Mitchell-Powers Hdw. Co. v. Eaton

• Decision Date: 09 September 1938
• Parties: MITCHELL-POWERS HARDWARE COMPANY, INC., ET ALS. v. HUGH H. EATON, JR.
• Court: Virginia Supreme Court

Page 255

171 Va. 255

MITCHELL-POWERS HARDWARE COMPANY, INC., ET ALS. v. HUGH H. EATON, JR.

Supreme Court of Virginia, Staunton.

September 9, 1938.

Present, Holt, Hudgins, Gregory, Browning and Eggleston, JJ.

1. CONTRACTS — Consideration — Support of Promisor's Parent. — Whether or not a contract for the support of one's aged and dependent parent is a contract upon a consideration deemed valuable in law depends upon whether such parent is in destitute or necessitous circumstances.

2. PARENT AND CHILD — Duty of Child to Support Parent — Section 1944a of the Code of 1936 — Condition Precedent. — A condition of section 1944a of the Code of 1936, making a child liable for the support of its parent, is that the parent must be destitute or in necessitous circumstances. This condition is essential to the right to support and a condition precedent to the creation of a legal obligation resting upon the child.

3. WORDS AND PHRASES — "Destitute." — "Destitute" is defined as "not possessing the necessities of life; in a condition of extreme want; without possessions or resources."

4. WORDS AND PHRASES — "Necessitous." — "Necessitous" is defined as "living in or characterized by poverty; needy," and as "narrow, destitute, pinching, pinched."

5. PARENT AND CHILD — Duty of Child to Support Parent — Section 1944a of the Code of 1936 — Meaning of "Support and Maintenance." — Support and maintenance, as used in section 1944a of the Code of 1936, making a child liable for the support of its parent, mean in a moral and legal sense, having regard to the situation, mode of life and condition of the persons concerned. The statute means the son or daughter, if of sufficient earning capacity or income, must do more than relieve the pangs of hunger, provide shelter and furnish only enough clothes to cover the nakedness of the parent. He or she must furnish such support and maintenance as comport with the health, comfort and welfare of normal individuals according to their standards of living considering his or her own means, earning capacity and station in life.

6. PARENT AND CHILD — Duty of Child to Support Parent — Section 1944a of the Code of 1936 — Purpose — Circumstances of Parent a Jury Question. — Section 1944a of the Code of 1936, making a child liable for the support of its parent, was intended to cover the case of a parent who is in destitute or necessitous circumstances according to his or her standard of living, and in determining whether or not he or she is in destitute or necessitous circumstances, the question, being one of fact, should be determined by a jury under proper instructions from the court.

7. BILLS, NOTES AND CHECKS — Consideration — Support of Maker's Mother — Dependent upon Whether Mother in Necessitous Circumstances — Case at Bar. — In the instant case, a creditors' suit, appellants contended that a note for $5,000 given by the debtor and secured by stock was without consideration and should not be allowed as a claim against the estate. The note was executed by the debtor pursuant to a verbal trust whereby he had agreed to compensate his sister for expenses she had incurred and would incur by reason of maintaining and supporting their aged mother, and in consideration of the sister's promise to support the mother as long as she might live.

Held: That under section 1944a of the Code of 1936, requiring that a child support its parent under certain circumstances, the question of whether the note was supported by a valuable consideration depended upon whether the debtor had sufficient earning capacity or income to provide or assist in providing for the support and maintenance of his mother and whether she was then and there in destitute or necessitous circumstances.

8. FRAUDULENT AND VOLUNTARY CONVEYANCES — Transfers with Intent to Defraud — Conveyance under Guise of Supporting Parent. — A debtor, under the guise of supporting his aged and destitute parent and with fraudulent intent, will not be permitted to divest himself of his property and convey it beyond the reach of his creditors.

9. BILLS, NOTES AND CHECKS — Consideration — Support of Maker's Mother — Remand to Determine Liability of Maker to Support under State — Case at Bar. — In the instant case, a creditors' suit, appellants contended that a note for $5,000 given by the debtor and secured by stock was without consideration and should not be allowed as a claim against the estate. The note was executed by the debtor pursuant to a verbal trust whereby he had agreed to compensate his sister for expenses she had incurred and would incur by reason of maintaining and supporting their aged mother, and in consideration of the sister's promise to support the mother as long as she might live. The evidence as to whether the mother was destitute or in necessitous circumstances within the meaning of section 1944a of the Code of 1936, was obscure, and there was practically none touching the essentials of the statute.

