132 F. 485 (W.D.Mo. 1904), 268, Burnes v. Burnes

Docket Nº:268, 279, 280, 283.
Citation:132 F. 485
Party Name:BURNES et al. v. BURNES et al. (two cases). GATCH v. SAME. BURNES v. SAME.
Case Date:September 19, 1904
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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132 F. 485 (W.D.Mo. 1904)

BURNES et al.


BURNES et al. (two cases).







Nos. 268, 279, 280, 283.

United States Circuit Court, W.D. Missouri, Saint Joseph Division.

September 19, 1904

Page 486

Frank Hagerman, Vinton Pike, and Noble B. Judah, for complainants.

O. M. Spencer, for respondent Kennett Burnes.

F. W. Lehmann and Stephen S. Brown, for other respondents.

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The first of the above-entitled cases is a bill in equity to establish between relatives the ownership of certain stock of a corporation known as the 'Burnes Estate.' The business of the corporation is banking, real estate, and other lines. Cases 279, 280, and 283 are auxiliary to the main or first case, and take their places on the docket by way of cross-bills.

In the early part of the year 1867 there were three brothers residing in Missouri-- Daniel D. Burnes, Sr., James N. Burnes, Sr., and Calvin F. Burnes. The wife of Daniel D. Burnes had died in 1866, and he died testate in April, 1867, leaving the following children as his only heirs: (A) Lewis C.Burnes. (B) James N. Burnes, Jr. (C) Cirginia D. Burnes. (D) Katherine B. Gatch. (E) Emma Winningham. (F) Mary H. Moore. The first four (A, B, C, and D) are defendants herein. Mrs. Winningham and Mrs. Moore are not brought in, as by sales and transfers other parties to the litigation own the rights which they would have taken by inheritance or otherwise. James N. Burnes, Sr., died in 1889, leaving as heirs his wife, Mary S., and two sons, D. D. and C. C. Burnes. The wife, Army S., transferred all of her estate in equal shares to the two sons, D. D. and C. C. Burnes. She has since died. C. C. Burnes died intestate in 1893, leaving as his only heirs his widow, Frances B., and daughter, Marjorie, the complainants herein. D. D. Burnes died intestate in 1899, leaving as his only heir Kennett, a respondent herein. Calvin F. Burnes died intestate in 1896, leaving as his only heirs his widow, Kate H., and his daughter, Mary V. Burnes, respondents herein.

What property in value either or all of the three brothers owned in 1867 does not satisfactorily appear. There is evidence tending to show that the three had been in business as partners, and that the aggregate estates of the three was $50,000, making the estate of Daniel D. Sr., $16,666.66; and that is the contention of complainants. There is reason for believing that he was worth in excess of $40,000; and such is the contention of defendants. But this question is not very material, and in no sense decisive. He devised and bequeathed all of his estate to his two brothers, James N., Sr., and Calvin F., share and share alike. There was an expressed wish in the will that the two brothers would adopt his six children, all of whom at his death were minors; the eldest, James N., Jr., being 14 years of age, and the youngest, Virginia, being 1 year of age. But the recital in the will created no trust, and placed no burden on his estate, and the two brothers, by accepting the benefits therefrom, assumed no legal duty nor obligation.

The two brothers, shortly after the death of Daniel D., Sr., signed a paper adopting the six children. As to them it was properly acknowledged before an officer, and it was timely recorded in the proper county office. The wife of each of the adopting brothers signed the adoption paper, and the same acknowledgment by the same officer was taken as to them, which fails to show as was then required by the Missouri statutes. Complainants contend that the option paper was and is void for two reason: (1) It was not legally acknowledged as to the wives, and, not being legally acknowledged, it could not go of record as to them; recording being a necessary requisite in the adoption of the children. (2) The six children could not have two foster parents.

