Opinion
No. 42159.
September 10, 1951. Rehearing Denied October 8, 1951.
APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY, HONORABLE JOHN R. JAMES, J.
Gresham, Hizer Boughan and Walter J. Gresham, Kansas City, for appellants.
Charles V. Garnett, Kansas City, for respondent.
Defendants below have appealed from an adverse judgment determining title to and ordering partition of real property. Their assignments here are that the trial judge erred in overruling their "objections to the jurisdiction" and that "the decree is not supported by either the facts or the law."
Defendants' "objection to the jurisdiction of the trial court" is actually a challenge to the sufficiently of the petition in one particular. They say: "Plaintiff sues in equity but the only allegation with reference to the lack of legal remedy is that `plaintiff has no plain, adequate and complete remedy at law in the premises, and, unless granted relief in equity as herein set forth, will suffer great and irreparable loss, harm and damage,' and that amounts to nothing more than a conclusion."
The petition alleged: that prior to March 24, 1948, plaintiff Feeney and defendant Helen James were husband and wife and owned real estate by the entirety, subject to a first mortgage of approximately $3,900; that the reasonable value of the property was $5,000, leaving the equity approximately $2,100 (obviously $1,100 was intended); that on March 24, 1948, Mrs. Feeney was granted a divorce in Division No. 6 of the Circuit Court of Jackson County, her maiden name was restored, and, by agreement, the decree included a judgment in her favor against Feeney for $100 for her attorney's fee; that he and she then became tenants in common, subject to the mortgage, and that his interest was subject to the lien of said $100 judgment; that, "at the time said decree of divorce was entered, plaintiff and defendant Helen James agreed that the real estate should be sold by joint conveyance, and from the proceeds of said sale, and of the interest of this plaintiff therein, said $100.00 judgment against plaintiff would be satisfied, the remaining proceeds to be divided between plaintiff and defendant Helen James in accordance with their respective interests in and to said real estate."
Plaintiff alleged: that, on the same day her divorce was granted, Miss James filed a suit against him in the Circuit Court of Jackson County "wherein and whereby defendant Helen James elected to seek partition, of said real estate, and did seek such partition, thereby conferring jurisdiction upon said court in said partition suit to settle and adjust the rights, equities and liens of the parties thereto in said suit and satisfy the same by the sale of said real estate in partition; upon the filing of said partition suit it became and was the duty of defendant Helen James to assert her lien upon the interest of plaintiff in said real estate accruing to her by virtue of her judgment for $100.00 in said divorce decree, by proper pleading in said partition suit, and the court in which said partition suit was pending became clothed with full and complete and exclusive jurisdiction over the subject matter thereof, namely, said real estate, for the purpose of settling and adjusting all rights and equities and liens of the parties thereto, including the lien of said judgment for $100.00 credited by said divorce decree.
"Notwithstanding the pendency of said partition suit and the exclusive jurisdiction of the court over the subject matter thereof, defendant Helen James, without warrant or authority of law, on or about May 17, 1948, caused an execution to be issued against this plaintiff and a levy to be made thereunder," resulting in the purchase, at the sheriff's sale, by Miss James of his interest for $100; that the sheriff's deed was void in that, at the time of its execution, "exclusive jurisdiction over the real estate and exclusive jurisdiction to settle and adjust all liens between the parties thereto upon the real estate," including defendant Helen James' $100 judgment in the divorce case, was vested in the court in said partition suit.
"On August 27, 1948, and while said partition suit was still pending, defendant Helen James made, executed and delivered her warranty deed to defendants Oley Cook and Rowena Cook purporting to convey to said defendants the said real estate, and purporting to sell and convey to defendants Cook the interest of plaintiff therein; that defendant Helen James had no title to nor right to convey the said interest of plaintiff to defendants Cook because of the pendency of said partition suit; that defendant James knew, or in the exercise of ordinary care could and should have known, of the pendency of said partition suit, the exclusive jurisdiction of the court in said partition suit over said real estate, the invalidity of said sheriff's deed, and the fact that defendant Helen James had title only to an undivided one-half interest in and to said real estate at the time of receiving said warranty deed.
"After said purported execution sale had been consummated, and after defendant Helen James had attempted to convey to defendants Cook all right, title and interest of this plaintiff in and to said real estate and on September 24, 1948, the court in which said partition suit was then pending, upon the motion of defendant Helen James, dismissed said partition suit without prejudice.
