Wrigley v. Wrigley

• Decision Date: 03 November 1939
• Docket Number: 35998
• Citation: 132 S.W.2d 989,345 Mo. 207
• Parties: Lola Wrigley v. Alva Wrigley and Elias Wrigley, Appellants
• Court: Missouri Supreme Court

132 S.W.2d 989

345 Mo. 207

Lola Wrigley v. Alva Wrigley and Elias Wrigley, Appellants

No. 35998

Supreme Court of Missouri

November 3, 1939

Appeal from Andrew Circuit Court; Hon. R. B. Bridgeman Judge.

Affirmed.

Breit & Roberts for appellants.

(1) In a case where fraud is charged, fraud is not presumed, but must be proved, and the burden of proof is upon the plaintiff. Albert v. Besel, 88 Mo. 153; Robinson v. Dryden, 118 Mo. 539; Bank v. Worthington, 145 Mo. 100; Mansur-Tebbetts Imp. Co. v. Ritchie, 143 Mo. 611. (2) Where on a charge of fraud, the evidence is as consistent with honesty as with dishonesty it will be construed in favor of the former. Webb v. Darby, 94 Mo. 621; Robinson v. Dryden, 118 Mo. 539. (3) Where in such case, there is doubt as to the construction to be given to the conduct of the parties, it should be resolved in favor of the defendant. Webb v. Darby, 94 Mo. 621; Robinson v. Dryden, 118 Mo. 539. (4) It is the settled law in this State, that a debtor may prefer one creditor over another, by direct payment or transfer of property, providing the property is taken in satisfaction or assumption of a just demand, and not as a mere scheme to secure the property to the debtor. Wall v. Beedy, 161 Mo. 637; Shelley v. Booth, 73 Mo. 74; Albert v. Besel, 88 Mo. 150; Burston v. Fennewald, 2 S.W.2d 824; Wood v. Porter, 179 Mo. 65; Meyer Bros. Drug Co. v. White, 165 Mo. 136; Bangs Milling Co. v. Burns, 152 Mo. 350. (5) Conveyance of son's property to father for payment of bona fide debt if accepted in good faith by the father is valid, even though the son intended thereby to hinder and delay other creditors and the father knew of son's intent. Burston v Fennewald, 2 S.W.2d 824. (6) Parol testimony is admissible to explain the consideration expressed in the deed. Kincaid v. Irvine, 140 Mo. 615; Baile v. St. Joseph F. & M. Ins. Co., 73 Mo. 371; Edwards v. Smith, 63 Mo. 119; Aull Saving Bank v. Aull's Admr., 80 Mo. 201; O'Day v. Conn, 131 Mo. 327. (7) Party relying on gift must prove that the transaction was a gift by evidence which is clear and unequivocal, and establishes such fact beyond reasonable doubt. Cremer v. May, 8 S.W.2d 110; Morley v. Prendiville, 316 Mo. 1094, 295 S.W. 563; Tygard v. Falor, 163 Mo. 234, 63 S.W. 672; Townsend v. Schaden, 275 Mo. 227, 204 S.W. 1076; Newell v. Edom, 242 S.W. 701.

Lloyd W. Booher and Ralph R. Hulse for respondent.

(1) Voluntary conveyance is fraudulent as to existing creditors, regardless of intent, if conveyance leaves debtor without means to pay debts. Friedel v. Bailey, 44 S.W.2d 9, 202 Mo. 309. A conveyance without consideration is constructively void as to existing creditors when made by debtor under embarrassing circumstances. Herley v. Taylor, 78 Mo. 238; Barber v. Nunn, 205 S.W. 14. (2) Equity court must examine most carefully circumstances surrounding conveyances between close relatives which injuriously affect creditors' rights. Daggs v. McDermott, 34 S.W.2d 46. Under this section a father may give valid preference to his son but relationship of parties to transfer which defeats just claims of other creditors is circumstance to be considered in determining good faith of transaction, which must be closely scrutinized by court, where fraud is charged by defeated creditors. Koenig v. Oswald, 82 F.2d 85; Matz v. Miami Club, 128 S.W.2d 975; Black v. Epstein, 221 Mo. 286; Munford v. Sheldon, 9 S.W.2d 907. (3) While debtor has rights to prefer one creditor to another by applying property to payment of his debt to exclusion of others, if creditor, knowing of debtor's insolvency, aids debtor in concealing property from other creditors, transaction is fraudulent. Friedel v. Bailey, 44 S.W.2d 9. Payment of valuable consideration does not protect grantee when he has knowledge of intent to defraud creditors and participation therein. Emlet v. Gillis, 63 S.W.2d 12. (4) Transactions between parties occupying intimate and confidential relationship are subject to close scrutiny. Lavette v. La Force, 71 Mo. 353. A false recital as to the consideration in a deed or an unusual method of transacting business are "badges of fraud." Snell v. Harrison, 16 S.W. 152.

