McClellan v. McCauley

• Court: Mississippi Supreme Court
• Writing for the Court: McGowen, J.
• Citation: McClellan v. McCauley, 130 So. 145, 158 Miss. 456 (Miss. 1930)
• Decision Date: 13 October 1930
• Docket Number: 28735
• Parties: MCCLELLAN v. MCCAULEY

130 So. 145

158 Miss. 456

MCCLELLAN v. MCCAULEY

No. 28735

Supreme Court of Mississippi

October 13, 1930

Division A

1 GIFTS.

Essential elements of "gift inter vivos" are competent donor and donee, intention, delivery, acceptance, and gift must go into immediate and absolute effect.

2 GIFTS. Father's making notes for money loaned by him payable to daughters, but without delivery and surrender of control, held not to constitute "gift inter vivos."

Father after making designated loans of money to third persons, accepted notes payable to daughters for the purpose of evading taxes, but exercised complete and uninterrupted dominion over notes. In will subsequently executed, he disposed of such notes in same manner as he disposed of his other property, and specifically stated that notes were a part of his estate.

3. DESCENT AND DISTRIBUTION.

To constitute "advancement," complete title must pass and beneficial interest vest in child during lifetime of parent.

4. DESOENT AND DISTRIBUTION.

Making notes covering loan by father to third person payable to daughters held not "advancement," where father retained dominion and control.

5. EQUITY.

Equity will not grant relief where complainant does not come into court with clean hands.

6. EQUITY.

Maxim that he who comes into equity must come with clean hands has reference solely to willful misconduct regarding matter in litigation.

7. EQUITY.

Obligation indirectly connected with illegal transaction is enforceable if plaintiff does not require aid of illegal transaction to make out case.

8. EQUITY. Fact that testator made notes covering loans payable to daughters to avoid taxes would not preclude executrix from recovering notes and trust deed as assets of estate, where illegal transaction was not consummated.

Daughter, after testator's death, as one of payees of notes made by testator to avoid taxes, contended that executrix was not entitled to recover notes under maxim that he who comes into equity must come with clean hands. Though testator intended to evade law, he did not consummate intention by delivering notes and trust deed, but at all times retained dominion and control over them, precluding their becoming effective.

9. EVIDENCE.

In suit to recover notes and trust deed belonging to estate, testimony showing testator's declarations regarding notes claimed by defendant as gift or advancement held admissible.

10. EVIDENCE.

Donor's declarations either before or after gift, unless equally consistent with intent not to give, are admissible to establish gift.

11. EVIDENCE.

Declarations and admissions of donor subsequent to time gift was completed are not admissible to invalidate gift.

HON. A. B. SCHAUBER, Special Chancellor.

APPEAL from chancery court of Lauderdale county, HON. A. B. SCHAUBER, Special Chancellor.

Action by Mrs. Ray G. McCauley, as executrix of the estate of A. N. Griffin, deceased, against Malcolm McClellan, trustee, and others. Decree for complainant, and named defendant appeals. Affirmed.

Cause affirmed.

J. V. Gipson, of Meridian, for appellant.

A court of equity will not assist in restoring and recovering back property after A. N. Griffith's fraudulent purpose has been carried by having successfully avoided income taxes.

The maxim that "He who comes into a court of equity must do so with clean hands" should be applied in this case.

Equity will not relieve a person, or his executrix after his death, on petition or original bill of executrix where title to property has been voluntarily placed in a third person, where a fourth person must suffer loss by reason of his act.

Vol. 2, sec. 278 of Pomeroy Equity Jurisprudence and 10 R. C. L., 788, and sec. 102; Biles v. Walker, 83 So. 411.

To create a valid gift, donor need not necessarily relinquish the possession of the thing given, and need not relinquish all interest in and authority over same, or all interest in the subject of the gift.

Eaton v. Blood et al., 208 N.W. 508.

The delivery can be constructive as well as actual.

Parker et al. v. Mott et al., 107 S.E. 500.

The appellant contends that the delivery of the money or a check for the money to R. B. Hare by A. N. Griffin, with positive instructions and directions to loan the money in the name of Mrs. Baldwin, was all the delivery necessary, as the proof shows without dispute that R. B. Hare did the thing requested by A. N. Griffin, and that the gift inter vivos was complete and absolute when and as soon as R. B. Hare completed doing the thing requested to do by A. N. Griffin. Should the appellant be in error on this point, the appellant contends this was an advancement.

Holmes v. McDonald, 75 Am. St. Rep. 434; McReynolds v. Grubb, 73 Am. St. Rep. 448.

