LaGarce's Estate, Matter of, 36129

• Decision Date: 25 November 1975
• Docket Number: No. 36129,36129
• Parties: In the Matter of the ESTATE of August LaGARCE, Deceased. Bertha LaGARCE, Executrix of August LaGarce, Deceased, Plaintiff-Appellant, v. Leona MOULDON and William B. Quinn, Defendants-Respondents. . Louis District, Division One
• Court: Missouri Court of Appeals

Page 511

532 S.W.2d 511

In the Matter of the ESTATE of August LaGARCE, Deceased.

Bertha LaGARCE, Executrix of August LaGarce, Deceased, Plaintiff-Appellant, v. Leona MOULDON and William B. Quinn, Defendants-Respondents.

No. 36129.

Missouri Court of Appeals, St. Louis District, Division One.

Nov. 25, 1975.

Motion for Rehearing or Transfer Denied Jan. 23, 1976.

Application to Transfer Denied March 8, 1976.

Martin Schiff, Jr., Webster Groves, for plaintiff-appellant.

James E. Heckel, St. Louis, for defendants-respondents.

DOWD, Judge.

This case is before us for the second time. It was originally initiated as a discovery of assets proceeding in the St. Louis Probate Court in February 1970. The issue was whether a $7000 savings certificate of the Tower Grove Savings and Loan Association was unlawfully withheld by the defendants.

The probate court sustained a motion for judgment on the pleadings filed by plaintiff-executrix and entered a judgment for plaintiff. Upon appeal to the circuit court a judgment was also entered on the pleadings in favor of plaintiff. Upon appeal to this court, we reversed the judgment and remanded the case with directions to enter a judgment in favor of defendants. The case was then transferred to the Missouri Supreme Court. In Re Estate of LaGarce, 487 S.W.2d 493 (Mo.banc 1972).

The Supreme Court reversed the judgment and remanded the cause to the trial court in a landmark case that revised the prevailing judicial construction of Missouri's joint account statutes, Sections 362.470 and 369.150 RSMo. 1969. The Supreme Court concluded (at 501):

'While we have reached the same result (although on a different theory) as the court of appeals that the judgment should be reversed, we do not agree with the directions of that court to the trial court to enter judgment for defendants. There has been no trial of this case, and no evidence has been taken, since the judgment was on the pleadings. The plaintiff has not yet had an opportunity to offer evidence, if she has any, on the issue as to whether there was any fraud, undue influence, etc., relating to this transaction, which evidence we have stated would be appropriate. The judgment should therefore be reversed and the cause remanded for further proceedings in accordance with the views herein expressed.'

On remand to the circuit court the plaintiff filed a amended petition which asked the trial court (1) to impose a constructive trust on the defendants or (2) to find the savings certificate had been transferred to the defendants in fraud of plaintiff's marital rights. After a lengthy trial the court found for defendants on both counts. We reverse.

The relevant facts will be presented in some detail. An unfortunate series of events began with the separation of Bertha and August LaGarce on August 15, 1969, after twenty-five years of marriage. On that date the plaintiff, Bertha LaGarce, left their home after an argument wherein August told Bertha to leave or he would blow her head off her shoulders and that he had a gun. He also told her to get a divorce.

That same evening August LaGarce went to the bank with his friend John Zakibe. LaGarce removed from his safe deposit box four savings certificates he jointly owned with plaintiff. The four certificates had a total face value of $11,000, and had been issued by the Tower Grove Savings and Loan Association. The certificates had been issued in the years 1951, 1954, 1955 and 1965. August LaGarce told Zakibe he was removing the four certificates because he wanted to change the name on them. The four certificates were in the names of August LaGarce and Bertha LaGarce 'as joint tenants with right of survivorship and not as tenants in common.'

While still at the bank that evening LaGarce closed out the checking and savings accounts totalling about $11,500 that had been in the joint names of August LaGarce and plaintiff. August LaGarce then put the money in checking and savings accounts that were in his name only. LaGarce told Zakibe he was transferring these accounts so that only he could touch those assets.

The next day, August 16, August LaGarce and Zakibe went to the Tower Grove Savings and Loan Association. With the help of Mrs. Mayer, an officer of the association, LaGarce surrendered and cashed in the four savings certificates he had removed from his safe deposit box the previous evening. At August LaGarce's direction Mrs. Mayer used the proceeds to issue two new savings certificates. One certificate in the face amount of $4000 was issued to 'August LaGarce or John Zakibe, Sr.' ¹ The second certificate in the face amount of $7000 was issued in August LaGarce's name. On this occasion LaGarce mentioned his marital difficulties to Mrs. Mayer.