"Plaintiff states that all of the acts of defendant Helen James as herein before set forth are and were fraudulent as to the rights of this plaintiff; that defendant Helen James had voluntarily agreed with plaintiff that said real estate would be sold by joint conveyance and from the proceeds of such sale and from this plaintiff's interest therein said $100.00 judgment in said divorce decree would be paid and satisfied; and that defendant Helen James well knew, at the time she caused said execution to be issued, that plaintiff was relying upon the fact that the exclusive jurisdiction over said real estate was then lodged in the court where said partition suit was pending; and that defendant Helen James caused said execution to issue without the knowledge or information on the part of this plaintiff, and plaintiff did not know of the issuance of said execution, and did not discover the issuance thereof by reason of the fraudulent acts and conduct of defendant Helen James as herein set forth; that the purported consideration paid by defendant Helen James for said sheriff's deed was and is so grossly inadequate as to shock the conscience.
"Plaintiff has no plain, adequate and complete remedy at law in the premises, and, unless granted relief in equity as herein set forth, will suffer great and irreparable loss, harm and damage.
"By reason of all of the foregoing, plaintiff is entitled to the judgment and decree of this court declaring and determining that plaintiff is the owner of an undivided one-half interest in and to the real estate herein before set forth subject only to said first mortgage lien and subject only to the lien of said $100.00 judgment contained in said divorce decree, and that the ownership and interest of plaintiff in and to said undivided one-half interest is superior to any other right, claim or demand of the defendants or either or any of them therein; that by said decree it be determined and adjudged that defendant Helen James acquired no right, title or interest under said purported sheriff's deed, and that defendants Cook, by their warranty deed aforesaid, acquired only the right, title and interest of defendant Helen James in and to said real estate; that said real estate cannot be partitioned in kind; and that by said judgment and decree herein the court make partition between plaintiff and defendants.
"Wherefore, plaintiff prays the court to declare and determine that defendant Helen James has no right, title or interest in and to the said real estate except only her lien thereon to the extent of $100.00 by reason of said divorce decree; that plaintiff is the owner in fee of an undivided one-half interest in and to said real estate subject only to said first mortgage lien and the lien of said $100.00 judgment in said divorce decree; that defendants Oley Cook and Rowena Cook are the owners of the other undivided one-half interest in and to said real estate; that said real estate cannot be divided in kind; and that partition be made between plaintiff and defendants Cook of said real estate; and that the court make and enter such other and further orders, judgments and decrees in the premises as may be just and proper."
The factual allegations of this petition clearly show that Feeney's cause was one to have the sheriff's deed declared void in toto and Miss James' deed to the cooks declared ineffective insofar as it purported to convey Feeney's undivided one-half interest. The petition contains no allegations showing that the sheriff's deed was void on its face, which would afford plaintiff a remedy at law. Contrast Benton County v. Morgan, 163 Mo. 661, 64 S.W. 119. Defendants concede that the action was one in equity, and the petition shows that Feeney's case was based upon Miss James' alleged fraudulent acts and conduct and the Cooks' constructive notice of the pendency of the partition suit. Feeney was properly in a court of equity. There could be no partition if Feeney failed to establish his equitable claims against defendants. The petition shows that Feeney had no legal remedy that was "plain, adequate, complete, efficient and not circuitous." State ex rel. Place v. Bland, 353 Mo. 639, 183 S.W.2d 878, 890. It shows that he had no legal remedy at all. We overrule this assignment.
As stated, plaintiff's cause was one for equitable relief from the consequences of Miss James' alleged fraudulent conduct. The trial judge found the facts to be as alleged in the petition. We, reviewing this equity case de novo, must weigh the evidence, giving regard to the trial judge's opportunity to observe the witnesses and judge their credibility. The issue requires that the facts be fully summarized. As defendants refused to participate in the trial, offered no evidence and made no cross-examination, the facts are uncontroverted.
A few days before the divorce case was set for hearing, the Feeneys and their respective attorneys met in the office of her attorney, Walter J. Gresham, to discuss a property settlement. At that time the $100 fee for Gresham was agreed upon. "It was to be paid out of the proceeds of the sale of their joint property, meaning the real estate," according to witness Robert L. Holder. Holder was Feeney's attorney in the divorce and partition cases but not in the instant case. Holder's account of the conversation on that occasion was: "The first consideration was the payment of an attorney's fee. I advised Mr. Feeney to agree and it was agreed. There was a discussion about some furniture which belonged to Mr. Feeney and which was then in the possession of Mrs. Feeney's family. There was a discussion as to the sale of that property by private sale, and the value of the property. It was agreed that the value was somewhere between $5000 and $5500, subject, of course, to a mortgage of about $3800. * * * Upon receipt of the proceeds of the sale, the attorney's fees would be paid, both Mr. Gresham's and mine."
