Long v. Kyte

• Decision Date: 12 December 1960
• Docket Number: No. 2,No. 47808,47808,2
• Citation: 340 S.W.2d 623
• Parties: Robert W. LONG and David H. Long, Appellants, v. Frances E. KYTE, Respondent
• Court: Missouri Supreme Court

Page 623

340 S.W.2d 623

Robert W. LONG and David H. Long, Appellants, v. Frances E. KYTE, Respondent.

No. 47808.

Supreme Court of Missouri, Division No. 2.

Dec. 12, 1960.

John C. Russell, Donald E. Raymond, Kansas City, for appellants.

James A. Moore, Laird P. Bowman, Kansas City (Gage, Hodges, Moore, Park & Kreamer, Kansas City, of counsel), for respondent.

STORCKMAN, Judge.

This action in equity was brought to establish a resulting trust in a 400-acre farm situated near Belton in Cass County. The trial court found the issues against the plaintiffs and decreed and adjudged the defendant to be both the legal and equitable owner of the land in question. The plaintiffs' chief contention on appeal is that the trial court erred in holding that the evidence was insufficient to establish that the defendant held title to the land as a trustee for the benefit of the plaintiffs.

The plaintiffs are sons and the only heirs of David E. Long who died intestate in Kansas City, Missouri, on October 12, 1955. Mr. Long was at one time a member of the County Court of Jackson County and was sometimes referred to in evidence as Judge Long which appellation will sometimes be used to distinguish him readily from his sons. The sons were jointly engaged in the insurance and real estate business in Kansas City and in the later years the father had his office with them. Judge Long's principal occupation was investing and trading in real estate. He was the beneficial owner of all of the capital stock of Farm City Investment Company which he utilized as a real estate holding company. Farm City was liquidated in 1951 or 1952 after the real estate held by it had been distributed to the sons or otherwise disposed of.

The legal title to the land in question, encumbered by a $30,000 deed of trust, was conveyed by W. G. Wrenn and his wife to Farm City Investment Company by a warranty deed dated July 25, 1930. The transfer was pursuant to a real estate exchange agreement. Farm City caused to be conveyed to Mr. Wrenn and his wife a business property located in Kansas City on the northwest corner of 15th and Charlotte Streets subject to a deed of trust securing a note payable to Farm City for $65,000 and interest. Legal title to the farm remained in Farm City from July 1930 until it was conveyed to George E. Mitchell, a business associate of Judge Long, by a quitclaim deed dated January 5, 1946, and recorded August 29, 1946. The defendant acquired the legal title to the farm by a warranty deed dated January 5, 1946, executed by Mr. Mitchell which was filed for record on February 23, 1955.

The plaintiffs concede that the record title to the farm was in the defendant's name at the time Judge Long died in October 1955 but assert that their father was the beneficial owner at the time of his death and that they as his heirs have succeeded to his title. The defendant, on the other hand, asserts that she was the equitable owner of the farm at all times and that the title was held for her by others until it was placed of record in her name on February 23, 1955, by virtue of the Mitchell deed dated January 5, 1946.

The record evidence in the case, including exhibits, is voluminous and need not be set out in great detail. On many of the facts the parties differ only as to their interpretation. Having traced the legal title, we now address ourselves to the evidence relating to the ownership of the beneficial interest in the land from July 1930 to the time of Judge Long's death in October 1955.

The son, Robert W. Long, knew about the purchase of the farm but neither he nor his brother had anything to do with the purchase or the handling of it. He had been to the farm on one occasion but no other member of the family other than his father had been there. Robert W. was the administrator of his father's estate. Donald Patterson, the attorney handling the estate, knew about the farm and had talked to Judge Long about it, but the attorney did not list the farm in the inventory and appraisement of the estate nor in the Federal Estate Tax Return. Nor was the $50,000 note secured by a deed of trust on the farm listed in the inventory or in the taxreturn. David E. Long was about 84 years old at the time of his death. His wife died in 1950, and during the last two years of his life he lived at the defendant's home on Gillham Road in Kansas City. An officer of the First National Bank of Kansas City identified loan records of the bank which showed that Judge Long or his investment company borrowed $31,500 from the bank in December 1930 which was used to pay the indebtedness secured by a deed of trust on the farm. This witness testified that Judge Long told him that he had bought a farm and that this was the final payment on it. The first mortgage encumbrance on the farm, which the bank loan was used to pay, was pledged with other collateral as security for the bank loan which was later paid.

