Gill v. Newhouse

• Citation: 192 S.W. 431
• Decision Date: 02 February 1917
• Docket Number: No. 17626.,17626.
• Parties: GILL v. NEWHOUSE et al.
• Court: United States State Supreme Court of Missouri

192 S.W. 431

GILL v. NEWHOUSE et al.

No. 17626.

Supreme Court of Missouri, Division No. 2.

February 2, 1917.

Appeal from Circuit Court, Jackson County; O. A. Lucas, Judge.

Action by Charles S. Gill, trustee in bankruptcy of the estate of Jacob Newhouse, against Dena Newhouse and others. Decree for defendants, and plaintiff appeals. Affirmed.

See, also, 178 S. W. 495.

This is a proceeding in equity instituted by the trustee in bankruptcy of the estate of Jacob Newhouse to set aside two deeds whereby it was alleged that said Jacob Newhouse, in fraud of his creditors, transferred to his wife, Dena Newhouse, defendant herein, the title to lot 9 and the south half of lot 8, block 23, Dundee Place, an addition to Kansas City, Mo. From a decree in favor of the defendants, entered in the circuit court of Jackson county, the plaintiff has duly appealed.

The petition, in substance, alleges that Jacob Newhouse filed a voluntary petition in bankruptcy on February 16, 1911, and was thereafter adjudicated a bankrupt, and the plaintiff, Charles S. Gill, was duly elected trustee in bankruptcy of said estate; that, on July 17, 1905, said Jacob Newhouse, together with five other persons and the Black Cat Mining Company, executed their certain promissory note in the sum of $4,000, payable to the order of the Exchange Bank in Webb City, Mo., due 90 days after date at 8 per cent. per annum; that said note was duly indorsed by said bank and delivered to J. C. Stewart, upon whose death the title to said note passed to his executrix, Hortense D. Stewart; that, on January 31, 1911, said Hortense D. Stewart, as executrix, recovered judgment against said Jacob Newhouse et al., in the circuit court of Jackson county, Mo., in the sum of $5,869.64, being the amount of principal and interest on said note then remaining due and unpaid; that no part of said judgment has been paid; that said judgment is the only claim scheduled by said Jacob Newhouse as a liability against his bankrupt estate; that on January 8, 1906, six days before the maturity of said note, said Jacob Newhouse was the owner of the real estate above described, and for the purpose of defrauding, hindering, and delaying his creditors in the collection of their debts, and particularly the debt above mentioned, conveyed said real estate to his son Stanley Newhouse, and on said date said Stanley Newhouse, attempting to assist his father in so defrauding his creditors, conveyed said property to his mother, Dena Newhouse, one of the defendants herein; and that said Dena Newhouse received said property without consideration and for the purpose of defrauding his said creditors; that none of the persons at any time having an interest in said note had any knowledge of the transfer of said property until February 20, 1911, and that on the 13th of March, 1911, suit was instituted in the circuit court of Jackson county to set aside said conveyances; later said suit was dismissed, without prejudice, on the 20th of September, 1911 (this suit was instituted October 23, 1911); that by said conveyances Jacob Newhouse departed with all of the property which he then owned, and thereby became, and has since remained, insolvent and unable to pay his debts; that the estate of said bankrupt is insolvent and has no funds to pay such indebtedness now owned by said Hortense D. Stewart, executrix. Plaintiff prays that both of said conveyances be set aside, and that the judgment of said Hortense D. Stewart, executrix, against Jacob Newhouse be declared a lien upon said property.

