Priest v. Way

• Decision Date: 31 October 1885
• Parties: PRIEST, Executor, v. WAY et al., Appellants.
• Court: Missouri Supreme Court

87 Mo. 16

PRIEST, Executor,

v.WAY et al., Appellants.

Supreme Court of Missouri.

October Term, 1885.

Appeal from St. Louis Court of Appeals.

REVERSED.

Glover & Shepley and G. H. Shields for appellants.

(1) The presumption in favor of innocence holds in all civil cases in which it comes collaterally in question. Case v. Case, 17 Cal. 598; Bradish v. Bliss, 35 Vt. 326; Klein v. Landman, 29 Mo. 259; Murray v. Murray, 6 Ore. 17; Spears v. Burton, 31 Miss. 547; Lockhart v. White, 18 Tex. 102; Sharp v. Johnson, 22 Ark. 75. (2) A gift may be presumed from possession and the relations of the parties, and the circumstances of the case without direct evidence. Hill & Dale v. Duke, 6 Ala. 259; Teague v. Griffeth, 2 Mon. 2; Davis v. Dunken, 1 McCord, 213; Collins v. Loftus & Co., 18 Leigh (Va.); 3 Henning and Mumford, 127; Brown v. Handley, 7 Leigh, 19 (Va.); Nation v. Johnson, 7 Leigh 317; De Graffenreid v. Mitchell, 3 McCord, 56; Creed v. Lancaster Bank, 1 Ohio St. 160. (3) Evidence of a gift was admissible under the general denial. Pomeroy on Remedies and Remedial, Rights, §§ 677-9; Andrews v. Bond, 16 Barb. 673; Willard v. Giles, 24 Wis. 319. (4) The report of the referee is conclusive on a question of fact, if there is any evidence to support it. Brooksv. West, 3 Mo. App. 582; Wood v. Staats-Zeitung, 3 Mo. App. 602; Woodroe v. Younger, 61 Mo. 395; Franz v. Detriek, 49 Mo. 495; Western B. B. A. v. Kribben, 48 Mo. 37. (5) Notwithstanding the provisions of the code, the plaintiff cannot allege a tort and recover on an implied contract or a trust. Hale v. Omaha Nat. Bank, 39 N. Y. Sup. Ct. 207; Bailey v. Southwick, 6 Lan. 356; Booth v. Farmers', etc., Nat. Bank of Rochester, 1 Thomp. and C. (N. Y.) 45; Fish v. Clelend, 33 Ill. 338; Singleton v. Pacific Railroad, 41 Mo. 445; Goldsmith v. Boersch, 28 Ohio, 351; De Graw v. Ellmore, 50 N. Y. 1; Link v. Vaughn, 17 Mo. 585; Beck v. Ferrars, 18 Mo. 30; Robinson v. Rice, 17 Mo. 289; Penseman v. Penseman, 22 Mo. 35. (6) If fraud is alleged by the bill, relief cannot be had by proving only a case of constructive fraud. Kerr on Fraud, 383; Wilde v. Gibson, 1 House Lds. Cases, 604; Lord Cottenham, 620-1; Parks v. Jewell, 1 Kay & Johnson Ch. 671; Lord Hatherly, 673. (7) The refusal of the referee to allow Mrs. Way to testify for herself, after she had been called and examined by plaintiff, is error, for which the judgment of the court of appeals should be reversed. It was admitted at the hearing that Mrs. Way was examined under the original petition, and that she was suddenly placed upon the stand without notice, and without having been subpœnaed. (8) The objection to the competency of a witness is waived by calling the person as a witness, or by cross-examination. Tinsley v. Lirely, 25 Ala. 123; Donelson v. Taylor, 8 Pick. 390; Kelley v. Brooks, 25 Ala. 523.

John F. Dillon also for appellants.

