Summary
In Stephenson v. Stephenson, 351 Mo. 8, 171 S.W.2d 565 (1943), a letter of the deceased, in which the plaintiff identified the handwriting of the deceased, was admitted in evidence.
Summary of this case from Bolin v. AndersOpinion
No. 38258.
May 4, 1943. Rehearing Denied, June 1, 1943.
1. TRUSTS: Letters and Deed Create Trust. A series of letters preceding the execution of a quitclaim deed are construed with the deed and show an express trust in favor of the grantor.
2. WITNESSES: Evidence: Disqualification as to Deceased Party: Not Applicable to Identifying Handwriting. The statutory disqualification of a witness when the other party is deceased does not apply to testifying as to the handwriting of the deceased.
3. EVIDENCE: Witnesses: Letter to Deceased Party Admissible. Plaintiff's letter to a deceased party, when identified by a witness not a party to the transaction, was admissible.
4. FRAUDULENT TRANSFERS: Scheme to Defraud Creditors not Shown. It does not appear that the deed in controversy was executed for the purpose of defrauding the creditors of the grantor.
5. EQUITY: Trusts: Laches not Established. A delay of 12 years in bringing an action to establish an express trust in a quitclaim deed did not constitute laches, a family relationship being a factor in excusing the delay and there being no change in status which would work to the disadvantage of the other parties.
6. EQUITY: Offer to do Equity not Essential: Court May Fix Terms. The failure of plaintiff's petition to contain an offer to do equity does not bar her from relief. She asks for an accounting and could not complain if this resulted in a balance being found against her. And the court may fix terms as the price of the decree.
7. PLEADING: Trusts: Appeal and Error: Insufficiency of Petition: Objection too Late When Raised on Appeal for First Time. While the petition should have alleged how the trust arose, the objection to its sufficiency comes too late when raised for the first time on appeal.
Appeal from Adair Circuit Court. — Hon. Noah W. Simpson, Judge.
AFFIRMED.
M.D. Campbell, A.D. Campbell and George J. England for appellants.
(1) The petition charges plaintiff was the owner of the land described in the petition; that she executed a quitclaim deed on October 10, 1928, which purported to convey said land to Anna L. Stephenson, "but this plaintiff (2) says that said land was by said deed only conveyed to Anna L. Stephenson to hold title thereto as trustee for the use and benefit of this plaintiff." The allegation just quoted and the allegations that the deed "only conveyed" to Anna L. Stephenson "title thereto as trustee for the use and benefit of this plaintiff" are statements of legal conclusions, not the statements of issuable facts, and amount to nothing in pleading. State ex rel. v. Sevier, 92 S.W.2d 102; Ruggles v. International, 52 S.W.2d 860; Tucker v. Diociose, 264 S.W. 892, 902. (2) The trust upon which the petition evidently proceeds is an express trust, a trust which can be created only by written contract. Woodard v. Cohron, 137 S.W.2d 497, 498. There is not a word in the petition concerning a contract, either oral or written, between the parties to the quitclaim deed absent which there was no express trust. The petition was therefore insufficient to support the decree. (3) The court erred in overruling appellant's objection to the competency of plaintiff as a witness to testify that her Exhibit 1 was written by Anna L. Stephenson, and that her Exhibit 1-A was written and signed by Anna L. Stephenson, for the reason Anna L. Stephenson was dead and this witness, the other party to the transaction, was therefore incompetent. Anna L. Stephenson, if living, could have testified she did not write either of said exhibits, and Mabel K. Stephenson was therefore incompetent. Fullerton