Holder appeared for Feeney at the divorce hearing. "On the same day and later that evening, Mr. Feeney called me to advise that he had been served with process in a partition suit concerning the real estate. I called Mr. Gresham, and he advised me that that was the purpose of doubly securing to him the $100 attorney's fee. * * After I filed a pleading in the partition suit, Mr. Gresham and I discussed the matter several times on the telephone, that we would enter into some amicable and private sale of the property, provided, of course, we could get a buyer to pay the amount which we considered it worth. That situation went on for several months. * * * After Mr. Gresham and I had discussed the matter on March 24th, we began to look for buyers, Mr. Gresham, on his part and I on Mr. Feeney's part." In another conversation with Gresham, it was agreed that "we would enter into some private sale at a price between $5000 and $5500. In may, there was an offer of purchase by a signed contract and the tender of a down payment."
That contract, dated May 5, 1948, was for the sale by Feeney and Miss James to Raymond J. Jensen, consideration $5,000, $3,918 of which was in assumption of the mortgage debt. It was undoubtedly a bona fide offer. The proposed contract was signed by Feeney and Jensen but, said Holder, the deal "was not consummated because Helen James never would sign it. Mr. Gresham was told of it by telephone and he said he would discuss the matter with his client and that I would hear further from him. Eventually, he said his client would not enter into such a contract."
There were other negotiations between the two attorneys after Gresham told Holder that Miss James had refused to sign the Jensen contract. Holder said, "I do not recollect the exact date, but approximately a months thereafter a discussion was had as to the possibility of Mr. Feeney buying out Mrs. Feeney or Mrs. Feeney buying our Mr. Feeney." Once Gresham made an offer of $100 for Feeney's interest. Next, Gresham made this offer by letter, dated April 28, 1948, to Holder:
"Confirming our telephone conversation of today, you are advised that Helen James is willing to sell her half interest in the house at 5615 East 10th Street, at the price of $5500.00 for the whole. It is our understanding that any money received from this sale is to be impounded, either in the bank or in the hands of some other depository to be agreed upon, until the differences between the parties are settled. It is to be understood that the balances of the loan at the Taylor Credit Union, which is approximately $300.00 is to be deducted from the purchase price, so that the parties bear the payment equally.
"The costs and attorney fees in the divorce suit are to be paid out of the share of your client; out of his share is also to be paid the costs of the partition suit now pending, including a fee for her attorney. (The usual partition fee is five percent of the value of the property. I will accept $150.00 if he pays in accordance with foregoing.) Your client had sole use of the property following separation, while mine had to go pay for a place to stay, consequently, the sum of $50.00 is to be charged to him as her share of the rental value for that time. She has paid the amount of $40.00 for him for tires, tubes, car repair, Christmas present for his folks, and this is to be charged to him, which will be itemized on request. He also contracted on June 14, 1947, to pay an attorney fee of $100.00 to Lyman Friedman, which is to be charged against his share.
"If he wishes to sign the sale contract under the foregoing conditions, let me know, and we will have my client sign and we will draw up an escrow agreement containing the conditions above outlined, and sale can be made to the prospective customer if he qualifies. You may inform him that it is entirely immaterial to us whether we proceed this way, or by way of the partition suit or other legal steps. We will do it either way he prefers."
Feeney accepted this offer and gave Holder a cashier's check for $600 "in the very latter part of June or early in July — around the first of July." Holder then informed Gresham that he was ready to carry out the agreement and requested him to secure Miss James' quitclaim deed, "which he refused to do for the reason that his client would not perform, although he had made me the proposition."
During these negotiations, neither Feeney nor Holder knew that the execution had been issued. Gresham never mentioned to Holder "that he had had an execution issued on that judgment or that he had a sale pending." After the negotiations ceased, Holder learned that the place had been advertised for sale under execution in June and July. "During that time, I had a pleading on file in the partition suit. * * * In fact, at the time the execution was issued on May 17, 1948, the partition suit was pending, and had been from the day of the divorce, March 24. I learned of the execution matters about ten days before the partition suit was dismissed, about September 13, 1948, the last day of the May, 1948, term of the circuit court, at Kansas City. * * * I was in the sheriff's office discussing another matter with the sheriff's attorney and, while sitting there, observed the report of the sheriff on this sale, which had been filed that day, and a copy of it was lying on the attorney's desk. * * * I called Mr. Gresham's office, but could not reach him, and then prepared a motion to quash the report and the deed and filed it that same day."