The separate answer of defendant Dena Newhouse admits the bankruptcy and the official title of plaintiff trustee. The answer also contains a general denial, and further alleges that the defendant purchased said property on the 28th day of April, 1887, with funds that belonged to her sole and separate estate which she had received and inherited from her mother and her mother's estate between the years 1877 and 1885; that her husband, Jacob Newhouse, acted as her agent in making such purchase, and, through an inadvertence and oversight and without the knowledge and consent of the defendant, the deed was executed to herself and her husband, Jacob Newhouse, jointly; that defendant Jacob Newhouse never had claimed any interest in said property, but that the same was the sole and separate property of the defendant; that she never gave her verbal or written consent to her husband, Jacob, to appropriate to his own use any of the funds received by her from her mother or her mother's estate; that Jacob held the title to said property in trust for the sole use and benefit of the defendant until the 8th day of January, 1906, at which time, for the purpose of having legal title fixed in this defendant, her husband made a deed passing the title to Stanley Newhouse, her son, who thereupon, on the same day, conveyed the same to this defendant; that immediately after the purchase of said property in 1887, defendant took possession of said property, and she and her husband occupied the same as their homestead, and that said property had ever since been their homestead, and had never been abandoned as such. The answer also sets up the defense of laches, and denied that the note was ever indorsed by the Exchange Bank of Webb City, and denied that Hortense D. Stewart, executrix, ever became the owner of said note. It is further alleged that Jacob Newhouse was not indebted to said Hortense H. Stewart, executrix, or to said J. C. Stewart at the time of the transfer of said property, and that the indebtedness against Jacob Newhouse upon which plaintiff prosecutes this action did not originate until January 31, 1911. The answer prays that title to said premises be quieted in defendant, and that plaintiff be decreed to have no right, title, or interest therein. The separate answers of the other defendants do not materially differ from the foregoing.

Plaintiff's reply contains specific denials of the allegations set forth in the answer.

The evidence upon the part of the plaintiff was as follows: The $4,000 note, executed by Jacob Newhouse and others, dated July 17, 1905, indorsed in blank by the payee on the back thereof, was introduced in evidence, as was also the petition showing suit instituted upon said note and judgment thereon in the circuit court of Jackson county. Plaintiff further introduced in evidence the following deeds, to wit: Warranty deed, executed April 28, 1887, by John B. Hibben and Nellie S. Hibben, conveying the land above described to Jacob Newhouse and Dena Newhouse, as husband and wife — the deed recites that it is given subject to a deed of trust in the sum of $2,000, dated 1886, which the grantees assume and agree to pay — warranty deed, dated January 8, 1906, executed by Jacob Newhouse, conveying said property to Stanley Newhouse, reciting a consideration of $900; warranty deed, dated January 8, 1906, executed by Stanley Newhouse, conveying said property to Dena Newhouse for a recited consideration of $900.

Plaintiff placed defendant Jacob Newhouse upon the stand, and, after identifying certain signatures by him, also proved by him that he received no consideration for the deed to Stanley Newhouse, and that he owned no other property at the time the deed was made, and had no property after the deed was made. Plaintiff further offered to show by this witness that prior to this conveyance he had a bank account in his own name, but that after this conveyance he carried his account in his wife's name, and issued checks thereon the same as he had before on his own account. This offer was rejected, and plaintiff saved an exception.

On cross-examination this witness testified that he and defendant Dena Newhouse were married in 1874 and moved to Kansas City in 1880, bringing with them Mrs. Bettie David, the widowed mother of his wife; that his wife was the only child of Mrs. David; that Mrs. David brought with her about $10,000 in money and gave money at different times to her daughter Dena Newhouse; that in 1882, defendant, acting as agent for his wife, invested some of her money in the Colby Mill & Lumber Company of California; that the property involved in this suit was purchased with his wife's money in 1887, $3,000 of the purchase price being paid in cash and $2,000 being assumed in the nature of a mortgage indebtedness on the place; that the mortgage was afterwards paid off with his wife's money; that his wife first negotiated for the purchase of the property, and that then, as her agent, he carried out the final purchase of the same; that he did not know how the deed happened to be made to him and his wife, jointly; that Mr. Louis Krauthoff acted as attorney in the matter; that he did not pay any of the purchase price of said...