Oldham v. McKay

• Decision Date: 08 January 1940
• Citation: 138 S.W.2d 735,235 Mo.App. 348
• Parties: JAY L. OLDHAM, APPELLANT, v. JESSIE McKAY, LIDA M. NESBITT, AND FIDELITY NATIONAL BANK & TRUST CO., OF KANSAS CITY, A CORPORATION, RESPONDENTS
• Court: Kansas Court of Appeals

138 S.W.2d 735

235 Mo.App. 348

JAY L. OLDHAM, APPELLANT, v. JESSIE McKAY, LIDA M. NESBITT, AND FIDELITY NATIONAL BANK & TRUST CO., OF KANSAS CITY, A CORPORATION, RESPONDENTS

Court of Appeals of Missouri, Kansas City

January 8, 1940

Appeal from Circuit Court of Jackson County.--Hon. Albert A. Ridge Judge.

REVERSED AND REMANDED (with directions).

Judgment reversed and cause remanded.

Jay L Oldham, pro se.

(1) (a) The court erred in refusing to decree under the pleadings and evidence, that appellant's judgment lien based upon a petition, filed against a judgment debtor, Anna K. Wright July 25, 1925, and judgment rendered December 12, 1929, being a pre-existing creditor was a prior and superior lien to that of respondent's claim in recoupment for expenses incurred in the support and maintenance of their grantor for life, between the date of their deed September 22, 1926 and the filing of this bill in equity on March 10, 1930; especially where the grantor conveys all of her real estate and does not retain sufficient property to satisfy the demands of pre-existing creditors; that said deed having been declared fraudulent and void by the court as to appellant a pre-existing creditor. Public policy forbids the reimbursement of parties to a fraudulent deed. The transaction must be free of all taint of fraud. 27 C. J., p. 673, pars. 464-465. Oldham v. Wright, 337 Mo. 170, l. c. 174, 85 S.W.2d 583, l. c. 485; Massey v. McCoy, 79 Mo.App. 169, l. c. 172; Walther v. Null, 233 Mo. 104, l. c. 121-122, 134 S.W. 993. (b) Badges of fraud include fictitions consideration, transaction different from the usual method of doing business, transfer of all of a debtor's property, insolvency, confidential relationship of the parties, and transfer in anticipation of suit or execution; none of these things alone prove fraud. They warrant inference of fraud, especially where there is a concurrence of a number of them. Oldham v. Wright, 337 Mo. 170, 85 S.W.2d 483; Castorina v. Herrmann, 340 Mo. 1026, 104 S.W.2d 297. (2) (a) The grantees in a fraudulent deed are not entitled to reimbursement under the equitable doctrine of subrogation for expenses incurred in the maintenance of their grantor. Oldham v. Wright, 337 Mo. 170, 85 S.W.2d 483; 27 C. J., p. 673, pars. 464-465; Lamplin v. Peoples' Natl. Bk., 98 Mo.App. 239; Mansur & Tebitts Implement Co. v. Jones, 143 Mo. 253; Gust v. Hoppe, 201 Mo. 293; Farmers Bank of Higginsville v. Handly, 320 Mo. 754, 9 S.W.2d 880. (b) There is a vast difference between what is said in the court's opinion and what is decided by it. 2 A. L. R., pages 1438 and 1444; Bank of Versailles v. Guthrey (1895), 127 Mo. 189, 48 Am. St. Rep. 621, 29 S.W. 1004; State ex rel. Bixby v. City of St. Louis, 241 Mo. 231, l. c. 238, 145 S.W. 801; Oldham v. Wright, 337 Mo. 170, 85 S.W.2d 483; State ex rel. Lashley v. Becker, 290 Mo. 560, l. c. 640, 235 S.W. 1017; Merithew v. Ellis, 116 Me. 468, 2 A. L. R. 1429-1433; State ex rel. Lashley v. Becker, 290 Mo. 560, 235 S.W. 1017. (3) The court erred in refusing to tax all costs of this case against respondents, Jessie McKay and Lida M. Nesbitt, as the appellant is the prevailing party in this controversy. It is true that the court ordered all the costs be paid first out of the fund of $ 1456.60, then gave respondents judgments and the balance to the appellant, which would be taxing all the costs against the appellant. Bruegge v. State Bank of Wellenston, 74 S.W. 835. (4) (a) The court erred under the pleadings and evidence in decreeing that respondent, Fidelity National Bank & Trust Company of Kansas City, recover and have $ 50, as attorneys fees for services rendered by its counsel. (Abs. 26). Alvers v. Merchants Exchange of St. Louis, 138 Mo. 159. (b) Upon the foreclosure of a deed of trust on real estate, the surplus money remaining after the payment of the incumbrance and expenses of sale, retains the character of real estate in the hands of the mortgagee or trustee to be disposed of according to law of real property. Kreyling v. O'Reilly, 97 Mo.App. 384; Arrowwood v. Delaney's Estate, 295 S.W. R. 520; Matlock v. Kline, 280 Mo. 139, 216 S.W. 323; Granite Bituminous Paving Co. v. Stange, 8 S.W.2d 1087. (c) Where a court of equity has once acquired jurisdiction of a cause it will not relax its grasp upon the res until it shall have avoided a multiplicity of suits by doing full, adequate and complete justice between the parties. Bentrup v. Johnson, 14 S.W.2d 537, l. c. 541; Phelps v. Scott, 325 Mo. 711, 30 S.W.2d 71, l. c. 75. (5) A trustee receiving compensation for services is liable for interest on money in its possession from date of demand by owners as provided by statute. Sec. 2839, R. S. Mo. 1929; Wolf v. Mathews, 98 Mo. 246, 11 S.W. 563; Mecarthey v. Guardian Trust Co., 274 Mo. 224, 202 S.W. 1131,; Hart v. John Rowan Plastering Co., 88 S.W.2d 264.