Dalton, C. Hyde and Bradley, CC., concur.

OPINION

DALTON

This is a suit in equity to set aside an alleged fraudulent conveyance of real estate. Plaintiff is the former wife of defendant Alva Wrigley. Alva Wrigley and Elias Wrigley, his father, are defendants. Plaintiff, on November 21, 1935, had obtained a decree of divorce, the custody of two minor children, and a judgment against Alva Wrigley for $ 25 per month, beginning March 1, 1936, for support and maintenance of said minor children. The present suit was instituted after six monthly installments accrued under the judgment and remained unpaid. The deed sought to be set aside was from Alva Wrigley to his father, and conveyed a house and lot located in the city of Savannah, Andrew County Missouri (hereinafter referred to as the town property).

At the time the divorce was granted a property settlement was made. Plaintiff took a 159-acre farm, and Alva Wrigley the town property, but plaintiff paid a difference of $ 1500 in cash. After the decree was entered the plaintiff executed and delivered a conveyance to Alva Wrigley covering the said town property and Alva Wrigley executed and delivered to plaintiff a deed to the 159-acre farm on which the parties had resided.

Before any installments of maintenance accrued under the said judgment, defendant Alva Wrigley paid the attorney's fees, the court costs, the temporary alimony, and certain creditors. Thereafter, by quitclaim deed reciting a consideration of $ 1 he conveyed the said town property to his father and divested himself of all his assets.

The trial court found that the deed was executed without consideration for the purpose of defrauding plaintiff and defeating her in the collection of her said judgment; and that the conveyance was accepted by Elias Wrigley with the full knowledge of the intention and purpose of Alva Wrigley to so defraud plaintiff. The court declared the deed to be fraudulent and void and ordered the same canceled and set aside. After unsuccessful motions for a new trial and in arrest of judgment the defendants have appealed.

Appellants contend that Alva Wrigley was indebted to his father; that he had the right to prefer his father as a creditor; that the conveyance was made and accepted in good faith, in payment of a preexisting debt; and that it was not in fraud of respondent's rights, or to hinder, delay or defraud any creditor.

In view of appellants' contentions the determinative question in the instant case is one fact, as to whether or not at or before the conveyance in question, Alva Wrigley was indebted to his father Elias Wrigley. In an equity case we are not bound by the findings of the chancellor, but will review the record and reach our own conclusions as to the weight and value of the evidence. We must give due deference, however, to the findings below, since the trial chancellor had an opportunity to see the witnesses and to hear and observe these witnesses on the stand. [Fessler v. Fessler, 332 Mo. 655, 670, 60 S.W.2d 17, 23; People's Bank of Memphis v. Jones, 338 Mo. 1048, 1055, 93 S.W.2d 903, 907.]

Respondent and Alva Wrigley were married in 1928. In 1929 they purchased the said town property for $ 3000. Appellant Elias Wrigley furnished $ 1050 to be used in buying the property. Respondent testified that the money was a gift; and that Elias Wrigley said his other son had gotton that much money and that he wanted to give Alva some money. Respondent was corroborated by one Mrs. Hulse who testified that Elias Wrigley stated that his other son "had been given plenty," and had said to Alva and respondent, "I am giving this to you kids." The father and son denied that any such conversations took place.

At the time the town property was purchased Alva Wrigley was expecting an inheritance from his maternal grandfather's estate, and, shortly thereafter, he received a total of $ 11,000 from said estate. When these funds were received the father made no demand for payment of the son's alleged indebtedness, and the son made no effort to pay the father, either principal or interest, although for a time, by reason of the inheritance, the son became worth more than the father. Alva Wrigley purchased a farm, with part of his inheritance, and thereafter resided on it. Alva and his father farmed together and the father kept some of his stock on Alva's farm. It was fed by Alva. During this period the father, from time to time, furnished money to his son: $ 262.50 on a Ford truck, $ 100 on an International truck, $ 43 for an installment on a truck, $ 147 for interest on a mortgage on the farm, $ 260 for expenses in roofing the barn, $ 30 on the purchase price of two horses, and various payments of money totaling $ 85. Elias Wrigley also gave his son twenty-four shoats worth $ 3 each, a cow worth $ 150, a cow and calf worth $ 82, 100 posts worth $ 18, seed oats worth $ 10, and other minor items. Elias Wrigley conceded that the cows and calf and some minor items were gifts, but insisted that the remaining items were charged to his son. The father testified that he expected to be repaid "Whenever they could get hold of it to pay up, if it was not too long." The son testified, "I always had that intention, that if I was ever able . . . I was going to return it to him." However, the father made no demand for payment and kept no account. The father admitted that he relied on the son's memory as to the amount of the alleged indebtedness.

Although appellant Alva Wrigley received the inheritance of $ 11,000 and later, at the time of the settlement with respondent received $ 1500 in cash, ...