Clay v. Waters

• Decision Date: 01 April 1908
• Docket Number: 2,629.,2,628
• Citation: 161 F. 815
• Parties: CLAY et al. v. WATERS. BOATRIGHT v. SAME.
• Court: U.S. Court of Appeals — Eighth Circuit

161 F. 815

CLAY et al. v. WATERS.

BOATRIGHT v. SAME.

Nos. 2,628, 2,629.

United States Court of Appeals, Eighth Circuit.

April 1, 1908

R. M Sheppard and Thomas Dolan, for appellants.

J. W Halliburton (Samuel McReynolds and H. W. Currey, on the brief), for appellee.

Before HOOK and ADAMS, Circuit Judges, and CARLAND, District Judge.

ADAMS Circuit Judge.

These are appeals from a decree holding Priscilla Boatright, mother of Robert Boatright, and George R. Clay, her attorney, liable for appropriating money and jewelry possessed by Boatright the bankrupt, at the time of his death, and divesting Clay and his wife, Cora, of title to certain real estate and promissory notes in which some of the money was invested. On December 22, 1902, Robert Boatright was, on the petition of his creditors filed November 22, 1902, adjudicated a bankrupt. He failed to attend the first meeting of creditors before the referee, or to submit to an examination as required, and never filed schedules of assets or liabilities. He absented himself from the jurisdiction of the court, or concealed himself so that compulsory process was unavailing. In August, 1903, he went to Windsor, in the Dominion of Canada, and in the assumed name of 'John Bagwell' deposited in the Canadian Bank of Commerce located in that city $40,000 in money to the credit of 'John Bagwell,' 'Polly Bagwell,' and 'Priscilla Bagwell,' and made the same subject to the sight draft of either of them. In May, 1904, Boatright died at Kansas City Mo. Several thousand dollars in money and some jewelry were found on or about his person. Soon after his death Priscilla Boatright, his mother, and Polly Boatright, his widow, went to Windsor, Canada, accompanied by Clay, the attorney, and by his assistance and co-operation satisfied the officers of the Canadian bank that they were the identical Priscilla and Polly Bagwell in whose names the $40,000 had been deposited by John Bagwell in August, 1903, and each drew out one-half of the amount deposited, with accrued interest, amounting for each to the sum of $20,553.64, and appropriated the same to their own use. In like manner, also, they divided the money and jewelry found on or about Boatright's person at the time of his death in Kansas City. Priscilla Boatright secured between $3,000 and $4,000 of that money and some of the jewelry.

The present suit was a plenary action in equity, instituted by the trustee of the estate of Robert Boatright against Priscilla Boatright, George R. Clay, and Cora M. Clay, his wife, charging that the money and property secured by the co-operation of the first two of them, both at Windsor and Kansas City, belonged to Boatright, the bankrupt, before his adjudication in bankruptcy, and therefore now belonged to complainant trustee, and that some part of the money so secured by them had been invested in certain described real estate and promissory notes, and title thereto taken in the name of George R. Clay, or his wife, Cora, which, therefore, now belonged in equity to complainant. The defendants accepted the issues thus tendered, a trial was had in the court below, the issues were found in favor of complainant, and $6,975 of the money secured by defendants were found to have been invested in real estate and notes in the name of George R. Clay or his wife.

A final decree was entered divesting Clay's title to the land and notes, vesting the same in the trustee, awarding the latter a general judgment against Priscilla Boatright and Clay for $17,575, and directing the former to turn over to the trustee the jewelry which she obtained from Boatright at Kansas City. From this decree the defendants prosecuted separate appeals. As there is only one record, we find it convenient to dispose of both appeals in one opinion.

