Croft v. Morehead

• Decision Date: 11 April 1927
• Docket Number: 25056
• Citation: 293 S.W. 405,316 Mo. 1213
• Parties: Nellie Morehead Hannan Croft and Lillie M. Harbolt, Appellants, v. Reuben H. Morehead
• Court: Missouri Supreme Court

293 S.W. 405

316 Mo. 1213

Nellie Morehead Hannan Croft and Lillie M. Harbolt, Appellants, v. Reuben H. Morehead

No. 25056

Supreme Court of Missouri

April 11, 1927

Appeal from Sullivan Circuit Court; Hon. J. E. Montgomery Judge.

Reversed and remanded (with directions).

D M. Wilson for appellants.

(1) Creditors who have reduced their claims to judgment have the right to bring a suit in equity to set aside conveyances on the ground of fraud. Brown v. McKeown, 265 Mo. 320; Bank v. Ankrum, 191 Mo.App. 251. (2) They also have the right to bring such a suit where the grantor was mentally incapable to make the conveyance, or was unduly influenced. (3) The failure of the defendant to have his wife and step-mother to testify, either in person or by deposition, is strongly against him and should be taken into consideration. Kame v. Railroad, 254 Mo. 175; Schooler v Schooler, 258 Mo. 83; McClanahan v. Railroad, 147 Mo.App. 486. (4) Nora Morehead, the defendant's wife, was a competent witness. Laws 1921, p. 392. (5) While disposed to defer in a large measure to the findings of the circuit court, the Supreme Court will assert its right to review the whole evidence, and draw its own conclusions therefrom. Bank v. Fry, 216 Mo. 446. (6) One may be capable of making a will, and yet incapable of making a contract. Martin v. Baker, 135 Mo. 503; Ennis v. Burnham, 159 Mo. 518; Heinbach v. Heinbach, 262 Mo. 69. (7) The evidence shows that the deeds were voluntary. (8) A voluntary conveyance by an insolvent father to his son is fraudulent as to creditors. Childers v. Pickenpaugh, 219 Mo. 376; Bank v. Nichols, 202 Mo. 323. (9) Such conveyances are presumptively fraudulent as to existing creditors, and the burden of proof is on the grantee to establish their validity. Walsh v. Ketcham, 84 Mo. 427; Potter v. McDowell, 31 Mo. 62; Eddy v. Baldwin, 32 Mo. 329; Fehlig v. Busch, 165 Mo. 144; Vandeventer v. Goss, 116 Mo.App. 316; Miller v. Allen, 192 S.W. 967. (10) The allowance of a demand by a probate court is a judgment of a court of record, and is declared by statute to have all the force and effect of a judgment. Sec. 189, R. S. 1919. (11) By the same section these courts are given jurisdiction over all off-sets and other defenses allowed by law. Sec. 189, R. S. 1919. (12) An executor or administrator shall have power to exhibit the same off-sets and other defenses against any suit or other proceeding instituted against the estate of his testator or intestate which he might have made in his lifetime. Sec. 191, R. S. 1919. (13) Where the merits of a controversy have been passed upon by a court of competent jurisdiction, they become res adjudicata, and not open to inquiry between the same parties or their privies in any other suit unless the judgment was procured by fraud, or an appeal duly taken. Spradling v. Conway, 51 Mo. 51; Jamison v. Wickham, 67 Mo.App. 575; Smith v. Sims, 77 Mo. 269. (14) The allowance of a claim by the probate court is a judgment of a court of record, and has all the force and effect of a judgment of a circuit court. Cooper v. Duncan, 20 Mo.App. 355; Munday v. Leeper, 120 Mo.App. 417; Smith v. Sims, supra. (15) The character and finality of res adjudicata attaches to allowances of the probate court to the same extent they do to judgments of other courts. Whitecloud Milling Co. v. Thomson, 264 Mo. 595. (16) A judgment of a court of record unappealed from, cannot be attacked collaterally, even on the ground of fraud. Abington v. Townsend, 271 Mo. 602. (17) The evidence in this case shows conclusively as far as the demand and judgment of Mrs. Croft is concerned that her notes were based on a valuable consideration, viz: the corner property which had been deeded to her and in which she was living; and as far as Mrs. Harbolt's demand and judgment is concerned the presumption is very great that her note was based also on a valuable consideration, two juries, one in probate court and the other in the circuit court having found in her favor, it appearing from Reuben Morehead's own testimony that he considered the note was given without consideration, and had employed counsel and fought the case in both courts.