v. Fullerton et al., 132 S.W.2d 966, 969, and cases cited therein. (4) The court erred in receiving said Exhibits 1 and 1-A in evidence for the reason there was no competent evidence that Anna L. Stephenson wrote either of them. Exhibit 1 was an envelope in which plaintiff was over defendant's objection allowed to say Exhibit 1-A was enclosed. The latter exhibit was one of two writings upon which plaintiff relied to prove the existence of the trust. Mabel I. Stephenson was the other party to the transaction and incompetent to testify that Anna L. Stephenson wrote and signed them. Authorities under Point (3). (5) Plaintiff cannot have the aid of equity for the reason that her hands are not clean, she has not offered to do equity. Ogden v. Auer, 184 S.W. 72; Jones v. Jefferson, 66 S.W.2d 555; Smith v. Holdoway Construction Company, 129 S.W.2d 894. (6) Equity will not aid the plaintiff for the reason that she had been guilty of inequitable conduct, both in the institution and prosecution of this action. The record will show that throughout the trial the attorney representing plaintiff, and the attorney representing the cross petitioners, aided each other; that the attorney for the cross petitioner claimed the right to cross examine the witnesses called by the plaintiff and frequently made suggestions in aid of plaintiff. Such conduct was not only inequitable — it was against public policy, and even though no objection had been made to it, this court of its own motion would raise the question of public policy. Creamer v. Bivert, 113 S.W. 1118. (7) The court erred in permitting plaintiff to testify she wrote a letter to Anna L. Stephenson of which her Exhibit 3 was a copy. The letter said in effect she accepted the proposition made in her Exhibits 1-A and 2-A, and enclosed the executed deed. Said Exhibit 3 was a part of the transaction between plaintiff and Anna L. Stephenson, and plaintiff was therefore incompetent to testify to such act. Authorities under Point (3). Moreover there was no evidence the original was lost. Authorities, Point (3). (8) Plaintiff and Anna L. Stephenson knew the truth of the matter. The former remained silent until long after death had stilled the voice of the latter. While mere delay short of the period of limitation does not in and of itself defeat an action, the rule is well established that when the delay renders it difficult or impossible to ascertain the truth, equity will not grant relief. Snow v. Finch, 41 S.W.2d 2; Price v. Boyle, 287 S.W. 257; Davis v. Keiser, 246 S.W. 897. (9) Equity views with disfavor an action brought against the representatives of a deceased person, Lenox v. Harrison, 80 Mo. 491. (10) The failure of plaintiff to exercise any diligence in asserting her alleged right is sufficient to deprive her of aid in equity. Bennett v. Terry, 299 S.W. 147, 149, and cases there cited. (11) No lawful trust agreement was shown. Plaintiff's Exhibit 3 accepted the proposition for the purpose of "protecting" as outlined in the letters Exhibits 1-A and 2-A. These letters undoubtedly show the deed was made for the purpose of withdrawing the property of plaintiff from the reach of her creditors — so "that bunch" could not do anything about it. In such circumstances equity will leave the parties to the transaction where they placed themselves. McGehee v. Garringer, 224 S.W. 828; Keener v. Williams, 271 S.W. 489; Kimbridge v. Farrell, 136 S.W.2d 335; Friedel v. Briley, 44 S.W.2d 9; Rock Island Natl. Bank v. Lumber Co., 134 Mo. 432; State Bank v. Lillibridge, 293 S.W. 116; First Natl. Bank v. Wally, 193 S.W. 614; Creamer v. Bivert, 113 S.W. 1118; Ogden v. Auer, 184 S.W. 72. (12) The claim of plaintiff is stale — is barred by laches. Snow v. Finch, 41 S.W.2d 2; Price v. Boyle, 287 Mo. 257.
Russell D. Roberts and E.M. Jayne for respondent.
