Dillard v. Owens

• Decision Date: 05 July 1938
• Docket Number: No. 5896.,5896.
• Citation: 122 S.W.2d 76
• Parties: DILLARD et al. v. OWENS et al.
• Court: Missouri Court of Appeals

122 S.W.2d 76

DILLARD et al. v. OWENS et al.

No. 5896.

Springfield Court of Appeals. Missouri.

July 5, 1938.

Rehearing Denied December 5, 1938.

Appeal from Circuit Court, Scott County; Frank Kelly, Judge.

"Not to be published in State Reports."

Suit by F. M. Dillard, as trustee of the funds and property of Aletha Owens, and others, minors, and others against Deller Owens, H. D. Smith, and another, wherein Brodie Owens was brought in as a party defendant by amendment, to trace trust funds into three tracts of land and to satisfy the trust by selling the land. Suit was dismissed as to H. D. Smith, when he disclaimed interest in subject matter of the litigation. From an adverse decree, the defendants appeal.

Affirmed.

Corbett & Peal, of Caruthersville, and E. F. Sharp, of New Madrid, for appellants.

Ward & Reeves, Von Mayes, and N. C. Hawkins, all of Caruthersville, for respondents.

ALLEN, Presiding Judge.

This is a suit in equity in which it is sought to trace trust funds into three tracts of land in Pemiscot County and to satisfy the trust by selling the land.

The plaintiffs are F. M. Dillard, who is the trustee of the funds and property of three minor children, Aletha Owens, Geraldine Owens and Billy Jo Owens; and their mother, Ethel Owens, individually and as natural guardian and next friend of the children. The defendants are Deller Owens, M. C. Owens and Brodie Owens. The suit was dismissed as to H. D. Smith, brother of Deller Owens, when he disclaimed any interest in the subject matter of the litigation. Deller Owens and M. C. Owens are husband and wife. They are the paternal grandparents of the three minor children and the mother-in-law and father-in-law of Ethel Owens. They are the parents of D. L. (Dallas) Owens whose life insurance money is the subject of this suit. Brodie Owens is the son of Deller and M. C. Owens and the uncle of the three children. Another suit between some of the same parties and their relatives was decided by this court in June, 1937. Owens' Estate v. Owens, Mo.App., 107 S.W.2d 150.

D. L. Owens, the father of the three minor children, had two life insurance policies, one for $2,000 and one for $5,000 in which his executor or administrator was the beneficiary. Just before he died of cancer in November 1931 he changed the beneficiary to Deller Owens, his mother, who collected $6,695 from them upon his death.

Within a short time the three minor children — the oldest being about ten years of age at the time — brought a suit against Deller Owens in the Circuit Court of Scott County and obtained a judgment decreeing that she had collected and held the $6,695 as trustee for the children and that she had no right, title or interest in the funds personally but had been made beneficiary of the two life insurance policies for the purpose of collecting them and spending the proceeds for the education, maintenance and support of the children. Subsequently the minors brought a suit against Deller Owens as trustee for an accounting of the trust funds. She filed an answer and an accounting which the trial court disallowed except for items totalling $342.74 leaving a balance due the trust estate of $6,352.76.

In February 1936 the present suit was instituted against M. C. Owens, Deller Owens and H. D. Smith. The plaintiffs' petition alleged the trusteeship and that the defendants M. C. and Deller Owens owned two tracts of land — Tract No. I consisting of 100 acres and Tract No. II consisting of 38.95 acres. As to Tract No. I they alleged that the defendants had placed a deed of trust on the land in favor of H. D. Smith to secure a fictitious loan for $8,000. That M. C. and Deller had conspired together to use and had used the trust funds by paying a note securing a deed of trust signed by them as to Tract No. I in the principal sum of $1,296 and $479.73 interest or a total of $1,775.73. That they had used the trust funds to pay a note securing a deed of trust on Tract No. II signed by them, in the principal sum of $1,871.50 and $617.59 interest or a total of $2,489.09.

By amendment Brodie Owens was made a party to this suit and as to him it was alleged that at the time of D. L. Owens' death he owned certain land in Pemiscot County, called Tract No. III in this suit, and that Brodie claimed title to it under the foreclosure of a second deed of trust to M. C. Owens securing a note of $1,500. In addition, at the time of D. L.'s death there was a first deed of trust on the land to Robert Bussert, securing a $1,394 note signed by D. L. Owens and that Deller Owens paid the note and interest or a total of $1,573.96 from the trust fund. She paid back taxes on this tract from the fund in the amount of $805.98.