On August 21, 1969, August LaGarce again visited Mrs. Mayer at Tower Grove. With him were Mr. and Mrs. James Mouldon. LaGarce instructed Mrs. Mayer to add the names of Leona Mouldon and James Mouldon to the $7000 certificate. LaGarce told Mrs. Mayer he wanted to change the certificate so that if anything happened to him the certificate would belong to the Mouldons. After Mrs. Mayer changed the certificate LaGarce handed the certificate to James Mouldon. Mrs. Mayer then stated to August LaGarce: 'The way that certificate is now made out, the person holding it can bring it in and cash it at anytime without the signature or consent of the others, and if anyone whose name is on it dies then it will belong to those that are living.' August LaGarce answered, 'Yes, that is the way I want it, and I want them to have it and keep it and if I want it I can get it. I know they won't cash it.' James Mouldon ² replied, 'If he wants it back he can get it.' No consideration was paid by James or Leona Mouldon to have their names put on the certificate. During the August 21 transaction LaGarce again mentioned his marital difficulties to Mrs. Mayer.

During September 1969, LaGarce delivered many assets and important papers to the custody of his attorney, the defendant William Quinn. Quinn was retained by La-Garce from August 30 until September 30 to represent him during his marital troubles. Quinn testified he was given custody of the assets and papers 'to make them inaccessible to his wife Bertha LaGarce, and for the purpose of investment and reinvestment, which was not accomplished.' Nor did Quinn ever transfer or assign any of LaGarce's assets to a third party. In addition to several real estate and insurance papers, the assets entrusted to Quinn included: (1) $7000 in cash; (2) a cashier's check for $1,942.19, endorsed by LaGarce, which represented the proceeds from redeeming U.S. Series E War Bonds; (3) the passbook of the savings account he had opened in his name on August 15 or 18 (the August 29 balance in the savings account passbook was $5,425.29); (4) a Tower Grove savings certificate in face amount of $4000, issued in 1964 to August LaGarce or John Zakibe, Sr., as joint tenants; (5) the Tower Grove savings certificate that was issued on August 16 to LaGarce and Zakibe as joint tenants, with face amount of $4000; (6) a South Side National Bank Certificate of Deposit dated October 25, 1965, in name of August LaGarce or Bertha LaGarce, with principal sum of $5000; and (7) South Side National Bank Stock Certificates, registered in the name of August LaGarce, valued at $6800. The assets transferred to Quinn thus totalled over $34,000.

During September the LaGarces and their attorneys discussed reconciliation. On September 30 the LaGarces signed a Reconciliation Agreement. One clause said LaGarce 'will retransfer all assets into the same condition they were prior to the above recent separation of the parties and will do so within twenty-four hours after signing this agreement.' Plaintiff and LaGarce agreed 'to retain all of their assets in their individual names alone, or in the alternative, with each other as joint owners. The only exception to this item will be a provision already made for a life long friend of First Party's in the approximate sum of Four Thousand Dollars.' The LaGarces also agreed that each would maintain a will making the other party the executor and sole beneficiary of the entire estate. On October 3 August LaGarce executed a will that followed the mandate of the Reconciliation Agreement.

On October 3 plaintiff and August LaGarce went to Quinn's office to pick up the papers and assets he was holding for LaGarce. Later that day LaGarce went with plaintiff and her attorney to see Mrs. Mayer at Tower Grove. Following August LaGarce's instructions she cashed in the $4000 certificate that had been issued on August 16 to LaGarce and John Zakibe. A new certificate for $4000 was then issued in the joint names of August LaGarce and Bertha LaGarce. August LaGarce also wanted to surrender the $7000 certificate that he held jointly with the Mouldons, but Mrs. Mayer said this was impossible because he did not possess the certificate. After August LaGarce unsuccessfully tried to phone the Mouldons, he and plaintiff and and her attorney visited the bank, where August LaGarce's checking and savings accounts were once again put in joint ownership with plaintiff.

The last six days of August LaGarce's life witnessed a series of uncoordinated attempts to have the $7000 certificate returned to him. August LaGarce called Leona Mouldon and asked for the certificate. Mrs. Mouldon at first decided to return the certificate to LaGarce through John Zakibe. But later she decided to retain Quinn so she could leave the certificate with him. Her instructions to Quinn, when she gave him the certificate on October 7, were that he was to return the certificate at his office only to August LaGarce when two conditions were met: (1) August LaGarce signed a receipt for the certificate, (2) August LaGarce paid a sum of $150 for house cleaning, laundry, preparation of meals and miscellaneous services rendered August LaGarce by Mrs. Mouldon and her sister during plaintiff's...