From the day of the initial conference (in which the property settlement and the allowance of Gresham's $100 fee in the divorce suit were agreed upon), Feeney and Miss James continued to assert other claims against each other. They did so in their attorneys' negotiations and in their pleadings in the partition suit. In her petition, Miss James claimed advancements to Feeney of "large sums of money, for the purpose of purchasing and maintaining said property," demanded an accounting therefore, and prayed that his interest be charged for such advancements and also the value of "his sole use of the property after February 11, 1948." In his cross-petition in that case, Feeney counterclaimed for $309, value of furniture allegedly owned by Feeney and appropriated by Miss James. In her motion to strike this cross-petition, Miss James countered by asserting that Feeney had conveyed the furniture to her in writing.
The propriety of these claims in a partition suit is not in issue here. However, they were involved in the negotiations between the two attorneys, and are significant in one other respect. They emphasize Miss James' act in deliberately omitting, from her partition petition, mention of her claim for Gresham's $100 attorney's fee and a request that such claim be charged against his interest, as she did of her other claims against him.
Our conclusions can be briefly stated. "To every thing there is a season and a time to every purpose under the heaven: * * * A time to keep silence, and a time to speak." Ecclesiastes, 3:1, 7. "A fraud can be perpetrated by silence when duty requires one to speak as well as by speaking falsely." Beil v. Gaertner, 355 Mo. 617, 197 S.W.2d 611, 616. In view of her agreement that Gresham's fee was to be paid out of the proceeds of a sale of the property, Miss James was obligated to disclose to Feeney that she had repudiated that agreement and intended to enforce payment of the $100 judgment by execution. Instead, she "actively concealed" what she was doing. See Vendt v. Duenke, Mo.App., 210 S.W.2d 692. The negotiations obviously were not in good faith on her part. She filed and kept pending the partition suit and prolonged the negotiations until both suit and negotiations had served their purposes. Such deliberate and studied concealment of the facts of the execution proceedings, of her purchase at the sale and of her conveyance to the Cooks constituted a fraud upon Feeney.
Recently, this court said: "It is a general doctrine that, if either party to a transaction conceals some fact which is material, which fact is within his own knowledge, and which it is his duty to disclose, he is guilty of fraud. * * * `If in addition to the party's silence there is any statement, even any word or act on his part, which tends affirmatively to a suppression of the truth, to a covering up or disguising the truth, to a withdrawal or distraction of the other party's attention or observation from the real facts, then the line is overstepped, and the concealment becomes fraudulent.' Vol. 3, Pomeroy's Equity Jurisprudence, 5th Ed., §§ 901-901a, pp. 545-549; Ellenburg v. Edward K. Love Realty Co., supra [332 Mo. 766, 59 S.W.2d 625]; Tinker v. Kier, 195 Mo. 183, 94 S.W. 501; Burton v. Maupin, Mo.App., 281 S.W. 83; White Tower Management Corporation v. Taglino, 302 Mass. 453, 19 N.E.2d 700, 701, 121 A.L.R. 1158; Hays v. Meyers, 139 Ky. 440, 107 S.W. 287, 17, L.R.A., N.S. 284." Ash Grove Lime Portland Cement Co. v. White, 361 Mo. 1111, 238 S.W.2d 368, 372.
As to defendants Cook, there is no issue of bona fide purchaser. They do not claim to be such or challenge the ruling of the trial judge that they were not.
The parties agree that, after the divorce, Feeney and Miss James were tenants in common, each owning an undivided onehalf interest. We therefore approve the ruling below that Feeney is the owner of an undivided one-half interest as tenant in common with the Cooks, and that the interests of both Feeney and the Cooks are subject to the lien of the $3,918 mortgage.
We need not rule the other points made by defendants. They pose questions either as to the extent of the jurisdiction of the court in which the partition suit was filed over the real estate itself and the claims of the respective parties in that suit, or the power of the court out of which Miss James had the execution issued to approve or disapprove the sheriff's report of sale. These issues are no longer important. Neither the extent of the jurisdiction of the partition suit court which Miss James invoked in the one instance, nor the power of the other court which she abused in the other, constitute any justification or excuse for her fraudulent conduct.
The judgment is affirmed.
VAN OSDOL and COIL, CC., concur.
The foregoing opinion by LOZIER, C., is adopted as the opinion of the court.
All concur.