Cooper v. Freer

• Citation: 385 S.W.2d 340
• Decision Date: 10 December 1964
• Docket Number: Nos. 8322,8323,s. 8322
• Parties: James L. COOPER, Plaintiff-Respondent, v. V. R. FREER and Ethel Freer, Defendant-Appellants. R. Y. Hopkins, Margaret Hopkins and Transportation Service Company, Garnishee, Ozark Air Lines, Inc., Garnishee.
• Court: Court of Appeal of Missouri (US)

Page 340

385 S.W.2d 340

James L. COOPER, Plaintiff-Respondent, v. V. R. FREER and Ethel Freer, Defendant-Appellants.

R. Y. Hopkins, Margaret Hopkins and Transportation Service

Company, Garnishee,

Ozark Air Lines, Inc., Garnishee.

Nos. 8322, 8323.

Springfield Court of Appeals, Missouri.

Dec. 10, 1964.

Henry Warten, Emerson, Foulke, Joplin, for defendant-appellants.

Max Patten, Joplin, for plaintiff-respondent.

RUARK, Presiding Judge.

These are appeals from two separate judgments holding separate assignments and transfers of (1) a leasehold interest with a hangar situate thereon from V. R. Freer to V. R. Freer and Ethel Freer, and (2) a Cessna airplane from V. R. Freer to V. R. Freer and/or Ethel L. Freer (tenants by the entirety), to be fraudulent and void as to plaintiff, now respondent, James L. Cooper.

Litigation between plaintiff-respondent Cooper and defendant-appellant V. R. Freer has followed a long and tortuous course. It commenced in September 1949, when Cooper brought suit against Freer, who was charged (in the amended petition) as doing business under the name of 'Freer Construction Company.' By this suit Cooper claimed a share of the profits from the construction company business and prayed an accounting for the period extending from February 1947 to July 25, 19495. On September 15, 1952, judgment was rendered ordering the accounting and appointing a referee. On December 1, 1958, the referee filed report in which he found Freer to be indebted to Cooper in the sum of $6,857.11, plus interest. On March 14, 1960, the court sustained only one of Freer's exceptions to the referee's report (that which allowed Cooper a share in the rentals received from machinery owned by Freer) and overruled and denied all others. Final judgment was rendered in favor of Cooper and against Freer in the total sum of $7,368.84. Executions were issued, the plane and hangar property were levied upon and sold in partial satisfaction; and out of such proceedings arose the present controversies.

On March 11, 1954, V. R. Freer bought the Cessna airplane (price seven thousand dollars) and took title in his own name. In January 1955, he took a sublease agreement on certain land at the Joplin airport. This also was taken in his name. Later this sublease agreement was amended (in order to change the description) and the amendment was likewise signed by V. R. Freer as owner. After the sublease was obtained, a hanger was built on the land. On March 12, 1959, (which was after the referee's report had been filed), V. R. Freer executed an assignment of the airplane to 'V. R. Freer and/or Ethel L. Freer, tenants by the entirety.' The consideration stated was 'one or more dollars.' V. R. Freer's notarial acknowledgment to this instrument was taken by his wife Ethel who signed as 'E. L. Freer.' On December 16, 1959, V. R. Freer, in consideration of 'one dollar and other valuable considerations,' assigned the leasehold interest, with the hangar situate thereon, to V. R. Freer and Ethel L. Freer. Without going into detail, we can say that the evidenced justified the conclusion that V. R. Freer, the assignor in these two transfers, had no other property out of which satisfaction of plaintiff's judgment could be obtained; and it is these transfers which the creditor Cooper contended, and the court found, were fraudulent and void.

Every conveyance or assignment made or contrived with intent to hinder, delay, or defraud creditors is void as to such creditors (Sec. 428.020 V.A.M.S.), and a voluntary assignment from husband to wife to the prejudice of the husband's creditors is presumptively fraudulent and void as to such creditors. Such transfers are looked upon with suspicion, and their good faith must be so clearly shown that there is no reasonable doubt as to the honesty of the transaction. ¹

Appellants Freer, in their briefs, recognize the above rule and frankly state that plaintiff Cooper made a prima facie case of fraud; but they contend that defendants have clearly shown by 'overwhelming evidence' that the two properties were originally purchased (and built) from the joint funds of Ethel and V. R. Freer, husband and wife; that there was a resulting trust in the properties in favor of the wife, and the (later) transfers to husband and wife were only in rectification of the error in taking title in the name of the husband in the original transfers. The airplane was paid for by one check on the account of 'V. R. Freer Construction Company' which was signed 'V. R. Freer Construction Co. by E. L. Freer' (italics are printed.) The rent for the sublease was paid by check in similar fashion. Subsequently a hanger was constructed upon the sublease, and various checks for labor and material extending over several months were issued on the same account and in the same manner. 'E. L. Freer' is Ethel Freer.

