State ex rel. Brigance v. Smith

• Decision Date: 09 January 1940
• Docket Number: 36752
• Citation: 135 S.W.2d 355,345 Mo. 793
• Parties: State of Missouri at the relation of C. N. Brigance, J. W. Brigance, Mary Haynes, Lee Russell, W. J. Fitzmaurice, James Fitzmaurice, Catherine Fitzmaurice, William Henry Fitzmaurice, Nellie Fitzmaurice, Margaret Fitzmaurice, Patrick Fitzmaurice, Sally Fitzmaurice and Michael Fitzmaurice, O. H. Moberly, Commissioner of Finance, Relators, v. Robert J. Smith, James F. Fulbright, and Perry T. Allen, Judges of the Springfield Court of Appeals, and Jake Huffman and Alvin Huffman
• Court: Missouri Supreme Court

135 S.W.2d 355

345 Mo. 793

State of Missouri at the relation of C. N. Brigance, J. W. Brigance, Mary Haynes, Lee Russell, W. J. Fitzmaurice, James Fitzmaurice, Catherine Fitzmaurice, William Henry Fitzmaurice, Nellie Fitzmaurice, Margaret Fitzmaurice, Patrick Fitzmaurice, Sally Fitzmaurice and Michael Fitzmaurice, O. H. Moberly, Commissioner of Finance, Relators, v. Robert J. Smith, James F. Fulbright, and Perry T. Allen, Judges of the Springfield Court of Appeals, and Jake Huffman and Alvin Huffman

No. 36752

Supreme Court of Missouri

January 9, 1940

Opinion of Court of Appeals quashed in part not necessary to a decision of the case and the writ quashed as to the remainder of the opinion.

Ward & Reeves for relators.

The Springfield Court of Appeals in its opinion lays down the rule as follows: "As a general rule, the jurisdiction of claims affecting estates of the dead is within the probate courts. But there are exceptions to this rule, and where the deceased was insolvent as pleaded and proved, as in this case, and where the property has been disposed of and transferred as in the case at bar, a court of equity is the only forum at which complete relief may be obtained." Further, in said opinion said Springfield Court of Appeals quotes with approval the following: "It is sufficient ground for relief in equity that the legal remedy is not full, complete, and adequate." Further in its opinion said Springfield Court of Appeals quotes with approval the following excerpt as being the law governing this case "The general rule of law is that a simple creditor cannot maintain a suit in equity to set aside a conveyance of a debtor as fraudulent until his demand has been reduced to judgment. Daggs v. McDermott, 327 Mo. 73, 34 S.W.2d 46, and cases cited therein. However, we have recognized that there are exceptions to this general rule as where the defendant is wholly insolvent and therefore it would be useless to proceed at law." This statement of the law by said Springfield Court of Appeals is in direct conflict with the last controlling decision of the Supreme Court in the case of Buckley v. Maupin, 125 S.W.2d 820, in the following particulars: (a) You held in the Buckley case, l c. 824, as follows: "Unless the claim is reduced to a judgment, equity assumes at the outset, without any ground of equity jurisdiction, to ascertain and adjust a merely legal claim. It is no answer to say that the debtor is insolvent. That does not touch the question. Insolvency may be a good excuse for not issuing execution, for that might be a useless act. But to obtain a judgment at law would not be useless." (b) The above statement of the law by said Springfield Court of Appeals is in direct conflict with the further statement of the law as the Supreme Court gave it in the Buckley case, l. c. 826. (c) The learned opinion of the Court of Appeals also conflicts with the following statement of the law as laid down in the Buckley case, supra, l. c 828: "It suffices to say that, keeping in mind the reasons constituting the basis therefor, we think the more logical rule (and, we believe it is supported by the weight of authority) is, that before the claimant be permitted to proceed in equity as a creditor to set aside an alleged fraudulent conveyance he should be required to establish his claim, at law, against the decedent's estate, and himself as a subsisting creditor, and thereupon, if the estate is insolvent, he is entitled to invoke the aid of equity." (d) The conclusions of law arrived at by the learned Springfield Court of Appeals is also in conflict with the conclusions of law stated by the Supreme Court in the Buckley case, supra, wherein you say, l. c. 828: "Plaintiff herein has not established her claim against the estate at law and does not come into equity as a subsisting creditor. Nor is there any allegation that the validity of the claim is acknowledged or admitted or other ground alleged to excuse the prior establishment of her claim against the estate in one of the methods prescribed by law. Under the circumstances the allegation that the estate is insolvent is not alone sufficient to give a court of equity jurisdiction. Wherefore we must hold that the demurrer was properly sustained on the ground that the petition does not state facts sufficient to constitute a cause of action. The judgment of the circuit court is affirmed."