In the case of Holmes v. McDonald, 75 Am. St. Rep. 430, the court held that "a record mortgage, executed to a father by his son, providing for a payment by the son to the father of an annual sum during his life, and thereafter of a specific sum to his daughter who has knowledge of the gift, and that it is secured by mortgage, is a gift inter vivos to the daughter and cannot be revoked by the discharge of the mortgage by the father as fully paid and satisfied."

Baskin, Wilbourn & Miller, of Meridian, for appellee.

That the subject of a gift is in possession of the donee at the time the gift is made is not sufficient to satisfy the requirements of a statute that a verbal gift is not valid, unless the means of obtaining possession and control of the thing are given, nor if it is capable of delivery, unless there is an actual or symbolical delivery of the thing to the donee.

Edson F. Adams, Exr. of Thomas Prather, deceased, v. Mercer Stone Company, 3 A. L. R. 928.

To effect a valid gift of a chose in action not capable of manual delivery, the only recognized means of obtaining control is an assignment in writing or some equivalent thereof.

Woods v. Sturges, 116 Miss. 412; Meyer v. Meyer, 106 Miss. 638.

There was no advancement to Mrs. Brush.

Greene v. Greene, 145 Miss. 109.

The definition of advancement embraces the idea that the donor has irrevocably parted with his title in the subject-matter, and that complete title has passed to and become vested in the donee. And it is necessary to the existence of an advancement that the passing of the complete title and vesting of the beneficial interest shall take place during the lifetime of the donor, as the purpose of an advancement is to allow the heir or distributees the present use and enjoyment of that which under other circumstances he would not secure until the donor's death. Hence, where no estate that can be alienated is given to a donee, no advancement can be said to have been made.

1 R. C. L. 660, par. 10.

In McHugh v. O'Conner, 9 So. 165, the supreme court of Alabama held that there was no gift of an indebtedness evidenced by a note and secured by a mortgage where there was a mere delivery of the mortgage but not of the note.

Delivery is always a question of intention, and retention of the papers is always a circumstance strongly evidential of a want of delivery.

Hall v. Barnett, 71 Miss. 37, 14 So. 732; Lynch v. Lynch, 83 So. 807.

The evidence does not show any fraud such as is contended for by the appellants, nor any such conduct as would have prevented even Mr. A. N. Griffin himself, much less his executrix, from asserting his legal title to these loans. The theory of the appellee's bill was that there had been no gift and no advancement and that there had been no parting of possession of title on the part of her father. Where a man has not given his property away and not parted with his title to it in fact, and another has acquired no interest in it in fact, as is the case here, his motive in having the papers drawn in the name of another is immaterial and certainly could not effectuate a transfer of the title.

Simmons v. Calloway, 138 Miss. 669, 103 So. 350.

That the party to a suit complaining of a wrong must have been injured thereby in order to justify the application of the principle of unclean hands to the case is affirmatively held in the following cases.

Lyman v. Lyman (1916), 90 Conn. 406, L. R. A. 1916E 643, 97 A. 312; Chicago v. Union Stock Yards & Transit Co. (1896), 164 Ill. 238, 35 L. R. A. 281, 45 N.E. 430; John Anisfield Co. v. Edward B. Grossman & Co. (1901), 98 Ill.App. 180; American Asso. v. Innis (1900), 109 Ky. 595, 60 S.W. 388; Beekman v. Marsters (1907), 195 Mass. 214, 11 L. R. A. (N. S.) 201, 122 Am. St. Rep. 232, 80 N.E. 817, 11 Ann. Cas. 332; Halladay v. Faurot (1883), 8 Ohio Dec. Reprint 639; Post v. Campbell (1901), 110 Wis. 386, 85 N.W. 1032.

OPINION

McGowen, J.

In the chancery court of Lauderdale county, Mrs. McCauley, as executrix of the last will and testament of A. N. Griffin, deceased, exhibited her bill against Malcolm McClellan, trustee, J. V. Gipson, substituted trustee, and Mrs. Lizzett G. Brush. The allegations in the bill were to the effect that during his lifetime the deceased had loaned thirty thousand dollars to Joe Meyer et al., evidenced by their promissory note, and secured by a deed of trust, properly recorded; that said note and deed of trust were, on their face, payable to Mrs. Ray G. McCauley and Mrs. Lizzett G. Baldwin; but that in truth and in fact, from the date of the execution of the note and deed of trust, the same remained in his possession until his death, when they passed into the possession of Mrs. McCauley, as executrix of the estate; and that neither she nor her sister ever had any interest in said note and deed of trust, and that there had been no delivery of same to them.

It is further alleged that her testator, in his lifetime, loaned to Dumont twenty thousand dollars evidenced...