The plaintiffs asked to have the deed of trust on Tract No. I securing the $8,000 note set aside. They then asked the court to determine the amount of trust funds expended on the three tracts and to decree the amounts so found to be a lien on the land and that the land be sold to satisfy the liens.

Each of the defendants filed a separate answer. Deller Owens admitted the collection of the insurance policies and that she had spent it on the various tracts of land. She denied, however, that she held the money as a trustee for her son's children. She stated that her son's finances were heavily involved and that he knew his creditors would get the insurance money if it went to his estate and for that reason he made her the beneficiary of his policies knowing that she would use it to the best advantage. He requested her to first pay certain debts to his father and certain of his debts for which his father was surety and particularly to redeem Tract No. III from the two deeds of trust in such a manner that his creditors could not get it.

The separate answer of Brodie Owens and M. C. Owens was substantially the same as that of Deller's. Each of the answers contained separate pleas in abatement on the theory that Brodie Owens was not a party to the original suit and that a prior suit between the same parties alleging the same facts had been filed in Scott County, Missouri, and was then pending after a change of venue in Pemiscot County and that therefore the court had no jurisdiction to try the instant case. They had previously filed motions to strike and pleas in abatement.

Before the instant case was decided the plaintiffs put in evidence a judgment of dismissal of the case pending on change of venue from Scott County.

The plaintiffs filed a reply pleading the two prior suits and judgments in which Deller Owens had been declared a trustee and required to account for the proceeds of the two insurance policies as res adjudicata.

The plaintiffs offered in evidence the judgment of the Circuit Court of Scott County, decreeing Deller Owens to be a trustee of the $6,695 for the benefit of the three minor children and removing her as trustee.

They then called Deller Owens and by her proved the relationship of the parties and the ownership of the three tracts of land. She admitted that the $8,000 note to her brother was fictitious but claimed that she and her husband actually owed him $600. She admitted paying the taxes and paying off the deeds of trust on Tracts I and II from the insurance money. She stated that her husband knew that these debts were being paid from the insurance money. She claimed that both debts or notes were the debts of her son, D. L. Owens, though he had not signed the notes. She admitted paying the back taxes and redeeming Tract No. III from the Bussert note and deed of trust. She stated that as to this tract her son had given his father, M. C. Owens, a note for $1,500 secured by a second deed of trust which was foreclosed and bought in at the sale by her son Brodie for $30, shortly after he became twenty-one years of age. She satisfied the first deed of trust after the foreclosure sale. About the same time she paid the back taxes in the sum of $805.98.

The defendants offered to prove by Deller Owens, M. C. Owens, Brodie Owens, Elmer Peal — who had been D. L. Owens' attorney — and a nurse that D. L. Owens changed the beneficiary clause in his insurance policies to keep his creditors from getting it and because of the fact that his wife was young and might marry again and his family wouldn't get much benefit from it; that he owed his father about $4,000 and wanted him to be paid. In short, they offered to prove that Deller Owens was not a trustee but that she had been made beneficiary without any restrictions and that the money belonged to her to use as she saw fit.

The trial court excluded this offer of proof on the theory that the two prior suits declaring Deller Owens to be a trustee and requiring her to account were res adjudicata as to whether or not she was a trustee for the benefit of the three children and bound to account. He was of the opinion that the judgments were conclusive as to M. C. Owens and Brodie Owens as well as to Deller Owens.

M. C. Owens testified that his deceased son, D. L. Owens, owed him about $2,200. He stated that the three children were entitled to about $4,000 and that he and his wife had offered them a deed to Tract No. III but they wouldn't take it. He claimed that Tract No. III was foreclosed under the second deed of trust and redeemed from the first deed of trust so as to invest the insurance money for the benefit of Dallas' wife and three children. He testified that Brodie so understood it because all three of them had talked it over. Brodie bought Tract No. III in at the foreclosure sale for $30.

In Owens' Estate v. Owens, Mo.App., 107 S.W.2d 150, loc. cit. 155, M. C. Owens testified that his wife received the insurance money to be held and used as a trust fund for the children of D. L. Owens.

The trial court entered a decree finding that Deller Owens had refused to account as trustee and that she was insolvent. The court found the exact amount which had been expended from the insurance money on each tract of land and...