Oldham v. Wright

• Decision Date: 09 July 1935
• Citation: 85 S.W.2d 483,337 Mo. 170
• Parties: Jay L. Oldham, Plaintiff in Error, v. Anna K. Wright, Jessie McKay and Lida M. Nesbitt, Defendants in Error
• Court: Missouri Supreme Court

85 S.W.2d 483

337 Mo. 170

Jay L. Oldham, Plaintiff in Error, v. Anna K. Wright, Jessie McKay and Lida M. Nesbitt, Defendants in Error

Supreme Court of Missouri

July 9, 1935

Rehearing Denied July 9, 1935.

Appeal from Jackson Circuit Court; Hon. Denton Dunn, Judge Opinion filed at the September Term, 1934, April 17, 1935 motion for rehearing filed; motion overruled at May Term July 9, 1935.

Reversed and remanded.

Jay L. Oldham for plaintiff in error.

(1) The court erred in refusing to decree and adjudge, under the pleadings and evidence that the deed put of record September 23, 1926, purporting to convey Lot 42 and the north 10 feet of Lot 41 Hampden Place, to Lida M. Nesbitt and Jessie McKay was void and fraudulent as to this plaintiff, and erred in refusing to set aside said deed, and hold same for naught, and decreeing said property to be the property of Anna K. Wright and subject to the lien of plaintiff's judgment, instead of dismissing plaintiff's bill in equity for insufficiency of the evidence. (a) The alleged deed put of record September 23, 1926, purporting to convey to defendants, Lot 42 and the north 10 feet of Lot 41 Hampden Place, was fraudulent and void as to an existing creditor of their grantor, Anna K. Wright, who conveyed the real estate in controversy to the defendants for a consideration of one dollar and her future support for life. 27 C. J. 530, sec. 214; Bump on Fraudulent Conveyance (3 Ed.), p. 49; Bobb v. Woodward, 50 Mo. 100; Moore on Fraudulent Conveyances, 247, sec. 2; Bank v. Guthrey, 127 Mo. 193; Massey v. McCoy, 79 Mo.App. 193; White v. Gibson, 113 Mo.App. 568, 88 S.W. 120; Walther v. Null, 233 Mo. 122, 134 S.W. 993. (b) A grantor while insolvent, who conveys all of her real estate to relatives, for a nominal consideration, and continues in possession of same, as mistress up until the time of her death; in the meantime paying all state, county and city taxes, interest on incumbrance, premiums on fire insurance, water, gas, electric light and telephone bills and having statements of same when due, made out in the name of Anna K. Wright and mailed to her home 3517 Charlotte Street, and having receipts of same made in the same way are badges of fraud. May v. Gibler, 319 Mo. 672, 4 S.W.2d 671; Munford v. Sheldon, 320 Mo. 1084, 9 S.W.2d 910; Citizens Bank v. Hilkemeyer, 325 Mo. 849, 29 S.W.2d 858. (c) A voluntary conveyance of real estate by a debtor, without retaining ample assets to pay all existing creditors is presumptively fraudulent. Lynes v. Holt, 1 S.W.2d 122; Citizens Bank v. Hilkemeyer, 29 S.W.2d 1090, 325 Mo. 858. (2) The decree is not within the issues made by the pleadings. Davis v. Montgomery, 205 Mo. 283; Spindle v. Hyde, 247 Mo. 33, 152 S.W. 760; Woltz v. Venard, 253 Mo. 86, 161 S.W. 760; Riggs v. Price, 277 Mo. 355, 210 S.W. 420; Stewart v. Omaha Loan & Trust Co., 283 Mo. 375, 222 S.W. 808; Barron v. Store Co., 292 Mo. 195; Hecker v. Bleish, 319 Mo. 149, 3 S.W.2d 1019; Congregation B'Nai Abraham v. Arky, 323 Mo. 776, 20 S.W.2d 899; Friedel v. Bailey, 329 Mo. 37, 44 S.W.2d 15.

Lathrop, Crane, Reynolds, Sawyer & Mersereau for defendants in error.

Hyde, C. Ferguson and Sturgis, CC., concur.

OPINION

HYDE

This is an action in equity to set aside a deed on the ground that it was made to hinder, delay and defraud plaintiff, a judgment creditor. At the close of plaintiff's evidence defendants moved the dismissal of plaintiff's bill on the ground that his evidence showed that he was not entitled to any equitable relief. The court sustained this motion, and entered a judgment dismissing plaintiff's bill and granting defendants certain affirmative relief. Plaintiff has brought the case before this court by writ of error.

