Gerkey v. Hampe

• Decision Date: 14 July 1925
• Docket Number: No. 19010.,19010.
• Citation: 274 S.W. 510
• Parties: GERKEY v. HAMPE, Public Administrator.
• Court: Missouri Court of Appeals

274 S.W. 510

GERKEY v. HAMPE, Public Administrator.

No. 19010.

St. Louis Court of Appeals. Missouri.

July 14, 1925.

Rehearing Denied July 21, 1925.

Appeal from St. Louis Circuit Court; H. Hartman, Judge.

"Not to be officially published."

Suit by Lewis K. Gerkey against Otto A. Hampe, Public Administrator, in charge of the estate of John L. Gerkey, deceased. Decree for plaintiff, and defendant appeals. Affirmed.

Aug. M. Brinkman and Albert E. Hausman, both of St. Louis, for appellant.

Geo. E. Booth, of Kansas City, and Charles E. Morrow and Samuel I. Sievers, both of St. Louis, for respondent.

DAVIS, C.

This is a suit in equity, seeking to follow trust funds. It is based on the appropriation of trust funds belonging to plaintiff, in the hands of and by plaintiff's curator, his father, who used them in his business, thereby enlarging his estate. The petition prays that the funds by which the estate was enlarged be impressed with a trust in favor of plaintiff. From a decree and judgment for $4,251.32 in favor of plaintiff, defendant appealed.

The petition alleges, in substance, that plaintiff's father, John L. Gerkey was his curator; that his father died October 3, 1921, and plaintiff was appointed his administrator, acting as such until March 10, 1922, then resigning; that defendant, public administrator, after the resignation, qualified and took charge of plaintiff's father's estate; that plaintiff became 21 years of age on September 23, 1921, his father dying without making a final settlement as curator of plaintiff to the probate court of Jackson county, Mo., which court appointed him curator; that plaintiff's father appropriated the funds and property of plaintiff held by him as curator to the value of $4,251.32, and used same in his business without any authority so to do, the same going into and becoming a part of the father's estate, enlarging and increasing it; that the father mixed and intermingled the said $4,251.32, the funds of plaintiff appropriated, with his own estate; and that the same thereby became impressed with a trust in favor of plaintiff.

Defendant's answer denies specifically all the allegations of the petition, and pleads that John L. Gerkey, about January 4, 1921, opened a retail shoe store at 5986 Easton avenue, St. Louis, Mo., conducting same until his death, October 3, 1921; that during all this time plaintiff was associated directly with the management and operation of said business and knew that his father was obtaining credit relative to the store upon the appearance of wealth, solvency, contents, and stock of goods; that plaintiff, to enable his father to procure shoes on credit, stated to a credit agency that the assets in said store amounted to $16,300, also stating same to shoe dealers to induce them to give credit, the shoe dealers relying on said statement and selling and delivering shoes to said John L. Gerkey; that the shoes were in the store at the date of his death unpaid for; that the creditors proved their claims in the probate court against his estate; that plaintiff knew that the creditors were advancing credit to his father because of the representations made by plaintiff; that, while plaintiff knew that his father was carrying on the business as his own, yet he failed and neglected to advise the creditors of the fact that his father was doing business on the capital of plaintiff, and by reason of his silence the creditors were misled and caused to sell shoes and other merchandise on credit to John L. Gerkey, to their damage and prejudice.

The reply pleads that, prior to September 23, 1921, plaintiff was a minor; that he resigned as administrator March 10, 1922, defendant being appointed; that on March 16, 1922, plaintiff made his final settlement in the probate court, which was approved, and that plaintiff was ordered to pay a balance of $6,518.85 to defendant, as administrator de bonus non, which plaintiff paid; the judgment becoming res judicata against defendant.

The facts are substantially as follows:

Plaintiff was the son of John L. Gerkey, both residing in Independence, Mo., until the fall of 1920, when they removed to St. Louis. Plaintiff inherited an estate from his mother, and in 1916 the probate court of Jackson county appointed his father curator of plaintiff, who was then 16 years of age. The assets of the minor's estate, as shown by the settlement of November 20, 1920, consisted of three notes, aggregating $2,900, and a balance of $1,352.15 in cash.

