Green v. Wilks

• Decision Date: 10 November 1937
• Docket Number: No. 34396.,34396.
• Citation: 109 S.W.2d 859
• Parties: GREEN v. WILKS et al.
• Court: Missouri Supreme Court

109 S.W.2d 859

GREEN v. WILKS et al.

No. 34396.

Supreme Court of Missouri, Division No. 1.

November 10, 1937.

Appeal from Circuit Court, Dunklin County; James V. Billings, Judge.

Suit by Mrs. J. E. Green against George L. Wilks and another, wherein the named defendant filed an answer in the nature of a cross bill seeking affirmative relief. Decree for complainant, and defendants appeal.

Affirmed.

Ward & Reeves and Corbett & Peal, all of Caruthersville, for appellants.

Bradley & Noble, of Kennett, and C. G. Shepard, of Caruthersville, for respondent.

HYDE, Commissioner.

This case was commenced as an action in equity seeking to prevent advertisement of sheriff's sale of land in Pemiscot county, to which plaintiff claimed title. Her petition alleged that this would be a cloud upon her title, and asked for an order enjoining a threatened sale under execution against plaintiff's brother W. P. Robertson. Defendant Wilks, the judgment creditor of Robertson, thereafter filed answer in the nature of a cross bill seeking the affirmative relief of cancellation of warranty deeds, from W. P. Robertson to plaintiff (under which plaintiff claimed title), as fraudulent conveyances. Cancellation of a trust deed from plaintiff and her husband to Dollye Robertson, wife of W. P. Robertson, was also asked. The court entered a decree denying such cancellation and declaring plaintiff to be the owner in fee simple of the land; and also permanently enjoining sale thereof by Robertson's judgment creditor Wilks. Defendants have appealed from this decree.

The question of jurisdiction of this court was raised upon oral argument. The basis of jurisdiction must be that title to real estate is directly involved. The action which plaintiff commenced did not thus involve title because it only sought to prevent defendants (the judgment creditor and the sheriff) from doing certain acts, and title was only in issue "collaterally or incidentally." Nettleton Bank v. McGauhey's Estate, 318 Mo. 948, 2 S.W.(2d) 771. However, the cross bill filed by the judgment creditor converted the case into a real title controversy, because the affirmative relief sought would (if granted) "destroy (plaintiff's) muniment of title." To do so would take the title from plaintiff and declare it to be vested in Robertson, subject to the demands of his creditors. This court does have jurisdiction in such a case, because the judgment sought "would directly affect title"; and likewise because the judgment rendered will (if upheld) "determine title," to wit, Declare plaintiff to be the owner because the conveyances to her are valid. Nettleton Bank v. McGauhey's Estate, supra.

The deeds sought to be set aside are two warranty deeds to plaintiff, dated and acknowledged on April 15, 1931, and filed for record on April 15, 1931, conveying seven houses and six vacant lots in Caruthersville; and plaintiff's deed of trust of the same date but filed for record a day later, securing a note for $4,830. The warranty deeds were made by W. P. Robertson, plaintiff's brother, and his wife, as grantors, but only Mrs. Robertson was the beneficiary of the trust deed and payee of the note secured thereby. One warranty deed conveyed certain lots subject to three separate first mortgages made in 1926 to the Farm & Home Savings & Loan Association, each of which was given to secure the payment of a $1,600 note on one of the houses and lots described therein, and other lots not encumbered. The other warranty deed conveyed the rest of the houses and lots, on two of which there were first mortgages of $1,000 each, made in 1928, to the Caruthersville Building & Loan Association. Robertson had purchased all of this property from one Carmean, who made all the mortgages during his ownership. These notes had been reduced by monthly payments so that the amount due was considerably less than the original amounts secured.

Defendant Wilks, who seeks to have these conveyances set aside, obtained a judgment on April 4, 1933, against Robertson for $5,084.96 on his liability as indorser of two notes. His suit was filed October 30, 1931, returnable to the March, 1932, term of the Pemiscot circuit court. These notes were both made in 1929 by W. J. Pyle as trustee for F. M. Dillard and by W. J. Pyle personally and were indorsed on the back by Robertson. Each note was for the principal sum of $2,637.50. A payment of $1,000 had been made in 1929, another payment of $500 was made in 1930, and an interest payment of $150 on February 6, 1931. It was shown that Dillard operated a store in another town and was indebted to both Pyle and Robertson who operated wholesale grocery companies, as well as to other creditors; that Pyle attempted to operate the store under an assignment for benefit of creditors; and that he borrowed the money from Wilks for that purpose. Robertson filed an answer in Wilks' suit, which was against him alone, setting up that he was an accommodation indorser; that the note was secured by a number of collateral notes, some of which were secured by chattel mortgages and crop mortgages and others by real estate mortgages amounting to double the amount of the notes he indorsed; and that Wilks had made no effort to collect this collateral, from which it was alleged that by diligent action at maturity of the collateral notes sufficient amounts could have been collected to have paid the whole debt.

