Gehlert v. Smiley

• Decision Date: 14 December 1937
• Docket Number: No. 34339.,34339.
• Parties: GEHLERT et al. v. SMILEY et al.
• Court: Missouri Supreme Court

114 S.W.2d 1029

GEHLERT et al. v. SMILEY et al.

No. 34339.

Supreme Court of Missouri, Division No. 1.

December 14, 1937.

Motion for Rehearing Overruled April 1, 1938.

Appeal from Circuit Court, St. Louis County; Jerry Mulloy, Judge.

Suit by Annie Gehlert and others against Richard S. Smiley and others, wherein certain of the defendants filed cross-bills asking for affirmative relief. From an adverse decree, the plaintiffs appeal.

Affirmed.

Otto & Boyer, of Washington, for appellants.

Stanley A. Sidmon, of St. Louis, and A. E. L. Gardner, of Clayton, for respondents August Loesing and Alice M. Loesing.

Bryan, Williams, Cave & McPheeters, of St. Louis, for respondent Charles F. Winters.

HYDE, Commissioner.

This is an action in equity to set aside certain conveyances, as fraudulent against creditors, and to try and determine title to the real estate described therein. Cross-bills were filed by certain defendants for affirmative relief to determine their title. A referee was appointed and, after hearing the evidence, he made a report upholding the validity of all questioned conveyances. The court approved and adopted the referee's findings, and entered a decree dismissing plaintiffs' bill and declaring title in the defendants who claimed under the conveyances attacked. Plaintiffs have appealed from this decree. Plaintiffs' assignments of error as to the failure of the trial court to consider pleadings amended after trial, and the exclusion of certain parts of a deposition are overruled because these are all in the record here; and, since this is an equity case, this court may consider the same and render such judgment as should have been rendered thereon. Friedel v. Bailey, 329 Mo. 22, 44 S.W.2d 9; Lowe v. Montgomery, 321 Mo. 330, 11 S.W.2d 41; Walther v. Null, 233 Mo. 104, 134 S.W. 993. For reasons hereinafter stated, we would reach the same result upon the final pleadings, which only required a determination of the title of all parties to the land although stated in two counts instead of one.

Plaintiffs were judgment creditors of defendant Richard S. Smiley and one John S. Sidebotham. Their judgment was entered June 4, 1925. The land they claim is 5 acres in St. Louis county, platted as lots 1 to 40, inclusive, of Aviation place. Plaintiffs claim all of this land sold under a sheriff's deed. They had the land sold under execution on their judgment against Smiley and Sidebotham (as land of defendant Smiley), and were the purchasers at the execution sale. Defendants Loesings, Frank, and Kassel (and Winters now substituted for Frank and Kassel) contend that plaintiffs got nothing by their sheriff's execution deed. Conceded source of title, P. L. Dodge, conveyed the land to defendants August Loesing and Alice M. Loesing, husband and wife, on July 8, 1924, for a cash consideration of $6,000. Plaintiff alleged that the Loesings actually took title as trustees for defendant Smiley, who was Mrs. Loesing's brother. At the time of the trial, Smiley and the Loesings were unfriendly as a result of contention over their transaction. Smiley's answer to plaintiffs' petition stated that he "made arrangements to have said real estate conveyed to the defendants August Loesing and Alice M. Loesing in trust for (him)"; and "that defendants August Loesing and Alice M. Loesing, * * * since said date, have held the same in trust for the defendant R. S. Smiley." He asked "that the title to the aforesaid real estate * * * should be divested out of the defendants Loesing (charged with certain sums advanced by them on the purchase price and for improvements)." The Loesings filed a cross-bill claiming ownership to and seeking to have the sheriff's deed to plaintiff set aside as to lots 26 to 40. They claimed that they paid $1,000 of the purchase price from their own funds and obtained the balance on a first mortgage loan from the St. Louis County Bank; and that they sold a half interest therein to Smiley and thereafter divided the land, keeping lots 26 to 40 as their own absolute property. Mr. Loesing testified that he paid for the property; and that Smiley "expected to get half of it when he was able to raise the money to pay half of it."