On December 6, 1920, the contents of a shoe store and the fixtures at 5986 Easton avenue, St. Louis, were purchased from L. Landau for $10,446.24, which transaction was closed January 7, 1921. On January 3, 1921, $2,900 of this sum was obtained by pledging the three notes mentioned above with the First National Bank of Wellston. An additional $1,690.45 was deposited in the same bank on January 3, 1921, making a total deposit of $4,590.45. On December 6, 1920, $4,400 had been deposited. When the three notes of $2,900 pledged as collateral were paid in February, 1921, by the makers, the proceeds thereof were credited by the said bank on the collateral note, which was signed John L. Gerkey, guardian for Lewis K. Gerkey, and also by Lewis K. Gerkey individually, although he was a minor at that time. On January 3, 1921, the same day that the collateral note for $2,900 was executed, three additional notes were made to the First National Bank of Wellston, and were signed Gerkey Shoe Company, by John L. Gerkey— one for $250, due in 30 days; one for $500, due in 60 days; and one for $1,000, due in 90 days. The proceeds of these three notes, presumably less discount, aggregated $1,690.45, credited to John L. Gerkey on the bank's books and above referred to. On John L. Gerkey's death this indebtedness had been reduced to $1,650. The source of the $4,400 deposited on December 6, 1920, is not disclosed by the testimony.

An unsigned carbon of a letter dated January 8, 1921, was received in evidence over defendant's objection. This letter, attributed to John L. Gerkey, stated that $4,400 of the total investment of $10,446.24 paid for the store was money belonging to Lewis K. Gerkey, and that he was to have a 44 per cent. interest in the business, to be held for him until he was 21 years of age; that meanwhile he was to have a drawing account of $100 per month, to be deducted from his share of the net proceeds earned up to his birthday; that Lewis was managing the business.

The oral testimony tended to show that Lewis was working as a salesman in the store at a salary of $25 per week; that he arranged the loans at the bank relative to which the notes in the hands of his father, held as curator and belonging to plaintiff, were pledged; that he gave and signed a financial statement to Bradstreet's Agency in 1921, stating that the assets of the shoe store were $16,300, with an indebtedness of $700; that he arranged all loans at the bank; that he visited the wholesale shoe houses and made purchases of shoes; that he became of age September 23, 1921; that his father died about October 3, 1921; that up to the date of his father's death, and afterwards, he conferred with creditors with reference to financing the store; that immediately after his father's death he applied for and obtained letters of administration on October 12, 1921, obtaining an order to continue the shoe store business, and continued to operate the business until November 23, 1921; that he obtained an order authorizing him to sell the business and stock of shoes for the gross sum of $7,800; that he procured allowances for operating the store to the extent of $50 a week, for the purchase of a stove, and for an allowance to his attorney, turning over to his successor the sum of $6,518.80.

A number of items were allowed against the estate of John L. Gerkey, ranging from $1,855.90 down to an item of $3.60, the allowed demands aggregating $8,175.56 for goods purchased. In addition, John L. Gerkey owed the bank $1,650 for money borrowed. Goods to the value of $392 were delivered on November 2 and 7, 1921, after the death of the father, and during the course of administration.

From an inspection of the books of John L. Gerkey, it appears that $20,060.94 worth of shoes were purchased, and the amount paid thereon was $11,631.51, leaving a balance due of $8,429.43 to creditors for goods purchased. Other pertinent facts will later appear in our discussion of the points raised.

I. Defendant contends the trial court erred in allowing witness Hiemenz, because he was the agent of the vendor in the sale of the store, to testify to matters relating to said sale to John L. Gerkey, for that Gerkey was dead. Defendant submits that, when one party to a contract is dead and the other is represented by an agent, said agent is incompetent to testify to the terms of the contract. We question that even the vendor had an interest in the result of this suit, so as to disqualify him as a witness. In Wagner v. Binder (Mo. Sup.) 187 S. W. 1128, it is held that the true test of interest of a witness is: Will he either gain or lose by the direct legal operation and effect of the judgment, or will the record be legal evidence for or against him in some other action? However, treating the vendor, for the purposes of this discussion, as an incompetent witness, yet we hold, under the last ruling cases in this state, that his agent in the transaction was a competent witness.

In Wagner v. Binder (Mo. Sup.) 187 S. W. 1128, it was held that an agent of plaintiff, who was not a party to the suit, was not disqualified from testifying to conversations with a deceased defendant regarding the value of plaintiff's stock. This case was followed by Signaigo v. Signaigo (Mo. Sup.) 205 S. W. 23, Rauch v. Metz (Mo. Sup.) 212 S. W. 357, Allen v. Jessup (Mo. Sup.) 192 S. W. 720, Orthwein v. Nolker, 290 Mo. 284, 234 S. W. 787, Darby v. Life Ins. Co., 293 Mo. 1, 239 S. W. 68, 21 A. L. R....