Plaintiff's evidence showed that plaintiff had commenced a suit against defendants' grantor Anna K. Wright July 27, 1925, upon her alleged written agreement of March 3, 1918, to pay plaintiff $ 1200, in monthly payments of $ 25, for services resulting in obtaining a 99-year lease of certain property belonging to her and also for $ 350 attorneys' fees in another matter; that Mrs. Wright had filed answer at the September, 1925, term, setting up the Statute of Limitations, want of consideration and other grounds upon which she claimed the agreement was null and void; and that plaintiff had obtained a judgment in this suit for $ 1765 on December 12, 1929, when Mrs. Wright failed to appear at the December, 1929, term. It was further shown that Mrs. Wright had, on September 22, 1926, conveyed the residence property, in which she lived, to defendants Jessie McKay and Lida M. Nesbitt; that this deed was placed on record on the next day; that this deed stated that its consideration was "one dollar and other valuable considerations;" that it was made subject to an unpaid balance of $ 2000 on a mortgage given to secure a note for $ 3500; and that this incumbrance was assumed by the grantees. Mrs. Wright had purchased this property in September, 1923, subject to this same incumbrance and the consideration was stated in her deed to be $ 18,000. Plaintiff, after obtaining judgment against Mrs. Wright, had an execution issued and garnishment made thereunder of the Fidelity National Bank, but obtained nothing thereon and the execution was returned "not satisfied." Plaintiff then commenced this suit on March 10, 1930.

Mrs. Wright was sixty-six years old at the time she made the deed to defendants. She died August 6, 1930, and the case was dismissed as to her. The grantees will be hereinafter referred to as the defendants. Defendant Jessie McKay was a first cousin of Mrs. Wright, and had lived with her twelve years prior to the time the deed was made. She was a school teacher, then forty-four years old, and employed in the Kansas City schools at the salary of $ 2200 per year. Her salary had been increased so that at the time of the trial it was $ 2900 per year. Defendant Lyda M. Nesbitt was a second cousin of Mrs. Wright. She had been taken by Mrs. Wright when she was six years old and brought up by her. She was thirty-six years old, at the time the deed was made, and was employed as a children's worker in the Presbyterian Church at a salary of $ 70 per month. At the time of the trial her salary had been increased to $ 100 per month. Prior to the making of the deed, defendants had lived with Mrs. Wright as members of her family and paid her no board. They bought their own clothes and sometimes bought other things they wanted and paid for tickets when they went places. They were both called as witnesses by plaintiff and their evidence showed that when the deed was made to them the agreement was that they were to care for Mrs. Wright through her lifetime; that Miss McKay, having the largest income, paid the taxes and interest and three-fourths of the grocery bill; that Miss Nesbitt paid the smaller bills; that Mrs. Wright still went to pay the taxes, interest and other bills and the receipts were made in her name; but that defendants always furnished the money. Their evidence further showed that, after assuming the responsibility for supporting Mrs. Wright and paying the interest and taxes, Miss McKay went to school at Columbia University in New York to get a Master's degree in order to increase her earning capacity as a school teacher; that defendants did not know that plaintiff had a suit pending against Mrs. Wright and did not learn of it until after he obtained judgment; that Miss Nesbitt knew that there had been a controversy between Mrs. Wright and plaintiff, but that she thought it had been settled. Defendants' estimate of what it cost them for Mrs. Wright's support was about $ 600 per year.

After the deed was made, the electric light, water, gas and telephone bills ran along in Mrs. Wright's name and she attended to paying them but defendants furnished this money. Mrs. Wright, however, paid with her own money the houseman who lived over the garage and prepared their meals, and bought some of her own clothes. Defendants said that Mrs. Wright was allowed to pay all bills because defendants were both busy during the daytime at their occupations, and also because Mrs. Wright had been a long-time resident of Kansas City "it would save her some humiliation" to be allowed to continue to pay the bills, and that "it was to save her embarrassment." Miss McKay said also that Mrs. Wright's financial condition, at the time the deed was made, "was very much reduced from what it had been," but that she had sufficient to pay a claim of $ 1700 or $ 1800 at the time she made the deed; and that "she owned some property in Casper (Wyoming), and she had some electric light stock, and she had some Irving-Pitt and something in the bank, . . . about $ 800 in cash." She had sold the stock and used the money before she died. At the time of the trial, Mrs. Wright's funeral expenses had not been paid and no administration had been commenced on her estate. Mrs. Wright owned the furniture but left no other property. The house had eight furnished rooms, a sleeping porch and third story. Miss McKay valued the place at between eight and ten thousand dollars. Plaintiff had evidence that it had been built only about twelve or thirteen years, and that its value under ordinary conditions was about $ 15,000 or $ 16,000. There was $ 8,000 fire insurance on the house, taken out in 1930 in the name of defendants, which was...