The farm was primarily a stock farm used to raise horses and cattle and in the early years turkeys; crops were grown mainly to feed the livestock on the farm. The evidence is quite conclusive that the defendant managed and operated the farm practically from the time it was purchased in July 1930. There were living quarters on the farm and she stayed there part of the time. New barns and other improvements were erected. She was in charge of operations and gave all instructions. Many of the lumber and material bills and some of the wages of workmen and farm hands were paid by checks signed by Judge Long, but the defendant generally approved the payments before they were made; sometimes the workmen and others were paid in cash by the defendant. The defendant and Judge Long frequently came to the farm together and were often there two or three times a week. Witnesses, including Judge Long's attorney, testified that Judge Long advised the defendant, handled her business matters and acted as her unofficial guardian for many years. Richard O. Steele, the former nominal president of Farm City Investment Company, identified an account book in which he had entered at Judge Long's direction expense items in connection with the Belton farm through November 30, 1931. He was told by Judge Long at that time to discontinue keeping these records. On one of the pages, unsigned but in the handwriting of Judge Long, is this notation: 'This property quit claimed for debt against it.' On several occasions Judge Long claimed ownership of the farm in his income tax returns; but, as pointed out by the trial court in its opinion, the claim of ownership on such occasions was beneficial to him in that the farm deductions were substantially more than the income. Tax receipts in evidence for the years of 1938 through 1942 were issued in his name; other receipts in evidence for the years 1943 through 1946 are in the name of the defendant Frances E. Kyte.

A number of witnesses testified that the farm had been generally known in the community as the Kyte farm and that Judge Long had told them that he had no interest in the farm, that it belonged to the defendant and that he was managing her finances. Livestock auctions held at the farm were arranged and conducted by the defendant. A catalogue of one of these auctions and other papers show that the farm was publicly known as the 'Kyte Pure Bred Stock Farm'. There is evidence that the defendant collected stud fees and other income from the operation of the farm.

George E. Mitchell, a former business associate, testified that he took title to the farm from Farm City at the request of Judge Long and executed a note for $50,000 payable to Mr. Long and secured by a deed of trust on the farm, but that Judge Long assured him that he would never be bothered about payment of the note. Judge Long told him that the defendant owned the farm and that he, Mitchell, was holding it for her. While the title was in Mr. Mitchell's name, the defendant asked him to execute an easement to a gas company which he did. On the same day the farm was put in his name, Mr. Mitchell signed a general warranty deed conveying the land with the name of the grantee left blank. He was later informed that the deed was placed of record in the defendant's name.

W. R. Moore, an attorney in Kansas City since 1898, represented David E. Long on various occasions and prepared many of the deeds and documents introduced in evidence. He was acquainted with many of the transactions as attorney for Mr. Long and later representing the defendant as well. Mr. Moore testified that the note for $50,000 and deeds securing it executed by George E. Mitchell was a 'blind mortgage' and that Mr. Mitchell received nothing out of the transaction except recited consideration of $1. Judge Long told his attorney that the farm belonged to the defendant. He delivered to Mr. Moore the warranty deed signed by Mr. Mitchell, the $50,000 note payable to David E. Long and the deed of trust securing it and a letter instructing the attorney to deliver the documents to the defendant upon Mr. Long's death for the purpose of vesting absolute title in the defendant. Subsequently, with the consent of the defendant, the warranty deed, note, and deed of trust were given to Judge Long and Mr. Moore next saw them at the defendant's house in the presence of the defendant and Judge Long. At that time the defendant's name was on the deed. The attorney was then instructed by Judge Long and the defendant to record the warranty deed and release the note and deed of trust which was done before Judge Long's death.

The evidence is quite conclusive that the defendant was in charge of and operating the farm for a period of approximately 25 years during the lifetime of Judge Long and that she received the rents and profits of the land with his approval. While the details of their financial arrangements are not fully developed, it is evident that one existed which was satisfactory to Judge Long. Some of the evidence will be more fully...