Held: That since the record was not in such condition as would permit the Supreme Court of Appeals to enter a final decree, the cause must be remanded to the trial court to hear further evidence and submit to a jury the question whether the debtor was legally bound to support his mother under section 1944a of the Code of 1936.

Appeal from a decree of the Corporation Court of the city of Bristol. Hon. Floyd H. Roberts, judge presiding.

The opinion states the case.

Pennington & Worley, for the appellants.

M. M. Heuser, for the appellee.

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

The litigation from which this appeal arises was begun on November 6, 1936, by J. P. Young who filed a creditor's bill against the estate of Hugh H. Eaton, Sr., deceased. Another creditor's bill was filed against the estate by the trustees for certain depositors of the Bank of Bristol who sued for the benefit of the Reconstruction Finance Corporation. A petition was filed in the cause by Mitchell-Powers Hardware Company. In the latter bill and in the petition a note of $5,000 made by Eaton in his lifetime and payable to his sister, Miss Sarah A. Eaton, to which was attached as collateral fifty-five shares of the capital stock of the Mitchell-Powers Hardware Company, was attacked as being without consideration. Later the causes were consolidated by a decree, in which the whole matter was referred to a commissioner in chancery for report upon certain inquiries specifically directed in the decree. The commissioner reported that the $5,000 note to which the fifty-five shares of stock were attached as collateral was given for no legal consideration and it was accordingly not allowed as a debt against the estate.

The note and stock were transferred from Miss Sarah A. Eaton to Hugh H. Eaton, Jr., at that time fifteen years of age, and a son of Hugh H. Eaton, Sr., deceased. He had appeared in the litigation by guardian ad litem and filed exceptions to the commissioner's report which disallowed the $5,000 note as a claim against the estate and which set aside the transfer of the fifty-five shares of stock from Hugh H. Eaton, Sr., to his sister Sarah A. Eaton.

The court, after mature consideration of the exceptions to the report, sustained the exception of Hugh H. Eaton, Jr., the appellee here, entered a decree establishing the $5,000 note as a debt against the estate and impressed the fifty-five shares of stock with a lien for the payment of the note. It is from this part of the decree that the present appeal was sought and allowed; therefore, the sole purpose of this appeal is to determine the correctness of the ruling of the court in establishing the $5,000 note as a liability of the estate of Hugh A. Eaton, Sr., deceased, and allowing a lien on the fifty-five shares to secure its payment.

In the bill of complaint filed by the trustees of the depositors of the Bank of Bristol and the petition of the Mitchell-Powers Hardware Company, it was alleged that Hugh H. Eaton, Sr., was the owner of 100 shares of the capital stock of the Mitchell-Powers Hardware Company at the time he became indebted to the Bank of Bristol. At this time he was also indebted to other persons, firms and corporations, including a debt to the Mitchell-Powers Hardware Company. On February 4, 1934, Hugh H. Eaton, Sr., executed a note for $5,000 to his sister, Miss Sarah A. Eaton, which was secured by sixty shares (later found to be fifty-five shares) of stock of the Mitchell-Powers Hardware Company. The note and stock were delivered to E. W. Potts, trustee, with instructions to deliver the stock or what was left to Hugh Eaton, Jr., when the note was paid. It is contended by the appellants that the note was executed without consideration and was voluntary and fraudulent under Code, sections 5184, 5185.

The purpose of the bill and petition was to set aside the transfer of the fifty-five shares of stock and make them available for the payment of the debts of the estate of Hugh H. Eaton, Sr., deceased.

In the answer of the guardian ad litem of Hugh H. Eaton, Jr., the infant appellee, to the bill and petition, the position of the infant is set forth. He acknowledges the execution of the note and that fifty-five shares of stock were pledged as collateral, as well as the equity in twenty-five additional shares of stock then pledged as collateral on a note due to J. P. Young. Hugh H. Eaton, Sr., endorsed in blank the assignment on the certificates representing the fifty-five shares of stock and these were held by E. W. Potts as trustee under a trust which provided that upon the discharge of the note, the fifty-five shares of stock should be delivered to Hugh H. Eaton, Jr., if he were then of age and, if not, that the stock should be held by the trustee until he reached the age of twenty-one. He further states that the above related transaction was made in pursuance of an agreement between Hugh H. Eaton, Sr., and his sister, Sarah A. Eaton, whereby he promised to reimburse her for her support...