(1) Appellant, Citizens National Bank, has no standing whatever in this action as an appellant. By its answer it disclaimed any lien or any interest in the land in controversy. The respondent was entitled to judgment in so far as Citizens National Bank was concerned upon the pleadings. McDaniel v. Leuer, 230 S.W. 633. The Citizens National Bank could not in any way be injured by the judgment since all the judgment determined in so far as it is concerned, is what it by its answer claimed that it does not own or claim to own the notes secured by the deed of trust on the property or any other lien. Its appeal is wholly without merit. Gilchrist v. Bryant, 213 Mo. 442; State ex rel. v. Vories, 62 S.W.2d 457; Secs. 1184, 1684, R.S. 1939. (2) The appeal of David I. Stephenson is without merit and he has no standing as an appellant from the decree of the court. It is true that by his answer he claimed title and some of his testimony intimated that he claimed title, but it was directly shown by him that he had conveyed such title as he had to his wife. In addition to that he gave oral testimony to support the contention that the deed of trust given by his wife constituted a valid and subsisting lien. This could only be true if his wife owned the land when she executed the same. His appeal is entirely without merit. Authorities, supra. (3) Appellant, Ella A. Stephenson, cannot, with good grace, complain about the decree against her. She did not see fit to take the stand to testify, and when this is considered with absence of other vital evidence which she should have made available, for instance the very deed by which Anna L. Stephenson conveyed the property, it is significant. She most certainly knew whether she had knowledge of the trust relationship under which Anna L. Stephenson had acquired the property. These facts, coupled with the fact that the conveyance to her was a voluntary one and was one in the family made it encumbant on her to affirmatively show that the transaction was a bona fide purchase and, on her failure to so show, the chancellor was justified in indulging every reasonable inference against her. Reynolds v. Faust, 179 Mo. l.c. 27. (4) This court will defer to the finding of the chancellor, since he had the witnesses before him. Woodruff v. Cole, 269 S.W. 599. This is especially true where the chancellor had evidence before him in the form of exhibits which are not brought to this court and which by their very nature could have given support to respondent's case. Fears v. Newman Merc. Co., 156 S.W.2d 909. (5) Appellants' belated challenge of plaintiff's petition is without merit for the following reasons: (a) This being a suit to ascertain and determine title under the statute (Sec. 1684, R.S. 1939), the petition is sufficient as it complies with that statute. Huff v. Land Improvement Co., 157 Mo. 65. (b) Appellants and the other defendants answered the petition without challenge, and claimed title in themselves, thus raising an issue on which the court was required to render a decree regardless of the technical sufficiency of the petition. (c) The statute contemplates that where a petition is filed by one claiming an interest, that the court "ascertain and determine" the estate title and interest of said parties. Sec. 1684, R.S. 1939. (6) The court did not err in permitting respondent to identify exhibits and the handwriting on the same. Sec. 1887, R.S. 1939. Even if respondent was incompetent to testify on this point, the error was not fatal since it was only cumulative. Singer Mfg. Co. v. Givens, 35 Mo. App. 602; Ice and Cold Storage Co. v. Kuhlmann, 238 Mo. 685; Burger v. Boardman, 254 Mo. 237; Cases cited West Mo. Digest, Vol. 3 — Appeal and Error, Key 1051 (1). (7) If the action had been against Anna L. Stephenson she could have been made to reconvey the property and account for the proceeds and other income. If she had allowed the trust property to become mixed with her own property it would all have become trust property (both at law and in equity). Tufts v. Latshaw, 172 Mo. 359; Mann v. Bank, 46 S.W.2d 874. (8) The property being trust property, the trust follows the estate into the hands of all save those who purchase in good faith, for a valuable consideration, and without notice. Regardless of the question of good faith and regardless of the question of notice, appellant, Ella A. Stephenson, under the evidence, did not pay a valuable consideration for the property and consequently the trust property having been delivered into her hands just so far will equity follow the trust, retake the trust estate and restore it to its rightful owner. Witte v. Storm, 236 Mo. 470. (9) Appellant, Ella A. Stephenson, under the facts in this case, is in no better position than is appellant, D.I. Stephenson. He admittedly was acting as agent for his mother at the time of the transfer between them and the burden was on him to show that he purchased in good faith and for a valuable consideration. Evans v. Evans, 196 Mo. 1. (10) His contention that he paid a one dollar bill for property worth between thirty and thirty-five thousand dollars, with only $6,396.62 encumbrance against it and with an annual income of three thousand dollars, is an admission that the one dollar payment was not an actual consideration. Oldham v. Wright, 337 Mo. 170. (11) Estoppel or laches is not available to appellants for several reasons. The relative position of the parties was not altered and appellants were not injured. Hudson v. Kahoon, 193 Mo. 562; Cantwell v. Crawley, 188 Mo. 57; Newman v. Newman, 152 Mo. 414. (12) The appellants were actually benefited by the delay in that they collected income of three thousand dollars per year for five years, and their grantor, Anna L. Stephenson, collected income of $3,600 per year for 5 years and $3,000 per year for over 3 years. Davies v. Keiser, 297 Mo. 15. (13) Appellant's complaint concerning the relationship in this case of respondent and the nonappealing defendants, her children, and the fact that one of the attorneys filing the petition for plaintiff appeared at the trial for her children is an effort to beg the question and becloud the issues. The action under Sec. 1684, R.S. Mo. 1939, is a special one designed to allow and compel all persons having or claiming to have an interest in the land to bring them into one case for a hearing, determination and adjudication. There is no requirement whatever as to what the nature or character of the claim must be, or that the parties be antagonistic.