A. G. Knight, R. E. Ash, P. M. Marr and John H. Taylor for respondent.

(1) There was no sufficient evidence of mental incapacity, but substantial evidence of business ability and capacity to transact business. The attorney for appellant transacted business with deceased and received payment therefor. (2) The judge of the circuit court heard the evidence and had the opportunity to pass upon the demeanor of the several witnesses and their interest in the trial, and the Supreme Court will defer to his findings if there is any evidence upon which to base them. (3) The evidence does not sustain appellants' contention of fraud and insolvency at the time of making the deeds.

Lindsay, C. Seddon, C., concurs.

OPINION

LINDSAY

After the first hearing of this cause upon appeal, three of the Judges of this Division concurred in an opinion prepared by my associate, Commissioner Seddon. One of the judges was absent. A rehearing was granted; the cause was argued orally by counsel on both sides; and there was filed on behalf of plaintiffs an additional abstract and brief.

The plaintiffs are the daughters of William Morehead, deceased, and are judgment creditors of his estate. The controlling question is the validity of two deeds executed by said William Morehead, and his wife, a little more than one year before his death, to his son, defendant Reuben H. Morehead. Upon a reconsideration of the record, we have reached a different conclusion from that stated in the original opinion as to the rights of the plaintiffs as judgment creditors, but we adhere to the conclusions reached in that opinion, that the deeds in question were not to be avoided, either because of lack of mental capacity on the part of William Morehead, or on the ground that their execution was due to the exercise upon him of an undue influence on the part of defendant and his wife.

The issues made by the pleadings, the evidence, the conclusions reached upon the issues of mental capacity and undue influence, and the reasons therefor as stated in the original opinion, prepared by Seddon, C., are adopted as follows:

"This is a suit in equity brought by two judgment creditors of William Morehead, deceased (who purport to sue not only for themselves but for all others of like character), to set aside two deeds to residence properties in the city of Milan Missouri, made by said William Morehead and his wife, Sarah A. (now deceased), to Reuben H. Morehead, his youngest child. No other creditors appear to have joined or participated in the prosecution of the action. Plaintiffs are daughters of said William Morehead, and are full sisters of defendant. The petition is in the conventional form and alleges three separate grounds for setting the deeds aside; (1) Fraud, in that the conveyances were made without consideration and the transfer of the property from father to son rendered the father insolvent and unable to pay his creditors, and his estate is insolvent and unable to pay the demands legally allowed against it; (2) mental incapacity of the father; and (3) undue influence exerted over the father by the defendant son, aided and abetted by the defendant's wife, Nora, and her mother, Sarah A. Morehead, the wife of William Morehead and stepmother of the defendant.

"The answer admits that William Morehead died testate on February 4, 1920; that his executor duly qualified and the estate is in process of administration; admits the execution and delivery of the two deeds in question and their due recording in the proper recorder's office, and denies every other allegation of the petition. By way of defense, the answer alleges that the deeds were made and delivered in part consideration of an oral agreement between father and son that defendant would render to the father and his wife, Sarah A., during their lives, any attention, care, assistance and support they or either of them might need; that said oral agreement was fully performed by defendant; that the father, on April 10, 1912, made a will, in which testator states that he has theretofore made provision for all his children, except defendant, and the said will purports to be pleaded in haec verba, the ninth paragraph thereof devising the real property in controversy to the defendant; that the father had abundantly provided for all of his other children and that it had long been his express will and desire that the property in question should vest in defendant; that, since the execution and delivery of said deeds, defendant has expended $ 2,000 in improvements thereon and in payment of taxes and insurance; that, at the time of the conveyances, the father was perfectly acquainted with his financial condition and that said conveyances were made for an honest purpose and with due regard for the rights of all the father's children and creditors; that said property was the homestead of William Morehead and his wife, Sarah A., and had been for several years prior to said conveyances; and that plaintiffs have a complete and adequate remedy at law, if they have any cause of action at all.

"The reply admits the making of the father's will, but denies the correctness of same as alleged and set out in the answer alleges that, by the making of the two deeds in controversy, due regard was not had by the said William Morehead to the rights of plaintiffs, but that, by the making of said deeds and other certain bills of sale thereafter by said William Morehead to defendant and his mother-in-law, Sarah A. Morehead, all of which were voluntary and without consideration and in fraud of the rights of plaintiffs and other creditors, the...