Bowersock, Fizzell & Rhodes for respondent, Fidelity National Bank and Trust Company of Kansas City, as Trustee.

(1) Respondent Fidelity National Bank and Trust Company of Kansas City is not chargeable with interest on the fund involved. Smith v. Grand Lodge A. O. U. W. of Missouri et al., 124 Mo.App. 181, 206, 101 S.W. 662; Mutual Life Insurance Co. of New York v. Rodney et al., 12 Del. Ch. 294, 114 A. 163; Niedermeyer, Inc., v. Fehl et al., 153 Ore. 656, 57 P.2d 1086, 1090. (2) An allowance to respondent Fidelity National Bank and Trust Company of Kansas City for counsel fees was proper. Farmers' & Laborers' Cooperative Insurance Association of Audrain County, Missouri, v. Bank of Centralia et al., 227 Mo.App. 1068, 1073, 56 S.W.2d 606; Stewart et al. v. Kane et al. (Mo. App.), (not officially reported), 111 S.W.2d 971, 975; Sovereign Camp Woodmen of the World v. Wood et al., 100 Mo.App. 655, 659, 75 S.W. 377; Grooms v. Mullett et al., 133 Mo.App. 477, 481, 113 S.W. 683.

Lathrop, Crane, Reynolds, Sawyer & Mersereau for respondents, Jessie McKay and Lida M. Nesbitt.

(1) The court did not err in refusing to adjudge appellant's judgment lien superior. (a) The law and the evidence established rights of respondents McKay and Nesbitt to priority in an amount of at least $ 849.10. Oldham v. Wright, 337 Mo. 170, 85 S.W.2d 483; Moberly v. Watson, 340 Mo. 820, 102 S.W.2d 886. (b) The law and the evidence established rights of respondents McKay and Nesbitt to priority to the full amount of $ 1,456.60. (2) This court should decree and adjudge rights of respondents McKay and Nesbitt to the full amount of $ 1,456.60. (a) Separate from their contract, they have established other priorities bringing the aggregate in excess of $ 1,456.60. 8 A. L. R. 527 n., l. c. 535; (b) Under their contract, they have established an executed valid consideration rendering the conveyance unassailable. Oldham v. Wright, 337 Mo. 170, 85 S.W.2d 483; Moberly v. Watson, 340 Mo. 820, 102 S.W.2d 886; Peikert v. Repple (Mo.), 114 S.W.2d 999; Liflander v. Bobbitt (Mo.), 111 S.W.2d 72; Barlow v. Scott (Mo.), 85 S.W.2d 504. (3) In the face of the greater weight of the evidence, appellant has not established his right to assail the conveyance. (4) The court did not err by not assessing costs against respondents McKay and Nesbitt. Clancy v. Herman C. G. Luytres Realty Co., 321 Mo. 282, 10 S.W.2d 914.

OPINION

KEMP, J.

This suit, as originally instituted on March 10, 1930, was an action to set aside a deed on the ground that it was executed for the purpose of hindering, delaying and defrauding plaintiff, a judgment creditor.

Upon the first trial of the case, and at the close of plaintiff's evidence, defendants moved the dismissal of plaintiff's bill on the ground that the evidence showed that he was not entitled to any equitable relief. The trial court sustained the motion and entered judgment dismissing plaintiff's bill and granting defendants certain affirmative relief. On writ of error the matter came before the Supreme Court where the judgment was reversed and the cause remanded. [Oldham v. Wright et al., 85 S.W.2d 483.]

The record discloses that on July 27, 1925, this plaintiff had sued Anna K. Wright in the Circuit Court of Jackson County, Missouri, to recover $ 1200 on a contract dated February 17, 1918, and also for $ 350 attorney's fees in another matter and for interest. On December 12, 1929, defendant Wright failing to appear, plaintiff obtained judgment for $ 1765. No motion to set aside the judgment was filed and no appeal therefrom was taken. While said suit against Mrs. Wright was pending, and on September 22, 1926, Mrs. Wright conveyed the residence property in which she lived to Jessie McKay and Lida M. Nesbitt, defendants in the instant suit. The deed was recorded the following day. The consideration recited therein was "One Dollar and other valuable consideration." There was a deed of trust on the property securing a note then reduced to $ 2000, which obligation the grantees assumed and agreed to pay.

On February 20, 1936, pending the instant action, and following the decision of the Supreme Court reversing the judgment and remanding the case, the Fidelity National Bank and Trust Company, trustee named in said deed of trust, foreclosed the same (the grantees in the deed had defaulted in payment of taxes and interest following the Supreme Court decision), and, after paying from the proceeds of the sale the debt secured thereby and the expenses incident to the foreclosure, had a surplus in the amount of $ 1456.60. On the day of the sale plaintiff served notice on the trustee of his claim to the surplus fund and the facts on which he based same. On February 26, 1936, McKay and Nesbitt, defendants, served notice on the trustee that they claimed said surplus fund, stating as ground therefor, that they were the owners of the property sold under said foreclosure.

After...