This is an action to establish a trust, for an accounting, and to quiet title to property known as the Stephenson Hotel Building in Kirksville.
Plaintiff, the widow of Bret Stephenson, together with her husband owned and operated the Stephenson Hotel. In 1921 her husband died and some time later she sold the business and fixtures to another who rented and operated the hotel. She was living in California when she received letters from her mother-in-law, Anna Stephenson, as follows: "Kirksville, Mo. Oct. 5, 1928. My Dearest Mabel: I am sending you a Quit Claim deed to sign and return to me. Pecks are going to sue you for a debt of about ninty some dollars. John Mills has stood them off about as long as he can by telling them you were away on a visit. I saw three letters from them one of them said women were very fickle you might never come back or be gone fifteen years and to go ahead with the suit if they do it will start something all your creditors would jump in, it was kind of Mills to let me know about it this way they cannot do anything and we will have [567] time to see what P____ client will do. if he means business he will have to get busy I will get all I can for you and do everything possible for you this is the right procedure we are tak eing the business is complicated when the fellow comes across with our price and everything is safe we can do business now trust me Mable you would have to trust someone and I know you would rather trust me now I am going to help you and get all I can for you know I can do it and I will. God in me is `mighty' just do as I tell you and pray that God blessings will be upon all we do I feel so sure that it is com eing out fine for you I have prayed for divine guidance and he has told me what to do not in words but in conviction it is wonderful I get such wonderful thoughts It almost awes me. Do right and trust God and he will direct you. Keep this letter you may need it if anything should happen. Mother S. remember I am responsible.
"Mable John Mills found out who P____ client is `Wright' but I don't know whether he will accept our offer or not just as soon as I get this deed back I will advertise it and see what I am offered a friend of mine told me he would let me have some money if I wanted to buy it but we will e xaust every means to get all we can for it but I will take care of it for you and get you a nice little bunch of money but we must get it so no one can bring anything more against it and when you sign this Quit Claim deed they will all wait until we are ready if I buy it Mr. Brewington is going to help but I will keep you posted in every way now don't worry when this paper is signed no one can jump in and bring any thing against it if I can get chance (over) to sell my farm will turn it in on it if I buy the Hotel no one will be in with me Mr. Brewington will be secured another way. I just feel like everything is going to work out for you better than you had hoped for now don't be afraid to trust me I am responsible you could make me do the right thing but you will never have to do that for I am only trying to help my Darling Bret's Wife and darling children who are so dear to me you must be bright and hopeful and pray that everything will work out as we wish. God bless you my Darling daughter Do right and trust God and he will bless you. I will keep you informed of any change in any way Affect Mother Stephenson."
"Kirksville, Missouri, October — My dearest Mable; I forgot to tell you in my letter to be sure and sign that deed before a notary public and a witness wit ness to make it l eagle. Just as soon as you send it to me I will do as you said, advertise it and see what is the highest amount we can possibly get for it and if that is not enough I will buy it from you.
"Brewington says I am doing all right, he advises me in every move I make and he is watching all who are concerned in it. He is a good business man and has promised to see me through and I trust him.