C. G. Shepard for respondents.

(1) The relation between the Bank of Caruthersville and J. H. Brigance and Ikie P. Brigance, his wife, was that of principal and agent and made the bank a trustee for Brigance and wife and placed upon the bank the obligation of protecting the interest of the parties for whom it was acting and it did not have the right to use its authority as agent or as trustee to the detriment of the parties for whom it was acting and for its own interest. Therefore it was a breach of trust when the bank sold the property in question under a deed of trust in which transaction it became the owner of the property belonging to the party for whom it purported to act and the party whose duty it was to protect. Such being the fact it was a trust relation of which a court of equity has jurisdiction. Walton Bank & Trust Co. v. Amer. Hereford Cattle Breeders Assn., 129 S.W.2d 1090; State ex rel. Mills v. Allen, 128 S.W.2d 1046; Sanford v. Van Pelt, 314 Mo. 175, 282 S.W. 1022; Liflander v. Bobbitt, 111 S.W.2d 72. (2) Where the law does not afford full and complete relief equity will assume jurisdiction in order that full and complete relief may be awarded in one cause of action. We presume that it will not be contended that the probate court has jurisdiction to award possession of land to party out of possession or try title to real estate, consequently the only court having full and complete jurisdiction of the entire contention is a court of equity. Hanson v. Neal, 215 Mo. 256, 114 S.W. 1073; Broadway Bank v. Slater, 17 S.W.2d 591. (3) A party holding a deed of trust on real estate has the right to invoke the jurisdiction of a court of equity in his behalf to foreclose his deed of trust. Thorn & Hunkin Lime & Cement Co. v. Citizens Bank, 158 Mo. 272, 59 S.W. 109. (4) We realize that the general rule of law is that a simple creditor cannot maintain a suit in equity to set aside a conveyance of a debtor as fraudulent until his demand has been reduced to judgment. However, there are well recognized exceptions to this general rule and respondents say that the facts in this particular case bring it within the exception and a court of equity has jurisdiction under the facts in this case. Farmers & Traders Bank v. Kendrick, 108 S.W.2d 62; C. Bewes, Inc., v. Buster, 108 S.W.2d 66; Ward v. Davidson, 89 Mo. 454; Miller v. Woodward and Thornton, Admrs., 8 Mo. 169; Clay v. Walker, 6 S.W.2d 961; Barnard v. Keathley, 230 Mo. 209, 130 S.W. 307; In re Glover, 127 Mo. 153, 25 S.W. 982; Tufts v. Latshaw, 172 Mo. 359, 72 S.W. 679; Burnhan, Munger & Co. v. Smith, 82 Mo.App. 35; Kankakee Woolen Mill Co. v. Kampe, 38 Mo.App. 229; White v. University Land Co., 49 Mo.App. 450.

OPINION

Hays, J.

This is a proceeding in certiorari directed to the Judges of the Springfield Court of Appeals to quash their opinion in the case of Huffman v. Brigance, reported in 128 S.W.2d 639. The case under review was a suit in equity in which the plaintiffs sought to reinstate the lien of a certain deed of trust upon real estate in Pemiscot County, Missouri, the legal title to which is held by a trustee for certain of the defendants, relators here, who are heirs at law of one J. H. Brigance, deceased, the mortgagor in the instrument sought to be reinstated. The opinion of the Court of Appeals states the facts in detail. We have epitomized them.

In 1922 J. H. Brigance, being the fee simple owner of the land involved, executed a first mortgage thereon to the St. Louis Joint Stock Land Bank. In 1926 he gave a second deed of trust to the Blytheville Agricultural Credit Corporation. The following year he gave a third deed of trust to the Bank of Caruthersville, and in 1929 a fourth deed of trust to the plaintiffs. Brigance's wife joined in all of these deeds of trust and in 1929, when the fourth deed was placed on the land, the three former deeds were unpaid and constituted subsisting liens.

In 1924 Brigance obtained a policy of insurance upon his own life in the principal sum of $ 10,000, his wife Ikie P. Brigance being named therein as the beneficiary. In 1934, after the execution of all four of the deeds of trust mentioned and while all of them were outstanding and unpaid, Brigance, exercising his option as granted in the policy, changed the beneficiary and named as such H. V. Litzelfelner, Cashier of the Bank of Caruthersville. The policy was then deposited with the bank as further security for the indebtedness to it of Brigance.

In 1933 the bank took an assignment of the second deed of trust held by the Agricultural Credit Corporation and caused the same to be foreclosed. At the sale the bank became purchaser of the land. The respondent judges have found that the amount of the purchase price -- $ 2000 -- was then charged by the bank against the account of Brigance. The bank continued to carry this charge against Brigance on its books and its officers managed the land, collecting the rents and profits therefrom, and out of them paying taxes and other expenses of management.

Ikie P Brigance died in 1931 and J. H. Brigance in August, 1934. Neither of them left a will and both were insolvent at the time of their death. No administration was ever had upon the estate of either J. H. Brigance or his wife. Upon the death of J. H. Brigance, Litzelfelner collected from the insurance company the face amount of the above-mentioned life insurance policy, less an...