If the money and property taken by defendants did not belong to Boatright before he was adjudicated a bankrupt, the trustee of his estate acquired no title to them (Bankr. Act July 1, 1898, c. 541, Sec. 70, 30 Stat. 565 (U.S. Comp. St. 1901, p. 3451)) and cannot recover in this action. If, on the other hand, the money and property did belong to him before the adjudication, title thereto vested in the trustee subsequently appointed, and he is entitled to relief. This issue is one of fact, pure and simple, and the conclusion of the trial court, unless plainly erroneous, should be followed. We do not find it necessary to resort to the analogies suggested by section 70d of the bankruptcy act relating to the effect of setting aside compositions or revoking discharges upon title to property acquired by the bankrupt after his adjudication. Neither do we find it necessary to apply rules governing the burden of proof in controverted issues invoked by counsel.

The facts disclosed by the proof, when given their natural probative force, satisfy us that the money deposited at Windsor belonged to the bankrupt before the date of the adjudication. The main facts may be briefly epitomized as follows: Boatright was a bad man, and much accustomed to crooked and fraudulent practices. He made his money by feigning to conduct real foot races and prize fights, and through that pretense swindling the innocent and guileless. The opinions in the cases of Stewart v. Wright, 77 C.C.A. 499, 147 F. 321, and Exchange Bank v. Moss, 79 C.C.A. 278, 149 F. 340, sufficiently portray his character, his occupation, and his business methods. So notorious was his infamy that the learned trial judge properly enough observed:

'It is doubtful whether there has ever been a greater scoundrel than Robert Boatright.'

He and his associates in crime had become possessed of about $300,000 in money during the 15 months immediately preceding the adjudication. No loss of this money is shown, and only a feeble and unsatisfactory effort to do it is made by the testimony of an accomplice. Boatright failed, and refused after the adjudication to make disclosure of his assets as required by law. He secreted himself, so as not to be compelled to do so. He took $40,000 out of the jurisdiction of the court and deposited it in fictitious, assumed names, subject, among others, to his own draft.

In this narration we start with the established fact that he and a few associates, of whom he was the acknowledged chief, had an amount of money largely in excess of $40,000 shortly before the adjudication. We end with another indisputable fact that $40,000 in money was concealed by him outside the jurisdiction of the court within eight months thereafter. Meanwhile he persistently and successfully avoided the processes of law, which might have compelled him to disgorge. Why this dodging? Why this removal of money out of the jurisdiction of the court? Why this concealment of it? If he had acquired the money after the adjudication, none of these things would have been necessary. It could not have been taken from him by any processes of the bankruptcy court. Men are presumed to do all things with a purpose, and, when flight, concealment, and expense are resorted to, it is reasonable to presume that such resort was had for a purpose. The natural and reasonable presumption in this case is that they were had for the purpose of concealing the money in question from the reach of the bankruptcy court. Money was found in his possession just before bankruptcy proceedings were commenced, and his subsequent suspicious conduct and the failure to account for its loss justify us in the conclusion at which we have unanimously arrived that he never did lose it, but, on the contrary, concealed it to escape the demands of his creditors.

Attempt was made to show that Boatright left his accustomed place of operation in Webb City, Mo., conducted elsewhere some of his swindling foot races, prize-fighting contests, and the like during the early part of the year 1903, and thereby accumulated an amount of money in excess of $40,000; and we are asked to indulge the presumption that the money secreted in Canada was acquired by him in the ways just mentioned after the adjudication of bankruptcy and during the first part of the year 1903. Neither the character of the witness relied upon to make this showing, nor his story, inspires our confidence. His story is vague, uncertain, and improbable, and his character leads us to discredit it. We conclude that the $40,000 secreted in Windsor belonged to Boatright before the adjudication in bankruptcy, and consequently passed to his trustee by virtue thereof.

We are not satisfied that the money and jewelry found on his person at the time of his death in Kansas City, in May, 1904, had been owned by him prior to December, 1902. There is no such evidence of concealment or suspicious circumstances as characterized his action concerning the deposit of money in Windsor. Moreover, a year and a half had elapsed after his adjudication in bankruptcy and before his death. These and other considerations, unnecessary to mention, have brought us to the conclusion that the trustee has failed to make good his claim to the money and jewelry taken by Priscilla Boatright in Kansas City.

The questions remaining for consideration concern the liability of the defendant Clay in this action. The proof disclosed that he had for some time before and...