"I put my home in another agents hands today, I hope I can get out to . . . P____ was passing my house today I was sitting on the porch I called him in and asked him what his client was doing. He said he had not seen him today. I said, `How much time does he expect to have to study over this deal, this offer does not last indefinitely', if his client is waiting for something to start he and P____ will be surprised at it for just as soon as I get that Deed from you so you will be protected against that element I will advertise and see just what I can get and if there is nothing better I will buy it so just rest on your oars but get the Trust Deed back signed before a Notary Public then we will have creditors and that bunch where they can't do anything but the right thing.
"Do right and trust God, pray and hold the thought that everything will come out for the best which I think it will, Mother Kiss for Marge, Kiss for Susanna, Kiss for all of you."
In response to these letters plaintiff conveyed the property to Anna Stephenson by quitclaim deed dated October 10, 1928. Thereafter the latter managed the property, collected the rents, paid the charges against the property, renewed and reduced the loans against the property. Then Anna Stephenson became ill and on February 8, 1937 for a nominal consideration transferred the property to her son, David Stephenson. The latter transferred the property to his wife Ella on February 28, 1938 also for a nominal consideration. Anna Stephenson died in April, 1938. Plaintiff instituted this suit in October, 1940 claiming that her conveyance to Anna Stephenson was in trust. She asked that the whole title be vested in her and for an accounting.
[568] The trial chancellor found plaintiff to be the owner of the property and vested full title in her subject to a deed of trust securing a loan against the property. He decreed that the conveyance by plaintiff to Anna Stephenson was in trust; that the transfers to David and Ella Stephenson were without consideration; and that an accounting need not be had. Thereupon an appeal was taken to this court. David and Ella Stephenson and plaintiff are the active parties in this appeal; the other parties apparently are no longer interested in the case and need not be dealt with.
The letters and the deed taken together create an express trust in the land conveyed. No particular words are required to create an express trust. Not even the words trust or trustee need be used. Nor is it necessary that the declaration of such a trust be contained in the instrument which transfers the legal title. The trust may be set out in one or several instruments executed at other times than that of the transfer of title, provided they show the existence of the trust when construed together. In re Soulard's Estate, 141 Mo. 642, 43 S.W. 617; Tootle-Lacy National Bank v. Rollier, 341 Mo. 1029, 111 S.W.2d 12; Ketcham v. Miller (Mo.), 37 S.W.2d 635. For a case on similar facts see Hall v. Farmers' Merchants' Bank, 145 Mo. 418, 46 S.W. 1000. One of the letters, however, refers to the quitclaim deed as a "Trust Deed."
Plaintiff testified the handwriting of the letters was that of Anna Stephenson. Although the latter is dead, plaintiff is not disqualified by Sec. 1887, R.S. 1939 from giving such testimony about the handwriting. That statute seals the lips of a party to a transaction when the other party is dead. Merely identifying handwriting is not testifying about the transaction itself. Our courts have previously ruled that a witness who is disqualified because of the death of the opposite party to the transaction may nevertheless testify as to the handwriting of the deceased. Banking House v. Rood, 132 Mo. 256, 33 S.W. 816 (overruled on other grounds); Bates v. Forcht, 89 Mo. 121, 1 S.W. 120; B.F. Goodrich Rubber Co. v. Bennett, 222 Mo. App. 510, 281 S.W. 75; Conley v. Johnson, 204 Mo. App. 185, 222 S.W. 891.
Plaintiff's letter transmitting the deed to deceased in which she stated she was sending the deed in consideration of the promises in deceased's letters was identified by a witness not a party to the transaction and was competent as evidence of the transaction. The statute deals with the competency of the witness, and not with the admissibility of evidence. See Munger v. Myers, 96 Kan. 743, 153 P. 497; Harper v. Wilson, 46 F.2d 785.
