Neal v. Sparks

Citation773 S.W.2d 481
Decision Date27 June 1989
Docket NumberNo. WD,WD
PartiesJohn C. NEAL, Jr., Appellant-Respondent, v. Rosemary SPARKS, Personal Representative of the Estate of Lewis O. Girdner, Deceased, and Mary Drennan, Respondents-Appellants. 40011.
CourtCourt of Appeal of Missouri (US)

Robert L. Shirkey, and James M. Slone, Kansas City, for appellant-respondent.

Don Chapman, Jr., Chapman, Cowherd, & Turner, P.C., Chillicothe, for respondents-appellants.

Before TURNAGE, P.J., and CLARK and FENNER, JJ.

CLARK, Judge.

John C. Neal, Jr., sued Lewis O. Girdner, now deceased, and Mary Drennan seeking to recover title to or to impose a constructive trust on land in Livingston and Caldwell Counties which Neal had earlier conveyed to Drennan, a straw party for Girdner. The claim was based on Neal's allegations that the title transfer was a security arrangement in a composition with Neal's creditors and that he was due an accounting and reconveyance of the land. Girdner filed a counterclaim alleging that multiple suits filed by Neal on the claim constituted malicious prosecution and he sought damages. The trial court found for Girdner on Neal's claims and for Neal on Girdner's counterclaim. This appeal and cross-appeal followed.

The issues in the appeal and cross-appeal require a detailed recitation of the facts, supplemented by reference to two previous opinions delivered by this court in the tortuous history of this litigation. 1

The conveyances from which this litigation emanated were given by Neal, and his former wife Karlene, on August 22, 1974. Nine tracts of farmland in Livingston and Caldwell Counties were transferred by the Neals to Mary Drennan, the unmarried sister of Girdner. At the time, Neal was in distressed financial circumstances owing particularly to delinquency in payments on a real estate mortgage and the judgment granted Karlene February 14, 1974 in a dissolution of marriage suit.

The real estate mortgage dated from 1969 when Neal borrowed $165,000 from the John Hancock Insurance Company and executed a deed of trust on farmland. As of October 19, 1973, payments on the note were delinquent and the John Hancock Company commenced foreclosure. Neal discussed his problem with Girdner who agreed to buy the mortgage note for the purpose of giving Neal a period of time to improve his financial status. When Girdner bought the note November 6, 1973, the balance owed was $155,762.72. Taxes for 1972 on the property were overdue and unpaid and 1973 taxes were due.

Although Girdner did receive the proceeds from the sale of some crops and equipment for the account of Neal after November 6, 1973, it was Girdner's claim that as of August 1974, Neal was delinquent on his note payments and had also permitted judgment liens to accrue against the property. On August 2, 1974, Girdner commenced foreclosure.

Neal was also beset at the time by problems of a judgment entered February 14, 1974 in a dissolution of marriage suit. In that case, Karlene Neal had been awarded a 40% interest in the farmland and equipment, as well as child support, and executions were issued to collect on the judgment. In the summer of 1974, Karlene caused the sheriff to execute on crops planted on the Neal farms.

Purportedly to settle Neal's distressed financial affairs, he and Girdner entered into an oral agreement on August 22, 1974, the result of which has been the protracted litigation extending to the present date. To the extent that performance under the agreement has been documented, it is undisputed that Neal and Karlene Neal, his then divorced wife, executed quit claim deeds conveying all of Neal's farms to Mary Drennan. In exchange for her signature to the deeds, and presumably in satisfaction of her share of marital property as decreed by the court, Karlene was paid $28,500 by Girdner, who also paid $1164.06 to the circuit clerk as costs in the dissolution action and an accumulated sum of $1450.00 in attorney fees incurred by Neal. Later, Girdner paid $17,581.81 in real estate taxes due on the Neal farms and to release liens against the farms filed by Neal's creditors.

Soon after the August, 1974 deeds had been delivered and recorded, a dispute arose as to whether Neal was entitled to retain possession of any of the farms. Neal understood the agreement to be that he would continue farming operations pending sales of any of the land or equipment. Girdner claimed that the delivery of the deeds entitled him to possession. On behalf of Girdner, Mary Drennan instituted an unlawful detainer action against Neal and on April 30, 1975 she obtained a judgment against Neal by default.

The dispute over the terms of the oral agreement also prompted Neal to file suit against Girdner on March 28, 1975 in Livingston County (Neal One). In that suit, Neal claimed the August, 1974 deeds had been procured by fraud and undue influence on the part of Girdner. Neal One was dismissed by the circuit court June 12, 1975 when Neal failed to respond to an order that he make his petition more definite and certain.