Plaintiff first showed her record title. Then evidence was produced by defendants to show these transactions fraudulent. This consisted mainly of the record transactions, the deposition of plaintiff taken shortly after this suit was begun on April 29, 1933, subsequent dealings with the building and loan companies, and the bank accounts of Mrs. Robertson for a period of about 10 years prior to the making of the conveyances attacked. These matters and the facts and circumstances and inconsistencies relied upon by defendants will be referred to and discussed, after stating the Robertsons' version of the transaction, accepted by the trial court as the basis for its findings.

After defendants closed, plaintiff's husband, Mr. and Mrs. Robertson, and other witnesses testified on behalf of plaintiff. Their evidence tended to show the facts hereinafter stated. The Robertsons were married in 1912. Mrs. Robertson had worked prior to that time for 8 or 9 years as saleslady and cashier in stores in Tupelo, Miss., Memphis, Tenn., and Forrest City, Ark. She received from $75 to $100 per month and during a considerable part of this time lived with relatives without paying board. She said that she saved and invested much of this money but what this amounted to was never definitely shown. She did, however, receive $4,000 from her grandfather in 1906 and she invested this with her other savings in cattle with her brother-in-law in Mississippi. They shared profits equally in the cattle deal, and she said this amounted to about $2,000 over a period of several years. Thereafter, in 1912, she received other property by inheritance from her mother amounting to $4,000 in cash and $1,500 in real estate. When she married Robertson they lived in the town of Deering for about 8 years and during that time kept a dairy as her own separate occupation and also kept boarders. She said that she loaned her husband $1,000 out of the dairy money in 1917 and that she had loaned him $3,500 out of her own money in 1913. Their testimony was that he used the first loan to buy land and the second to buy cattle. Her books showed the $3,500 loaned in three separate amounts at different times, namely, 1913, February 10, $1,200; April 20, $1,000; and July 26, $1,300. She also said that she made loans from her own funds to other people. Her account books to show the transactions with her husband and other people, as well as her dairy and other accounts, were in evidence before the trial court. They are not copied in defendants' abstract of the record, but certain parts of them are brought up by plaintiff in an additional abstract. They showed that after the Robertsons moved to Caruthersville in 1921 she made additional loans to her husband of $4,000 in 1923, $7,100 in 1925, $1,000 in 1928, and $2,997 (which she first testified orally was for $3,000) during November and December, 1929, and January of 1930. The agreement stated between the Robertsons was that he was to pay his wife 6 per cent. interest. The occasion for the Robertsons' moving to Caruthersville was that Mr. Robertson was elected sheriff of Pemiscot county in November, 1920. Living quarters were provided for the sheriff near the jail and courthouse. Mrs. Robertson took over the feeding of prisoners, from which she said she made a profit of between $7,000 and $8,000 during the 4 years. She had an account of receipts and expenses concerning this which was kept in the account books produced by her. These showed, as to the business of feeding prisoners, receipts for 1921 totaling $2,882.55, with expenses of $1,463.53, and for 1922 total receipts $3,295.88, and total expenses $1,542.82. These accounts for 1923 and 1924 were also in her books, produced at the trial, but are not shown in the record here.

The occasion for the $4,000 loan to her husband in 1923 was the purchase of a wholesale grocery business and the organization of the Scott-Robertson Grocer Company. Mr. Robertson organized this company with a capital stock of $19,000, representing 38 shares of the par value of $500 each. Scott paid in $9,000 and the Robertsons $10,000. Mrs. Robertson bought $4,000 of the stock in addition to loaning her husband that amount. She also served as one of the directors of the company. In 1925 Robertson bought up the Scott stock, which Scott had put up as collateral for notes with several different parties. This was the occasion for the 1925 loans amounting to $7,100. These were made in the following separate amounts at different times, to wit: May 4, $2,500; June 12, $2,400; June 20, $1,000;...