Shanklin v. McCracken

• Decision Date: 14 July 1899
• Citation: 52 S.W. 339,151 Mo. 587
• Parties: SHANKLIN v. McCRACKEN et al.
• Court: Missouri Supreme Court

52 S.W. 339

151 Mo. 587

SHANKLIN v. McCRACKEN et al.

Supreme Court of Missouri.

July 14, 1899.

APPEAL IN EQUITY — REVIEW — FRAUDULENT CONVEYANCE.

1. On appeal in equity, where all the evidence is open to review, the appellate court, while not concluded by the judgment below, will accord it proper deference, because, the testimony being oral, the court below can better weigh the same.

2. Where a conveyance was made by a son to his father as trustee, to enable the son to get rid of his wife's dower, and no consideration was paid, the property remains subject to the claims of the son's creditors.

In banc. Appeal from circuit court, Sullivan county; W. W. Rucker, Judge.

Action by Nathaniel Shanklin against Catherine McCracken and others. Judgment for plaintiff. Defendants appeal. Affirmed.

This case is here upon second appeal. Upon the first trial in the circuit court the plaintiff obtained judgment, which was reversed by this court on appeal because of the exclusion by the circuit court of the testimony of Catherine McCracken, widow of John A. McCracken, as to the delivery of a deed to her husband by her son James McCracken. 140 Mo. 348, 41 S. W. 898. On a trial anew in the circuit court, the plaintiff again had judgment, and defendants appealed.

The facts, briefly stated, are these: On and prior to June 19, 1888, James McCracken was heavily in debt. He owed his father, John A. McCracken, about $4,000, which was unsecured. He owed Shanklin & Austin, his bankers, about $5,000 which was secured, and about $6,000 which was unsecured. He was having serious trouble with his wife, Laura, who threatened him with legal proceedings and with personal violence. It was deemed advisable to devest her of her dower interest in his property. Accordingly it was arranged that she should join him in conveying his property to some third person, and that he should join her in conveying 140 acres of land she owned in Sullivan county to some one else, so as to cut out his interest in her property. W. E. Austin, of the banking firm of Shanklin & Austin, was his special friend and adviser; and E. M. Harber acted as his attorney, while John P. Butler acted as her attorney. Austin furnished the $700 which it was agreed he should pay his wife for relinquishing her dower in his land. It was discussed for quite a while as to who should be the grantee in the deed from him and his wife. Austin and Harber and Shanklin were suggested, but were not selected as the grantee. After considerable delay, John A. McCracken was agreed upon as the grantee, his name was inserted in the three deeds, which had been prepared previously, and the deeds were left in the hands of James McCracken. John A. McCracken lived in the country, and knew nothing of the deeds at or before the time of their execution. James McCracken had a box in Shanklin & Austin's bank, in which he kept his deeds and other valuable papers; and John A. McCracken had an envelope in the same bank, where he kept his papers. There is testimony to show that James McCracken and Austin had previously discussed the former's financial condition, and that it was contemplated that, as soon as his wife's dower was devested, he should borrow money in the East at a low rate of interest, so as to pay up his debts, including what he owed Shanklin & Austin. The testimony of all the witnesses (Austin, Harber, Butler, and James McCracken) who were present when the deeds were made shows beyond any reasonable doubt that the purpose in making the deeds was simply to devest the dower interest of the wife of James McCracken, and nothing whatever was said at that time or before about conveying the property to secure what James McCracken owed his father, John A. McCracken. Immediately after the deeds were made, they were placed in James McCracken's box in the bank. None of the three deeds was recorded prior to September 4, 1889, the day on which John A. McCracken died. One of them was filed for record on the 23d of August, 1890, and the other two on the 22d of December, 1890, the day on which the land was sold by the sheriff under the plaintiffs' execution against James McCracken. The defendants base their claim that the deeds were delivered to John A. McCracken upon the testimony of James McCracken, his mother, Catherine McCracken, and his sister, Mattie McCracken. James McCracken testified that after the deeds were executed he carried them to his father's residence, in the country, and there delivered them to him, and that his father handed them back to him and told him to put them where they would be safe, and that the next day he took them back to the bank, and placed them in his (James') box in the bank, where they remained until August, 1890, when, by direction of his brother, who was the administrator of his father's estate, he (James) took them out of the box, and had one of them recorded. It appears, however, from a deposition of James McCracken which had been taken in the early stages of this litigation, that he said then that it was not the intention, when the deeds were made, that they were to be delivered to his father. Catherine McCracken testified that her son James brought two deeds to their residence in the country, and gave them to her husband, John A. McCracken, while he was standing by the well; that she did not read the whole of the deeds, but did read enough of them to see that they were from "Jim and his wife" to her husband; that Jim stayed all night, and she saw something like deeds in some of his clothing which was lying on the bed; that she could not remember what her husband did with them after her son gave them to him. Mattie McCracken testified that she was not at home the day James brought the papers, but that the next morning, when she was cleaning up the room in which James had slept the night before, she picked up his coat off the carpet; that "the papers were a little bit slipped out of the coat"; that her mother was present, and wanted to examine the papers, but she said "them were Jim's"; that, when her mother "slipped them part of the way out, I saw they were the size of deeds," but she did not examine them. After John A. McCracken's death, the assignees of Shanklin & Austin, who had failed, brought suit against James McCracken to recover what he owed the bank, and on the 3d of May, 1890, obtained judgment against him for $7,849.77, and caused execution to issue thereon, under which, on the 22d of December, 1890, the sheriff sold the land, and Nathaniel Shanklin, one of the assignees, became the purchaser, as trustee for J. H. Shanklin and W. E. Austin, the assignors; the assignment having been closed, and all debts and liabilities of the bank having been paid. Thereafter this suit was brought against the legal representatives and heirs of John A. McCracken to set aside the conveyance from James McCracken to John A. McCracken, and to vest the title in the plaintiff. The answers of the defendants, except that of the administrator, admitted the execution of the deed, and denied all the other allegations of the petition. The answer of the administrator claims that the deed from James to his father, though absolute in form, was intended as a mortgage to secure what James owed his father, and that as Austin advised the making of the deed so as to get rid of the dower interest of his wife, and furnished James the $700 needed for the purpose, "the plaintiff is estopped from asserting or maintaining that said deeds were executed in fraud of the rights of plaintiff or his assignors, and from denying that said deeds were made, executed, and delivered as security for the payment of the indebtedness due by said defendant James to his father, said John A. McCracken...