Lemp Brewing Co. v. Steckman

• Decision Date: 04 May 1914
• Docket Number: No. 11088.,11088.
• Citation: 168 S.W. 226,180 Mo. App. 320
• Parties: LEMP BREWING CO. v. STECKMAN.
• Court: Missouri Court of Appeals

168 S.W. 226

180 Mo. App. 320

LEMP BREWING CO. v. STECKMAN.

No. 11088.

Kansas City Court of Appeals. Missouri.

May 4, 1914.

Rehearing Denied June 1, 1914.

EXECUTORS AND ADMINISTRATORS (§ 85) — GIFTS BY DECEDENT — TRANSFERS FRAUDULENT AS TO CREDITORS — DETERMINATION OF RIGHTS — JURISDICTION — PROBATE COURT.

Where defendant, who was the executrix of her deceased husband's estate, omitted to inventory certain funds which had been given to her by her husband, the probate court had exclusive original jurisdiction to determine the validity of such gift as against a creditor of the husband, whether the widow claimed the money by gift or in payment of services, or partly in payment of services and in part to pay some homestead debts of her husband; and such questions could not be originally raised in a suit in equity to set aside the transfer as a fraud on creditors.

Appeal from Circuit Court, Cooper County; J. G. Slate, Judge.

Action by the Lemp Brewing Company against Pauline Steckman. Judgment for plaintiff, and defendant appeals. Reversed.

John Cosgrove and Daniel W. Cosgrove, both of Boonville, for appellant. Pendleton & Pendleton and W. F. Johnson, all of Boonville, for respondent.

ELLISON, P. J.

This action is in the nature of a creditor's bill in equity to declare defendant a trustee of money received from her deceased husband as a gift, and to charge such money in her hands with the payment of plaintiff's claim which arose against the husband in his lifetime, before the date of the gift. The judgment in the trial court was for the plaintiff.

Deceased was a saloon keeper and bought beer of plaintiff, the price of which was this claim of $701.64. Deceased sold his saloon for $4,800, after incurring that indebtedness to plaintiff, which, with $200 additional, he gave to defendant, his wife. This was all of his personal property. The only interest he had in real estate was a tract of ground, the title to which was in him and his wife, by the entirety. At his death the whole title vested in her. Deceased left a will wherein defendant was appointed executrix.

The petition alleges that there was no property subject to administration, and that plaintiff's claim was presented to and allowed by the probate court. It is then charged: That deceased made a voluntary gift of the money aforesaid to defendant for the fraudulent purpose of defeating claims of plaintiff and other creditors. That defendant and her brother, acting as her agent, conspired to conceal and remove the aforesaid sum of money from the reach of creditors by investing $4,000 of it in a mortgage loan on real estate, which they hold under a joint claim of ownership in the proportion of $2,240 to her brother and $1,760 to her; the fraudulent pretense being that deceased was indebted to her brother in the former sum. It was further alleged that defendant and her brother have disposed of the remaining $1,000 in such way that plaintiff cannot locate it by any court process.

Defendant admitted by her answer that she was deceased's widow, and that Deel was her brother; that deceased sold his saloon for $4,800, and indorsed the check, taken in payment, to her. She admitted that the real estate mentioned in the petition was hers as survivor of her husband, and that she was appointed executrix, and that plaintiff's claim was allowed in the probate court.

Defendant then set up in the answer: That the saloon was once owned by her husband and one Culverhouse as partners, and that they paid her for cooking lunches, washing dishes and linen used in the saloon business. That Culverhouse died, and deceased promised her $20 per month to continue such work, and that he had not paid her for the last 5½ years preceding his death. That, when deceased delivered her the check for $4,800, he directed her "to pay some debts" and to pay her brother Deel the amount he owed him, which she alleges was $2,240, and the balance was to pay her for her services.

Defendant then alleged that she has paid on deceased's debts out of the proceeds of the check $795.50; and she showed by her settlement made with the probate court that she had in fact paid these debts. They consisted of a variety of claims, 25 in number, and while some were for funeral services, probate fees, etc., many of the others were debts against deceased in his lifetime. She also alleged in her answer that she was entitled to be allowed the sum of $400 as part of her statutory dower.

It appears that plaintiff, prior to the institution of the present action, had begun proceeding in the probate court charging defendant, as executrix, with concealing assets of the estate and submitting interrogatories under the provisions of sections 70-74, R. S. 1909. But, on concluding that a gift (void as to creditors) had been made by the deceased, such proceeding was dismissed by plaintiff, and the present action instituted.

Defendant raises a question of jurisdiction of the circuit court, claiming that the probate court had exclusive jurisdiction with a right of appeal to the circuit court. This view of defendant is based on the position that this is a charge of concealing or withholding assets of the estate, the recovery of which is provided for by the statute we have cited, and that plaintiff's claim involves and makes necessary a trial of the title to the property, and that such trial must be had, in the first instance, in the probate court. The statute in this respect has been the subject of much discussion by the Supreme and appellate courts of the state. In Eans v. Eans, 79 Mo. 53, it was held that the probate court had jurisdiction under the statute (quoting from the syllabus), "not only in cases where the assets were concealed or embezzled, but also where they were openly held under a claim of title." In the same case, on second appeal (Gordon v. Eans, 97 Mo. 587, 4 S. W. 112, 11 S. W. 64, 370), that view was overruled or modified and an announcement made that the probate court had no right to try the title to the property, where the claim of title, as against the estate, was in good faith, and we followed this in Johnson v. Johnson, 82 Mo. App. 350, and Wilson v. Ruthrauff, 82 Mo. App. 435; and such had been the view of the St. Louis Court of Appeals. Cardwell v. Stuart, 67 Mo. App. 61; Hoehn v. Struttmann, 71 Mo. App. 399. But in Tygard v. Falor, 163 Mo. 234, 63 S. W. 672, the court returned to the rule announced in the Eans Case on the first appeal, and practically annulled the decision made on the second appeal. For the court sustained a trial in the probate court of the title to property charged to be concealed or otherwise wrongfully withheld by the executor of an estate. In Re Estate of Huffman, 132 Mo. App. 44, 111 S. W. 848, the St. Louis court of Appeals, in an opinion by Judge Goode, examined the question at length and very properly accepted the Tygard Case as overturning the decision in the Eans Case on the second appeal and the decisions of the Courts of Appeal founded thereon. Then came Clinton v. Clinton, 223 Mo. 371, 123 S. W. 1, fully...