Smiley testified that he paid $100 "earnest money," and, because he "didn't have the money," persuaded the Loesings to put it in their names and get a loan from the bank; that, of the balance ($900) paid in the first cash payment, he "furnished half the actual balance, and they half"; and that it was understood they "would sell it as a whole and divide the proceeds, share and share alike, over and above expenses 50-50." He said that he arranged the purchase and got half the commission paid by the seller, which he applied on the $900 balance of the original cash payment. Plaintiffs' suit (upon which about a year later they obtained judgment against Smiley) was then pending. Smiley said: "The whole country knew about it (plaintiffs' suit against him); I don't think there was anybody in the county that didn't; I would say Mr. and Mrs. Loesing did know it." Smiley was a judge of the St. Louis county court and local newspapers published several articles about plaintiffs' suit. Some improvements were made after the land was platted into lots, and later lots 1 to 25 were conveyed to Smiley's mother. Mrs. Loesing said they "signed a blank deed to these lots." This deed was made on April 8, 1925. Previously the Loesings had increased their loan at the bank $2,000 (making a total of $7,000) to pay for cottages "started on Lots 10 and 11." Smiley supervised this building and all other improvements on the land. When they finally divided the property, Smiley obtained a loan of $3,500 on the part conveyed to his mother and the proceeds were paid to the Loesings. They got a new $3,500 loan on lots 26 to 40 which they retained. Both of the Loesings denied having knowledge of plaintiffs' suit against Smiley at the commencement of their transactions with him concerning this land.

The referee made the following findings (which the court adopted) concerning the Loesings' part in the transaction, to wit:

"Defendants August Loesing and Alice M. Loesing, his wife, purchased from P. L. Dodge and Esther Dodge a certain tract of ground in the county of St. Louis, state of Missouri, containing 5 acres, more or less, for the sum of $6,000, by paying therefor $1,000 in cash and by executing a deed of trust in the sum of $5,000, which said sum was borrowed through the St. Louis County Bank; that all of said cash, that is, the $1,000, was furnished by defendants August Loesing and Alice M. Loesing, his wife, and that none of said cash was furnished by defendant Richard S. Smiley. * * * That defendants August Loesing and Alice M. Loesing, or either of them, are not, and were not * * * parties to an agreement or arrangement with defendants Richard S. Smiley and John S. Sidebotham, or either of them, by the terms of which said defendants August Loesing and Alice M. Loesing, or either of them, agreed to assist defendants Richard S. Smiley and John S. Sidebotham in defeating the claim and judgment of plaintiffs against said defendants Smiley and Sidebotham, * * * and do not now hold, and never have held, for the use and benefit of said defendants Smiley and Sidebotham, or either of them, the title of lots 26 to 40, inclusive, of said Aviation place, but that said defendants August Loesing and Alice M. Loesing, by virtue of their purchase of said property aforesaid from P. L. Dodge and Esther Dodge, his wife, on July 8, 1924, became and were, and are now as against the plaintiffs and defendants Richard S. Smiley and John S. Sidebotham, or either or all of them, vested with a good and indefeasible title in fee simple to said lots 26 to 40, inclusive, of said Aviation place."

The referee recommended that plaintiffs' bill be dismissed as to the Loesings; that plaintiffs' deed from the sheriff be canceled as to lots 26 to 40; and that the Loesings be declared the absolute owners of said lots; and the decree of the court so ordered. Plaintiffs challenge the weight and sufficiency of the evidence to support these findings in favor of the Loesings and assert that their own evidence was sufficient to show that their whole transaction was fraudulent from the beginning and should be held for naught as a conveyance to them of lots 26 to 40. This contention will not be sustained, because the Loesings' testimony (together with their checks and other documentary evidence which corroborated their claims) was sufficient substantial evidence upon which to base the findings made by the referee and the court as to their good faith and honest purpose. Moreover, regardless of what may have been stated in Smiley's answer, his testimony shows that he never paid more than half of the purchase price, including half the cost of the improvements. Certainly he never intended to buy more than a half interest; and the evidence tends to show that the property was fairly divided, and that the Loesings retained no more than they paid for in the transaction. While in equity cases this court may consider the weight of the evidence on any fact issue, on appeal, it nevertheless will usually defer to findings of the trial court based on conflicting oral evidence of witnesses who appeared before the trier of the facts. We see no reason to find against the Loesings on the issue of good faith. The part of the court's decree, which determines and settles the Loesings' title to lots 26 to 40, must therefore be affirmed.

As to the rest of the land, Smiley testified that his mother took lots 1 to 25 as trustee for him, and that he put the title in her name "because of the law suits pending." She paid nothing for this conveyance. Thereafter by conveyances from Smiley's mother and her grantees the title to lots 1 to 9 and 12 to 25 was vested in one C. F. K. Foye. Smiley said that Foye "did not pay me or my mother anything for the property deeded to him"; that "he...