(1) The issue arising upon the pleadings is the question of the fraudulent abstraction and conversion of money. Andrews v. Bond, 16 Barb. 633; Gregory, etc., v. Selleck, 43 Conn. 320. (2) The burden of proof is on plaintiff. 1 Greenl. on Ev., sec. 80. There is no difference in respect to burden of proof between proceedings at law and in equity. 1 Dem. Ch. Prac. 850; Pusey v. Wright,31 Pa. St. 387. Possession of property, and especially of money or negotiable paper, imports delivery and title in the holder, and the presumption thus raised must, in all cases, be rebutted by affirmative proof that the possession is fraudulent or unlawful. Worcester, etc., v. Dorchester, etc., 64 Mass. 491; Jones v. Chalmers, 2 Seld. 214; Potter v. Chadsey, 16 Abb. 146; Goodman v. Harvey, 4 A. & E. 870; Dolfus v. Frosch, 1 Den. 367; Pinkerton v. Bailey, 8 Wend. 600; Arboum v. Anderson, 1 Q. B. 504; Pratt v. Adams, 7 Paige, 629; King v. Milsom, 2 Camp. 5. (3) The result of the testimony is to raise the presumption of a gift. Bedell v. Carll, 33 N. Y. 581. Mrs. Way should have been permitted to explain her deposition. Samuels v. Griffith, 13 Ia. 113; 1 Greenl. on Ev. sec. 462. (4) Plaintiff's case fails, whatever may be adjudged respecting the sufficiency of the evidence to affirmatively show gifts. (5) The court could not divest Mrs. Way's title on the ground that it was obtained by the exercise of undue influence. The only issue raised by the pleadings is conversion, a denial of title in defendant. The jurisdiction of a court of equity, like that of a court of law, is confined to the issues raised by the pleadings. Mayo v. Harding, 3 Tenn. Ch. 237; Vansciver v. Bryan, 2 Beas. 434; Munday v. Vroom, 5 Vroom, 418; Easley v. Tarkington, 5 Baxt. 592; Marsh v. Mitchell, 26 N. J. Eq. 497; New York, etc., v. Moore, 32 Hun, 29. (6) The law will never construe a possession tortious, but from necessity. McEwen v. Portland, 1 Ore. 300.

Smith & Krauthoff and E. T. Farish for respondent.