Appellants say the letters disclose a scheme to defraud creditors which plaintiff fell in with and transferred the property for that purpose. Accordingly, appellants conclude, plaintiff does not come into equity with clean hands so is not entitled to equitable relief but should be left in the situation in which she placed herself, under the rule most recently announced in Leeper v. Kurth, 349 Mo. 939, 163 S.W.2d 1031. This argument has no basis of fact. There is no charge nor is there any showing that the creditors were defrauded. On the contrary, the evidence indicates that they were paid as Anna Stephenson collected the income from the property. As a matter of fact appellants state in their answer that all plaintiff's indebtedness was paid, the inference being that such payments were made from the income collected from the property.
We do not find plaintiff guilty of laches because of her delay in bringing the suit. While the doctrine of laches is applicable alike to cestuis under implied and express trusts, courts are more reluctant to apply it in the latter case than in the former. Bogert, Trusts, sec. 948. A family relationship between the cestui and the trustee, as we have here, has been held to be a factor in excusing delay. Laughlin v. Laughlin, 291 Mo. 472, 237 S.W. 1024. Ordinarily, delay alone is not sufficient to sustain the charge of laches. Laches, in legal significance, is not mere delay, but delay that works to the disadvantage of another because of some change in the status of the property or of the parties. Rollestone v. National Bank of Commerce, 299 Mo. 57, 252 S.W. 394. Appellants show no injury arising from the delay in bringing this suit. This is not a case where the delay renders it difficult or impossible for the court to ascertain the truth of the matters in controversy as was the situation in Snow v. Funck (Mo.), 41 S.W.2d 2.
Appellants complain because plaintiff's petition does not contain an offer [569] to do equity to the estate of Anna Stephenson or her legal representatives. Such complaint is not tenable for the reason neither the estate nor the legal representatives are parties to this suit. Nor do appellants show how such an offer would affect them. Plaintiff does ask for an accounting with David Stephenson who was the grantee of Anna Stephenson and with Ella Stephenson, the present record holder of the land. This may be construed as an acknowledgment of their right to reimbursement if the account should be found in their favor because plaintiff would not be permitted to complain, after she has asked for an accounting, if the accounting results in a balance against her. Smith v. Holdoway Construction Co., 344 Mo. 862, 129 S.W.2d 894. Moreover, this court has held that pleading an offer to do equity is not a necessary condition to its enforcement. Certainly no court of equity would grant equitable relief to a party who, on his own part, refused to perform equitably. The enforcement of the principle of equity — he who seeks equity must do equity — is not dependent upon any form of pleading, but its application is in the conditions and provisions of the decree of the court whereby equitable terms are imposed as a condition precedent to the equitable relief granted. "It is always within the power of a court of equity, where its decree is invoked, to require as `the price of its decree' that the person invoking it shall submit to equitable terms, and accordingly a chancellor always inquires concerning the equities which the plaintiff must do, in order that he may be entitled to the relief which he seeks." Jones v. McGonigle, 327 Mo. 457, 37 S.W.2d 892.
Appellants now attack the petition for the first time on the ground it fails to state a cause of action because it avers merely that Anna Stephenson held title as trustee and does not allege how the trust arose. The general rule found in 65 C.J., Trusts, Sec. 970, states: "In a suit to charge property conveyed by an absolute conveyance with a trust, it is not sufficient to allege merely that the conveyance was in fact in trust; but it must appear from the allegations that the conveyance was in trust expressly, or by implication, . . ." Although the averment as to the trust is not sufficient, still the petition states a cause of action. Therefore an objection to the sufficiency of the petition raised for the first time on appeal comes too late. The rule is well settled that when a petition which pleads a cause of action, although defectively, is not assailed in the trial court it is too late to challenge the sufficiency for the first time on appeal. This rule was applied in Reed v. Tedford (Mo. App.), 72 S.W. 207 where the petition, seeking to determine interests under a will, pleaded merely the legal effect of the will. An objection to the petition raised for the first time on appeal was overruled. The case of State ex rel. Smith v. Sevier (Mo.), 92 S.W.2d 102, relied on by appellants, is not in point. It was not an appeal but was an original proceeding in this court in which the petition was immediately attacked by demurrer.
In view of our finding a trust had been created it becomes unnecessary to consider other points raised by appellants.
The judgment is for the proper party. It is affirmed. All concur.