Within a few weeks after the death of Daniel D., Sr., James N., Sr., with his wife and children, moved into the house in Platte county in which Daniel D., Sr., had resided; and in that house, with his own family and the six children of Daniel D., Sr., he resided until 1873. From 1873, until the deaths and marriages separated them, with exceptions which need not be stated, James N., Sr., and family, the six children of Daniel D., Sr., and Calvin F. and family, resided in the same house, it being a large one, situated on a tract of

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land of more than 200 acres. They named it 'Ayr Lawn.' The two surviving brothers joined in all family expenses, each claiming, and I assume correctly, to be the half owner of all the property, and there seems to have been no accounts kept as between them. Here the two brothers and their wives, with the three sets of children resided for many years, as one happy, contented, and loving family. What either or both of these brothers possessed in 1867 does not clearly appear. Possibly they had little or nothing, as is contended by the defendants. Possibly they had, as complainants contend, over $30,000 in their own right, supplemented by over $16,000 received from their brothers' estate. These matters are in doubt. But they had the surest of all assets for building up an estate-- determination, will power well directed, and financial ability, akin to, if not, genius itself. The integrity of neither is questioned in the entire record, excepting as to the treatment of the six children in matters of advancements and the division of the estates. They greatly prospered up to January, 1889, when they were worth from $600,000 to $650,000, at which time James N. Burnes, Sr., died intestate.

The question then arose between Calvin F., the wife and children of James N., Sr., and the six children of Daniel D., Sr., as to what should be done in the matters of property. Calvin F. said he would administer upon the estate as surviving partner, but it is said by one or more witnesses not in earnest as to that. He proposed pooling the assets in the form of a corporation and allotting the shares, but not in equal parts. That was opposed by some. It is said in testimony that Calvin declared that it would be so done, or that those opposing would take the results of bitter, prolonged litigation. Some of the six children say they did not know before of their father's will, nor of the adoption paper. There were conferences between some, if not all. There were consultations between some of them and Gen. Moore, of Kansas City, a lawyer of ability, the husband of one of the six. The husbands of two of the others had something to do in the matter. At the end of six months a written agreement, reciting the facts, containing a copy of the will of Daniel D., Sr., and of the adoption paper, was signed by all of them, excepting Mary, the wife of Gen. Moore. This agreement was to the effect that the aggregate of the estates of the two deceased brothers and all of Calvin's property should be placed as the assets of a corporation known as the 'Burnes Estate,' with a capital stock fully paid up of $100,000, divided into 1,000 shares of $100 each, to be allotted as per recitals in the agreement. In 1889 the corporation under the laws of Missouri was thus formed, with the stock at least six times paid up, because the assets were then worth, as before stated, at least $600,000, now grown to be fully $4,000,000 in value. And by the agreements thus consummated the 1,000 shares were to be, and were, divided and issued to the persons as follows: (1) To the widow and two sons of James N. Burnes, Sr., 375 shares; (2) to Calvin F. Burnes, 375 shares; (3) to Mary H. Moore, 41 shares; (4) to the other five children of Daniel D. Burnes, Sr., 209 shares. But, as Mary Moore declined to go into the agreement, her shares were adjusted by a money payment to her. It will be observed that the other five children of Daniel D., Sr., took 209 shares, or about 41 shares each. The 41 shares which May H. Moore elected to not take, but to take money instead, were issued as follows: (1) The heirs of James N. Burnes, Sr., 21 shares; (2) the remaining five children of Daniel D. Burnes, Sr., 20 shares. Thereupon the 1,000 shares stood as follows: Heirs of James N., Sr., 396 shares; heirs of Daniel D., Sr. (Mrs. Moore excepted), 229 shares; Calvin F. Burnes, 375 shares. Mrs. Moore, in declining to go into the corporation, for the money paid her, relinquished her expectancy in the estates of Calvin F. and James N., Sr.

The agreement of settlement thus made, the formation of the corporation, and the allotment of shares is claimed by the defendants to have been the result of a fraud on them, to their injury, and the prayer by cross-bill is that said matters be canceled, and all parties to the record take such shares as they would have done by inheritance under the laws of the state; the adoption paper being treated as valid. They claim to have acted under the duress of Calvin F. They, or some of the, claim they did not know what they were signing. They claim Calvin F., as a foster parent, owed them the duty of making known all the facts; whereas, he concealed the important fact that

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he and his brother, James N., Sr., had made large advancements to D. D. and C. C., the sons of James N., Sr. Shortly after the death of Calvin F. there was found among his papers an instrument in his own handwriting, with his name written therein. It was written in 1893, or at a prior time. It purported to be his last will and testament; but it was not otherwise signed than as above stated, and it was not witnessed. It therefore could not be admitted to probate. If it had been signed, attested, and probated, his entire estate, consisting of 375 shares of stock in the 'Burnes Estate' corporation, would have passed to the corporation, subject to two burdens: (1) The payment by the corporation to his widow and daughter, or the survivor, for life, of an annual annuity of $12,000; (2) an annual annuity of $2,400 for life to his...

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