(1) This action is an equitable one, was instituted as such, and was so tried and treated before the referee, in the circuit court and court of appeals. Smith v. Kay, 7 H. L. Cases, 750. (2) Relief, on the ground of presumptive or constructive fraud, arising from the condition or relation of the parties, and in the character of the transaction, is peculiarly within the jurisdiction of equity. Hall v. Perkins, 3 Wend. 626-31; 1 White & Tud. Lead. Cas. Eq. part 2 (4 Am. Ed.) p. 827; 1 Story Eq. Jur. (11 Ed.) sec. 190; Billage v. Southel, 9 Hare, 534. And when an agent uses property of his principal in his hands for his own purposes, he commits a breach of trust, the redress of which lies within the jurisdiction of a court of equity. Persch v. Quiggle,57 Pa. St. 247, 258-9; Big. on Fraud, 323; Chaney v. Gleason, 117 Mass. 557-8; Dodd v. Cook, 11 Gray, 495-6. (3) If the defendant applied trust funds in his hands to uses and purposes foreign to his duties as managing agent, the property in which it was invested was impressed with a constructive trust in favor of his cestui que trust. 2 Pom. Eq. Jur., sec. 1051; 1 Perry on Trusts (3 Ed.) secs. 166, 168, 194, 196; Grumley v. Webb, 44 Mo. 444, 451; Garvin v. Williams, 44 Mo. 465, 475. The holder of the property became a trustee ex maleficio. Squires' Appeal,70 Pa. St. 266, 268-9. This trust could only be ascertained and declared by a court of equity. And so equity alone could follow the trust fund into the property into which it had been converted, and enforce the trust against it. Sherwood v. Saxton, 63 Mo. 78, 82-3. (4) The separate property of a married woman can only be charged with and subjected to the payment of a demand, in equity. And even if a court of equity had obtained jurisdiction of the case upon this ground alone, it would have been in all respects triable according to equity rules. Keeton v. Spradling, 13 Mo. 321; Corby v. Bean, 44 Mo. 379. (5) The plaintiff established his case in chief when it was shown that a confidential relation, within the meaning of the rule hereinafter stated, existed between Mrs. Perry and the defendants, during the pendency of which they received these checks, and that they subsequently invested the same in Mrs. Way's name, or for her benefit. Such investment, under these circumstances, constituted presumptively, a “fraudulent conversion.” This was so, independent of any elements of actual fraud or undue influence, actual or presumed, in the transaction. Street v. Goss, 62 Mo. 226, 228-9. It then devolved upon the defendants to show that these checks passed to them by gift or under a contract. The gift or contract claimed would be attended with a presumption of fraud and undue influence, which it devolved upon the defendants to rebut. Miller v. Simonds, 72 Mo. 669; Street v. Goss, 67 Mo. 221; 2 Pom. Eq. Jur., sec. 956; Tate v. Williamson, L. R. 2 Ch. App. 55, 59; Rhodes v. Bate, 1 Ch. App. 252; 1 Story's Eq. Jur. (11 Ed.) sec. 258; Ewell's Evans on Agency, 351; Greenfield's Estate,14 Pa. St. 489; Garvin v. Williams, 44 Mo. 465; 50 Mo. 206; Walker v. Smith, 29 Beav. 394; Bennett v. Austin, 81 N. Y. 308; Bigelow on Fraud, 231; Hugueman v. Baseley, 14 Ves. 273. (6) But even if all consideration of Way's agency and fiduciary capacity, and of a confidential relation between the parties, is excluded and eliminated from the case, before the defendants can hold this large sum as a donation, they must show, first, the donation, and then its validity. Cooke v. Lamotte, 15 Beav. 234, 239, 243; Coutts v. Acworth, L. R. 8 Eq. Cas. 558, 566; Russell's Appeal,75 Pa. St. 269, 279, 280, 287 to 291; Bispham's Eq. (3 Ed.) 292; 2 White & Tud. Lead. Cas. Eq. (4 Am. Ed.) 1188; 1 Dan. Ch. Pl. and Pr. (5 Ed.) *853; 1 Taylor on Evidence (7 Ed.) sec. 151. Nor can defendants escape this rule by invoking the doctrine that possession of negotiable instruments is prima facie evidence of title, for the rule has no place here. Cass County v. Green, 66 Mo. 498; Smith v. Kay, 7 H. L. Cas. 750; Brock v. Barnes, 49 Barb. 524. (7) The defendants have not satisfied the burden of proof which rested upon them. It is utterly impossible to believe that Mrs. Way would not have recollected gifts aggregating $24,500. This money passed into her hands, and equity demanded that she should disclose the circumstances. She had the opportunity, was asked the question, and her failure to do so is equivalent to adverse proof. Henderson v. Henderson, 55 Mo. 534, 559; Cass County v. Green, 66 Mo. 498, 512; Baldwin v. Whitcomb, 71 Mo. 651, 658; Mabury v. McClury, 74 Mo. 575, 591. (8) Under our statutes (sec. 4010, R. S.) Mrs. Way was disqualified to testify in her own favor. Sitten v. Shipp, 65 Mo. 297; Ring v. Jamison, 66 Mo. 429; Ward v. Matthews, 73 Mo. 482; Wade v. Hardy, 75 Mo. 490.

HENRY, C. J.

Mrs. Eliza M. Perry died in February, 1873, in the city of St. Louis, at the age of seventy-six, possessed of a large estate, consisting principally of notes and money. She was a childless widow, and the defendant, Mrs. Mary A. Way, was her cousin, between whom and herself existed intimate and cordial relations. John...