Jones v. Jones
| Decision Date | 15 May 1934 |
| Citation | 254 Ky. 475 |
| Parties | Jones et al. v. Jones. |
| Court | United States State Supreme Court — District of Kentucky |
10. Fraudulent Conveyances. — Transfer of property in anticipation of, or during pendency of, suit against transferor, and continued possession by grantor after transfer, are badges of fraud.
11. Fraudulent Conveyances. — When conveyance is attended with badges of fraud, burden of proving good faith shifts to one defending its integrity, and in such case grantee's failure to produce available explanatory evidence becomes in itself additional badge of fraud.
12. Partnership. — In suit for receiver for, and settlement of, partnership, evidence held to sustain finding that defendant partner's conveyance of his interest in partnership's farm one day after commencement of suit was fraudulent.
13. Court Commissioners. — In suit to settle partnership, referred to special commissioner, allowance of fee to commissioner held error where there was no affidavit or proof as required by statute (Ky. Stats., sec. 396).
Appeal from Livingston Circuit Court.
CHARLES FERGUSON for appellants.
C.H. WILSON and J.D. MOCQUOT for appellee.
Reversing.
The record in this case is not a chapter or a book. It is a work of twenty volumes, recording a bitter conflict among three brothers arising from the operation of and an effort to settle a farm partnership venture. In the main two of the brothers are on the same side of the battle alignment. A fourth brother, who essayed to act as peacemaker in the role of an agreed arbitrator, became involved in the quarrel also, although not in a financial way. The attorneys have stood loyally by their respective clients and have employed every legitimate weapon of legal warfare and exhausted all available ammunition. There is presented a voluminous and confusing record, containing much concerning the private quarrels that have no place in it. We have already written one chapter in the case in sustaining the appointment of a receiver for the property. Jones v. Jones, 229 Ky. 71, 16 S.W. (2d) 503.
In 1924 or 1925 the partnership was formed by Dr. F.A. Jones, D.F. Jones, and their brother-in-law, W. S. Watson, to farm and raise stock on a tract of 344 acres of an island in the Tennessee river, lying in both Livingston and Lyon counties. Not long thereafter O. W. Jones purchased Watson's interest, and the firm became known as Jones Brothers. D.F. Jones was a farmer living eight or ten miles from the property. Dr. F.A. Jones was a practicing physician residing in Paducah, which is about twenty-five miles from the island. O.W. Jones was a school teacher and lived in Florida. It seems to have been agreed that D.F. Jones should have active management of the firm. Dr. Jones personally advanced money to the partnership and made loans to his brothers. After a brief period the venture became unprofitable, due to high water flooding the property, and perhaps other causes, so there was a loss of approximately $12,000. Distrust arose among the partners, and on June 10, 1927, it was agreed in writing that a fourth brother, Charles M. Jones, who was a school superintendent in Florida, should wind up the affairs and settle the difficulties. It was contemplated that this would be done promptly, but there was great delay, and, as indicated in the former opinion, considerable acrimony developed, particularly between Dr. Jones and the arbitrator, whom he accused of unfairness and prejudice. A partial report was made by the arbitrator, which was unsatisfactory to Dr. Jones, and he filed this suit for a receiver and to have the court settle the partnership. The receiver was appointed several months later. In the meantime the arbitrator proceeded with his work, and a few days after the appointment of the receiver he made what he deemed a "final audit," which showed that O.W. Jones owed F.A. Jones $355.08, and that Dr. F.A. Jones owed D.F. Jones $160.14. But we affirmed the chancellor's action in appointing the receiver and putting him in charge of the property. This was upon the ground that an arbitration agreement is revocable before a final award and that the bringing of the suit was a revocation. Finally, the case was referred to a special commissioner, who was also the receiver.
The commissioner's report set forth in detail the various charges and credits against and in favor of the parties. Numerous specific exceptions were filed to that report by all parties. The judgment dissolved the partnership and declared a settlement. All demurrers, motions, and exceptions were overruled and the commissioner's report was substantially confirmed.
Dr. F.A. Jones was awarded judgment against D. F. Jones in the following amounts: For one-third of the vendor's lien notes aggregating $3,810.15, i.e., for $1,270.05, and his undivided one-third interest in the property was ordered sold in satisfaction; for $3,999.10 on account of twelve certain unsecured notes; for one-half of three notes aggregating $2,960.60, i.e., $1,480.30, which had been executed by D.F. Jones and W.S. Watson, jointly; and for $169.05 as the net sum due in the settlement of the partnership account. F.A. Jones was awarded judgment against O.W. Jones for one-third of the vendor's lien notes, i.e., $1,270.05, and his interest in the land was ordered sold in satisfaction; for $1,370.13, the aggregate of three individual unsecured notes; for $1,076.39 on account of the partnership. Judgment was awarded D.F. Jones against O.W. Jones for $907.34 on that account. These sums represent the principal of the debts, the interest from various dates being in addition. N.D. Washburn, who had been a tenant in the partnership, was adjudged to own an undivided half interest in certain personal property on the farm. It was held that he owed the firm $126.77, and this property was ordered sold in satisfaction thereof. About the time of the breaking up of the partnership D.F. Jones had conveyed his interest in the land to C.W. Cothron. This conveyance was set aside as fraudulent. A fee of $1,000 was allowed the attorneys of Dr. Jones for legal services rendered him as plaintiff in this action which was ordered taxed as part of the court costs. The special commissioner was allowed $750 for his services up to the time of the judgment. He was ordered to reduce to cash the personal property reported to be in his possession at the time and to make a report at the next term of the court. Condemning the record as far too large and holding that Dr. F.A. Jones and D.F. Jones were responsible for it, the court ordered that each should bear two-fifths of the cost and O.W. Jones one-fifth.
The correctness of that judgment, both in what it allows and disallows by ignoring the claims submitted, is now before us. Dr. F.A. Jones has no cross-appeal and his affirmative claims are not to be considered. The case presents but few questions of law. The indefiniteness or lack of organization and of any system of accounting, the confusion of private relations of two of the parties with the business of the partnership, together with a mass of conflicting evidence on all of the items, have rendered it impossible for the special commissioner, the trial court, or this court to ascertain with exactness the status of the affairs. The parties cannot reasonably expect it when they have conducted their business in as loose a manner as is disclosed here. Cf. Hume v. McNees, 10 S.W. 384, 10 Ky. Law Rep. 947. The record is filled with conflicting evidence and its recitation would serve no purpose. So, we shall merely state our ultimate conclusions on the respective disputed claims of the appellants as presented in the briefs. Technical questions of practice may be passed by as unsubstantial or nonprejudicial.
The judgment in favor of F.A. Jones against D.F. Jones for...
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