Sunflower Farms, Inc. v. McLean

• Decision Date: 17 March 1958
• Docket Number: No. 40658,40658
• Citation: 101 So.2d 355,233 Miss. 72
• Parties: SUNFLOWER FARMS, Inc., and William C. McLean, v. R. D. McLEAN, Jr., Individually and as Executor of the Last Will and Testament of Irene C. McLean.
• Court: Mississippi Supreme Court

Page 355

101 So.2d 355

233 Miss. 72

SUNFLOWER FARMS, Inc., and William C. McLean, v. R. D. McLEAN, Jr., Individually and as Executor of the Last Will and Testament of Irene C. McLean.

No. 40658.

Supreme Court of Mississippi.

March 17, 1958.

Forrest G. Cooper, Indianola, for appellant.

Charles C. Jacobs, Cleveland, Jas. D. Causey, E. B. Kimpel, Memphis, for appellee.

HALL, Justice.

This suit was brought by the appellee against Sunflower Farms, Inc., William C. McLean and Dave Gordon to set aside a deed from Mrs. Irene C. McLean to Dave Gordon and a subsequent conveyance by him to Sunflower Farms, Inc. on the ground that the deed was without consideration and that the said deeds constitute a cloud upon the complainant's title which is sought to be cancelled, and that he be vested with the full legal title to the lands involved. By an amendment it was also alleged that the three named defendants are vested with the legal title and are claiming full ownership of the land in question, and alleged that they are holding the same as trustees for the benefit of complainant and collecting the rents thereon, for which an accounting is asked.

The lower court granted the relief prayed for, from which action this appeal is prosecuted. There is involved in the suit a tract of approximately 1,400 acres of land.

The background of the suit, as shown by the record, is as follows: R. D. McLean, Sr. had owned the land in question for a great many years, and being engaged in the contracting business, which is a financially hazardous business, he had conveyed the land to his wife, Mrs. Irene C. McLean. In 1952 he had a suit pending in the Federal court wherein he had sued for a large amount of money and the defendant in that suit had filed a counterclaim against him and he was fearful that there might be a judgment against him on said counterclaim, though in fact it does not appear from the record that such judgment was ever rendered. While this suit was pending Mrs. Irene C. McLean suffered a carebral hemorrhage on September 20, 1952, and she was in a critical condition in a hospital at Greenville, Mississippi, for some time. R. D. McLean held a full power of attorney from his wife Irene but he was fearful that she was going to die and that he, being her only heir, would inherit the land and it might be subjected to the payment of any judgment which might be rendered in the pending suit in the Federal court. He accordingly telephoned to his brother, William C. McLean, who is an attorney at law at Tampa, Florida, and he requested his brother to catch the first plane and come to Greenwood, Mississippi, where he would meet him. The brother came and they spent two days together viz. September 23rd and 24th, discussing the affair, and attending to other business. The brother returned to Florida and prepared the deed and mailed it to R. D. McLean and it was executed by R. D. McLean individually and as attorney in fact for Mrs. Irene McLean. A short time later, after Mrs. Irene C. McLean had improved to some extent and had regained consciousness, the brother prepared another deed to be executed in favor of his friend and client, Dave Gordon of Tampa, and notified R. D. McLean that he had decided that he did not want to take the title in his own name. The deed to Dave Gordon is dated September 24, 1952, but was actually not executed and acknowledged until November 6, 1952. W. C. McLean admitted that Dave Gordon was merely a dummy or conduit for the purpose of getting the title into W. C.'s name.

On November 13, 1952, Dave Gordon executed to R. D. McLean a power of attorney fully authorizing him to look after the land, to rent and control it, to collect and handle all income from the land, and he continued in charge of the property without any apparent change until the time of his death of September 9, 1954.

On August 21, 1954, R. D. McLean, who was then apparently in good health, executed his last will and testament whereby his wife Irene C. McLean was devised the fee simple title to all of his property, real, personal and mixed. Nineteen days later, R. D. McLean died suddenly of a heart attack.

In January 1953, R. D. and Irene McLean sold or contracted to sell, in separate tracts, 240 acres of the land in question to A. E. Staggs and Fred Staggs, and on October 22, 1953, William C. McLean wrote a letter to R. D. McLean in which he said: 'I want you to write me whether you have made your income tax return for last year and if you are going to make a return for this year to show the proceeds of rent and capital gains? If you have not done so, you must do this. Dave asked me about this and, of course, he does not want to become involved and neither do I. I suppose the return has been filed but be sure and let me know.' Pursuant to this letter R. D. McLean and Irene C. McLean filed a joint individual income tax return for the calendar year 1953 on March 10, 1954, and in this return they reported all of the rents received from the land in question as being their own income, and they also reported as a long term capital gain the profit on the sale of the land to A. E. and Fred Staggs, as well as interest received, and they took depreciation on the remaining lands, just as if they were the sole owners thereof.

Shortly after the death of R. D. McLean on September 9, 1954, William C. McLean organized in Florida the corporation known as Sunflower Farms, Inc. There are only fifty shares of stock in the corporation and William C. McLean and his wife were each issued sixteen shares and his three children were issued six shares each, making a total of fifty shares which was all of the stock of the company and this stock was valued in excess of $1,700 per share. Strangely, the charter of incorporation does not require that the president thereof be a stockholder. On October 8, 1954, Dave Gordon conveyed to Sunflower Farms, Inc. the land in question and he was elected president of the corporation. According to the record Mrs. Irene C. McLean did not know until after the death of her husband that the property had been conveyed to Dave Gordon. This information was conveyed to her by William C. McLean after the funeral of R. D. McLean.

Shortly after the death of R. D. McLean, Mrs. Irene C. McLean executed her last will and testament in which she named R. D. McLean, Jr. as sole beneficiary. He was an adopted son of R. D. Sr. and Irene. The adoption was handled by William C. McLean as attorney and it specifically provided that R. D. McLean, Jr. should not be an heir of the adopting parents. Mrs. Irene C. McLean died on February 23, 1955, approximately five and one-half months after her husband,...