The dismissal of Neal One was followed, somewhat incongruously, by Neal's execution of a document on June 16, 1975 entitled, "Agreement For Settlement And Release." Neither Girdner nor Drennan signed the "agreement" nor was provision made for them to do so. Neal purported by the document to release all of his claims, as asserted in Neal One, arising out of the 1974 deeds in return for payment by Girdner later shown by the evidence to have been in the amount of $4500.00. Despite the absence of any signature by Girdner to the "agreement," a recitation was included which obligated Girdner to account to Neal for any amounts by which proceeds from the sale of the land deeded exceeded Neal's debts to Girdner.

In late 1975 and early 1976, several of the tracts of land deeded by Neal in 1974 to Drennan were sold and conveyed by Drennan, on behalf of Girdner, in arms length transactions to third parties not interested in the Neal-Girdner transactions. Later, Drennan conveyed the remaining tracts to Girdner. These transactions were followed by the next suit (Neal Two) filed May 7, 1977 in Livingston County.

In that action, Neal sued Drennan and Girdner seeking declaration of a resulting trust on the tracts Drennan had conveyed to Girdner. On motion by Girdner, the trial court dismissed the case against him, reserving for trial the claim against Drennan. The trial court based that disposition on the ground that dismissal of Neal One precluded a second suit by Neal against Girdner on the same cause of action. The court then proceeded to try Neal's case against Drennan finding for Neal and against Drennan and declaring a resulting trust in the property. Drennan appealed that judgment and Neal appealed the dismissal of Girdner. In Neal v. Drennan, 640 S.W.2d 132 (Mo.App.1982), the court held that Girdner was not entitled to assert the bar of res judicata based on the involuntary dismissal of Neal One because it was not the same cause of action against the same party. 2 Rule 67.03; Denny v. Mathieu, 452 S.W.2d 114 (Mo. banc 1970). Because Girdner was an indispensable party in Neal's suit against Drennan, the judgment for Neal was also reversed and the case was returned for a new trial against Girdner and Drennan.

The trial in Neal Two of the cause against Drennan, which preceded the ultimate reversal of the judgment on appeal referred to in the previous paragraph, was conducted May 29, 1980 and the court announced its judgment in favor of Neal and against Drennan on July 25, 1980. Between those dates Neal filed a new suit against Girdner and Neal's former attorney, Al White, in Clay County (Neal Three). To the extent material here, Neal claimed in that suit the existence of a conspiracy between Girdner and White designed to procure from Neal the 1974 deeds to Drennan, all with the purpose of cheating and defrauding Neal. At the time of filing Neal Three, as the foregoing recapitulation of proceedings has shown, Neal Two was still pending in Livingston County awaiting disposition of the appeal. That cause of action and the suit in Clay County presented essentially the same claims originating in the dispute over the 1974 deeds. Accordingly, the court in Clay County dismissed Neal Three as duplicative of the action already pending in Livingston County.

As was noted above, the opinion in the first of Neal's appeals to this court resulted in the remand of Neal Two to the circuit court of Livingston County for trial. The mandate for that disposition was filed November 18, 1982. A trial did not follow, however, because on September 16, 1983, Neal voluntarily dismissed Neal Two. Concurrently, Neal refiled substantially the same suit in Clay County (Neal Four). In that action, Neal sought reconveyance to him of the lands deeded to Drennan in 1974, an accounting of sums Girdner had realized from the sale of some of the tracts and from other sources, the imposition of a resulting trust and damages.

Neal Four did not long survive. As an action affecting the title to real estate in Livingston and Caldwell Counties, venue of Neal Four could not lie in Clay County. The court dismissed the case December 30, 1983.

The suit which is the subject of the present appeal was filed by Neal in Caldwell County June 27, 1984 (Neal Five). In this case, Neal reasserted his previous claims against Girdner and Drennan and also included as defendants the persons and a corporation to whom conveyance of part of the land had been made by Drennan in the third party sales mentioned earlier. Neal again claimed the right either to recapture title to those properties or to impose a constructive trust on the land in his favor. The claims against Girdner and Drennan were severed from those against the other defendants and as to those defendants, the third party grantees, the court entered summary judgment against Neal. That disposition was affirmed by this court in Neal v. Girdner, 725 S.W.2d 924 (Mo....

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