In order to sustain their burden, defendants-appellants relied upon the testimony of Ethel Freer. She stated that she kept the office of V. R. Freer Construction Company (it was in the home), looked after the payroll and the records, attended to the telephone, wrote and signed most of the checks, and paid the bills. In fact, she had been 'bookkeeper for Vic ever since he started in business.' She said that the business of V. R. Freer Construction Company was a partnership, but we must remark that the testimony was an assent which followed a leading question from counsel. She stated, again in assent to a leading question concerning the bank account, 'Q. Joint account as partners and husband and wife, is that right? A. Yes, sir.' On another occasion she testified that the partnership account was 'just like it has always been.' Her testimony concerning her knowledge (or lack of knowledge) of the fact that title to the airplane and the hanger lease had been taken in her husband's name, and the fact of the transfer (some five years later) to husband and wife, leaves us much in doubt. We are unable to find that she ever said specifically that she did not know or learn that her husband took sole title to the airplane and the hangar lease. As to the hangar lease she said 'Yes, we have a copy of it. I don't know that I have completely read it.' She said she had never read the bill of sale for the airplane. 'Vic usually takes care of these things. I didn't read it.' Asked if the plane was purchased in her name or V. R. Freer alone, she remarked 'Well, that I don't know, Mr. Foulke.' She took an acknowledgment on the bill of sale from V. R. Freer to V. R. Freer and Ethel (herself), as husband and wife. ² 'I acknowledged his signature. Vic takes care of those things.' She said, 'I won't say that I did' examine it before taking the acknowledgment. 'If Vic comes in and asks me to notarize something for him, why I notarize his signature. I don't read it, no.' It appeared from the cross-examination that V. R. Freer Construction Company had been incorporated (apparently in 1958). Asked if she was a stockholder in it, she said, 'Yes, sir, I expect I am'; but that the corporation had never been 'activated' and that V. R. Freer Construction Company had never done business as a corporation; that it had continued to do business from 1950 on the same bank account, and it was still a partnership at the bank. Defendants then introduced a certified copy showing that on September 12, 1950 (after the parent suit was filed), there was filed with the Secretary of State a registration of fictitious name for V. R. Freer Construction Company, which listed both Freer and his wife Ethel as owners and tenants by the entirety. Both signed the registration. The testimony of Ethel, with the cancelled checks of V. R. Freer Construction Company, and the fictitious name registration, is substantially appellants' case. From this evidence, their reasoning makes one mighty bound from the level of sole ownership to the pinnacle of tenancy by entirety where the debtor and the property can stand untouched by creditors. We find that we must plod more slowly.

Does the evidence clearly show that the bank account was a tenancy by the entirety? If so, when did it become so? Neither the bank record, the pass book, nor the depositors' agreement was offered to substantiate the claim. In Harrellson v. Barks, Mo.App., 326 S.W.2d 351, 360, we said:

'In regard to this purchase the defendant relies upon the testimony of the plaintiff that 'we both had a bank account together.' The words 'joint account' are the words of the cross-examining lawyer, not the witness. The form of the account is not shown, nor was any effort made to show it. The expression 'joint account' is, by long continued common usage, a rather general and often erroneous term. It is often and indiscriminately applied to accounts which are held as tenants in common, as tenants by entirety, as joint tenants with right of survivorship, and to accounts which simply carry authority to check. We think this evidence, standing alone, is insufficient to overcome the strong evidence of ownership standing in and by the certificate of title. * * *'

In absence of proof of the form of deposit, the appellants had the burden of proving the interest of the wife therein. ³ The actual record could have been easily produced. In its absence, the trier of the fact is, at best, faced with a choice as to credibility and accuracy. And, if so, going back to the original proceeding (instituted in 1949), we find that plaintiff charged that V. R. Freer (not V. R. and Ethel Freer) was engaged in business as a general contractor under the name of Freer Construction Company. The defendant in his answer admitted such. One of the issues before the referee was whether or not defendant Freer should be entitled to deduct from the profits a monthly charge of one hundred dollars, which had not been paid, for services of Ethel Freer in keeping the records, answering the telephone, and taking care of the office. The referee found that the service of Ethel Freer...