Kramer v. McCaughey

• Decision Date: 14 February 1882
• Citation: 11 Mo.App. 426
• Parties: ABRAHAM KRAMER ET AL., Appellants, v. FRANCIS McCAUGHEY ET AL., Respondents.
• Court: Missouri Court of Appeals

11 Mo.App. 426

ABRAHAM KRAMER ET AL., Appellants,

v.FRANCIS McCAUGHEY ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Feb. 14, 1882.

1. Trusts in personal property are not within the statute of frauds, and may be established by parol; but the subject-matter and purposes of the trust, and the persons who are to take the beneficial interests, must be clearly ascertained.

2. Trusts in personal property cannot be established by loose, vague, and indefinite expressions or statements of the parties.

3. The fraudulent donee of an insolvent debtor will be treated as a trustee for the creditor of the fraudulent donor.

4. Where the fraudulent donee is a married woman, a judgment creditor of the fraudulent donor is entitled to a decree against the donee and her husband charging them with so much of the judgment as is not in excess of the amount fraudulently received.

5. Where such a decree cannot be enforced by ordinary process, the court should make such supplementary decretal orders as may be necessary to reach the fund.

6. An alleged trust in personal property which the assignor of the property was not bound to make, which rested on understanding only, and which was quite indefinite as to who were to be beneficiaries and in what proportions, will not, as against a creditor of the assignor, sustain the payment of a part of the fund to an alleged beneficiary.

APPEAL from the St. Louis Circuit Court, BOYLE, J.

Reversed and remanded.

DAVID GOLDSMITH, for the appellants.

H. E. MILLS, for the respondents.

THOMPSON, J., delivered the opinion of the court.

The record in this case shows that the plaintiffs, in March, 1879, recovered judgment for $847.48, against John and James McCaughey, on indebtedness contracted in 1876; that John and James McCaughey were brothers; that on October 26, 1878, John McCaughey procured insurance for $5,000 on his own life, payable to his legal representatives; that he never paid any premium thereon; that on November 11, 1878, he assigned the policy to his father, Francis, who agreed to pay the premiums thereon, and did thereafter pay the first quarterly premium, amounting to about twenty dollars; that Francis, on January 23, 1879, assigned the policy to James, who thereupon agreed to keep up the policy, and pay the premiums, and who did thereafter pay the second and third quarterly premiums, with the aid of the mother, who loaned him about five dollars to pay one of them; that these three quarterly premiums were the only ones paid on the policy; that John died in June, 1879; and that in September, 1879, while execution on the judgment was in the sheriff's hands, James collected the insurance money, paid $4,500 thereof to his mother, Sarah McCaughey, and spent the remaining sum of $500 in such a manner that he cannot account for it.

The defence to the plaintiffs' petition is, that, at the times of the assignments of the policy from John to Francis, and from Francis to James, a tacit “understanding” prevailed among the members of the family, that the policy was to be kept up for the benefit of the family; that when John died, he directed or requested that of this insurance money $500 should be paid to his father, $500 to his mother, $1,000 to each of his two sisters, Mary and Sarah, and $2,000 to James, the mother to have the privilege of retaining for herself her two daughters' shares, and that the payment of the $4,500 to his mother was to cover the amounts payable to herself, her husband, her two daughters, and $1,500 which James owed her. It is, however, admitted that the assignments of the policy from John to Francis, and from Francis to James, were in writing, were simple, absolute' and unconditional assignments, and contained no reference to said “understanding,” and that, when they were respectively arranged for and made, no allusion was made by any of the parties to said ““understanding,” or to the manner of the distribution of the insurance money when payable, and all that was said at these times was, that the holder of the policy agreed to assign it, and the assignee agreed to keep it up and pay the premiums thereon. It is likewise admitted, that the alleged understanding was simply that the policy should be for the benefit of the family; that until John's death it never assumed any more definite shape than this, and that “there was no understanding that the policy was for the benefit of the whole family, nor was there any understanding which members should get it, nor how it was to be divided, nor that any particular member should get any fixed share or amount;” that, in point of fact, two brothers of John and James--to wit, Patrick and Owen--were ultimately left without any provision; that John and James have been insolvent ever since 1876, and that at the date of trial their mother had not distributed any of said money paid her by James, but admitted that she still had $2,000 thereof locked up at home.

Three questions arise upon this record. The first relates to the validity of the payment of the $3,000 of the insurance money by James McCaughey to his mother. Was this a good payment upon a valid trust, or was it voluntary as against the existing creditors of himself and his deceased brother John? The second relates to the validity of the payment of the $1,500 of this insurance money, claimed to be a portion of James's share under the family distribution of it, by James to his mother, in satisfaction of an alleged debt, due and owing by him to her. The third is an inquiry as to what remedy, if the plaintiffs' view of the case on either of the preceding questions is adopted, can be given against Mrs. McCaughey, a married woman without any separate estate.

1. Upon the first question we are of opinion that the evidence is not sufficient to establish a trust in respect of the insurance money which James collected for the benefit of the other members of the family, such as is sought to be set up. We concede the correctness of the proposition of the learned counsel for the defendants, that trusts in personal property are not within the statute of frauds, and may be established by parol. Perry on Tr., sect. 86. But while this is so, it is equally true, as in cases of parol trusts in real estate, where such trusts are possible, that “the subject-matter of the trust must be clearly ascertained, as well as the purpose of the trust, and the persons who are to take the beneficial interests. Loose, vague, and indefinite expressions are insufficient to create the trust. If the trust is once created in writing, it cannot be varied by parol, and if it is once created by parol, it cannot be altered or varied by other declarations of the trustee.” Ibid. The evidence by which it is attempted to set up a trust here, does not answer the foregoing conditions. In the first place, the policy of insurance was...