, when she for the first time learned that it was owned by his brother-in-law Swann, and that she then concluded the transaction with Snebly as Swann’s agent upon the terms which we have already mentioned in stating the contents of Snebly’s answer. Matthew Swann later on filed an unsworn amended answer, which Snebly signed as his counsel, in which he stated, as a result of his memory being refreshed, that the consideration for the deed to him and the one from him to Jennie Myers was the execution of the covenants already mentioned in connection with Snebly’s answer. Much testimony was taken, and after hearing the case the Circuit Court by its decree determined that the property in question belonged to Jennie Myers and not to Snebly and was not liable for his debts, but directed Jennie Myers within ninety days to pay into Court $4,000 to await the determination of the claim thereto of Snebly’s daughter Ray, with the privilege to the latter to establish her claim by testimony before the auditor. Upon default of such payment into Court the decree directed the hotel to be sold and $4,000 of the proceeds to be paid into Court and the balance to be paid to Jennie Myers.

On the day before the filing of the decree Ray Miller and her husband were, upon the petition of Jennie Myers, made parties to the suit with liberty to establish her claim to the $4,000 by testimony before the auditor. The case presents issues of fact rather than of law. It is useless to cite authorities upon the proposition that conveyances made by, or by procurement of a debtor for the purpose of hindering, delaying or defrauding his creditors by placing his property beyond their reach will be avoided at the suit of the creditors if the grantee had knowledge of the purposes for ¹⁴ which the deeds were executed or sufficient notice of that purpose to put him upon inquiry in reference to it. Here, it is true, the conveyances were not made directly from Snebly to Jennie Myers, but the transmission to her through Swann of the title to Nos. 221 and 223 Courtland street was so plainly accomplished by the procurement of Snebly that it may, for the purposes of this case, be treated as a direct conveyance.

The title to the third house was never in Snebly, but if he in fact supplied the consideration for its purchase and procured with her assent the conveyance to be made to her under the circumstances appearing from the record to protect the property from the claims of his creditors it would be .chargeable in her hands with a resulting trust in their favor. During the long period covered by the transactions involved in the inquiry before us, Snebly and Jennie Myers lived in the same house and occupied adjoining rooms. Their intercourse with each other was held directly and not through the channel of correspondence or the intervention of third persons. We are, therefore, deprived of the aid of direct testimony of disinterested witnesses as to what passed between them and must, as this Court said in the case of Feigley v.Feigley, 7 Md. 562 , “ look for the motives and designs of the parties in the surrounding circumstances attending the transaction and must call to our aid every fact, however remote and trivial it may be, which can throw light upon the subject.” “And for this purpose not only are the acts and declarations of the parties made contemporaneous with the conveyances admissible but also such as are prior thereto provided they refer to and are connected with it.” Cooke v. Cooke, 43 Md. 532 .

In the voluminous record before us thfe testimony alone, exclusive of the exhibits and pleadings, covers 294 pages, so that we cannot review it at length or do more than state our conclusions and refer briefly to the facts upon which they rest. The evidence satisfies us that the conveyances in question, so far as Snebly is concerned, were parts of a scheme devised by him to put the property out of the reach of his creditors. He was insolvent at the time he made the deed to Swann. ¹⁵ Although the suit of the appellant, on which the judgment against Snebly was rendered, had not yet been brought the indebtedness upon which it was founded had existed for some years in the form of a final judgment in the State of New York. He was of course aware of the existence of this foreign judgment, and as the judgment upon it in Maryland was entered in November, 1890, it is fair to assume that he knew in 1889, when he made the deed to Swann, that the appellant contemplated instituting suit against him in Maryland on the judgment.

It is apparent from the sworn answer of Swann, who resided in Nebraska and was never in Maryland, that he simply lent the use of his name to Snebly and had no real interest in the transactions. Snebly admitted in his testimony that in December, 1890, just after the judgment was obtained against him, he assigned to his daughter Ray, a judgment against Benj. J. Worthington for $1,685, to protect her $4,000, and “ to protect the claim against any attachment that might be issued ” on the appellant’s judgment. In 1893 he entered another judgment against Worthington and others to the use of his daughter Ray, and then as her attorney directed it to be entered to the use of Jennie Myers, and when asked why he did so, replied that the entry to Ray’s use must have been to furnish her additional security for her $4,000, but he could not remember about the use to Miss Myers.

Ever since the purchase by Snebly in 1884, of the first of the houses composing the hotel, he has continued to live in the building and repeatedly acted and spoke of it as if he were its owner. The witness Hochheimer, who as late as 1898, conducted, as lessee, the dining-room of the hotel, testified that he had no dealing with Jennie Myers, but rented the room from Snebly, who asserted that he was the owner of the hotel and said that Miss Myers was his housekeeper. Wm. J. Lloyd, who conducted the dining-room for a few months about the year 1893, testified that he made his contract with Snebly, and had no dealings with any other person, although he said that as part of his agreement he furnished board to Mr. Snebly, Miss Jennie and servant.

The witness Wood ¹⁶ ley said that about two years ago Snebly applied to him to buy about 50,000 bricks on credit, representing that he was good for the price of the bricks as he owned the Hotel Baltimore. The witnesses Barton, Fahey, Heise, Breslin and Caskey all testified that during the past few years they had sold to Snebly materials for the repairs and improvements to the hotel, for all of which he made contracts in his own name and they never heard of Jennie Myers as owner or proprietor of the establishment. Snebly paid for some of these materials with his own note and suffered judgments to go against him in suits brought for the price of others of them. Several witnessess testified that Snebly had handed to them cards of the hotel on which his name appeared as proprietor.

The impression produced upon the witnesses we have mentioned and upon others who had dealings with Snebly in connection with the hotel was that he, and he alone, was its proprietor. J. Seymour Waters, who acted as agent and attorney for his mother in making the sale of No. 225 Courtland street