Opinion
No. 41526.
March 13, 1950.
APPEAL FROM THE CIRCUIT COURT OF WASHINGTON COUNTY, EDWARD T. EVERSOLE, J.
C. J. Pursey and James A. Riley, St. Louis, for appellants, Jules Crader and Clifford R. Crader.
Raymond S. Roberts, Farmington, for appellee.
Jake Goodman, a judgment creditor of Jules Crader, sued Jules Crader and Clifford R. Crader, son of said Jules, to set aside a deed vesting the title of the real estate therein described in said Clifford as being in fraud of creditors and to adjudge the title thereof to be in Jules and subject to the payment of his debts. The real estate is situate in Ste. Genevieve county, Missouri. The case was tried in Washington county upon a change of venue The judgment was in accord with plaintiff's prayer. We have jurisdiction of defendants' appeal. Herriman v. Creason, 352 Mo. 1176, 181 S.W.2d 502. The essential facts follow:
The defense was that the land and improvements thereon are the property of Clifford Crader, having been acquired for him by his father at his special instance and request and paid for out of moneys forwarded to his mother to keep for him.
Jules Crader was a dealer in used automobiles and plaintiff financed his operations under "floor-plan" mortgages.
When Frank Highley, a representative of Goodman, went to Jules Crader to make a year-end audit about December 5, 1946, he discovered that a number of automobiles on which Goodman held a mortgage were not in the possession of said mortgagor. Jules Crader informed Highley the automobiles had been sold "in St. Louis at public auction to pay off a debt to his daughter Leona." Subsequent investigation disclosed that in the month of May, 1946, Jules Crader began disposing of mortgaged automobiles without the consent or knowledge of the mortgagee.
Raymond S. Roberts testified that at the instance of Highley he, as attorney for Goodman, interviewed Jules Crader immediately after the discovery that automobiles subject to mortgage were missing; that Crader stated he had sold a number of automobiles on which Goodman had mortgages and paid part of the money to his daughter, and the other part, approximating $4,000, had gone into the real estate here involved; that Crader gave witness the deed to this real estate to take to his office to prepare a deed for his son Clifford to transmit the title to Goodman, Crader stating he would take it to St. Louis the following day and have his son execute it, as his son knew he, Jules Crader, had used this particular money to purchase the property.
On February 14, 1947, Goodman sued Jules Crader and on August 13, 1947, recovered a judgment for $9,702.99 of which $8,507.76 was principal and $1,195.23 interest and attorney's fees. A balance of $9,302.99 remains unpaid on said judgment.
It was admitted that Jules Crader was insolvent and had no property subject to an execution.
Cole Shannon testified that he sold the land to Jules Crader on October 19, 1946; that Jules Crader paid for the land; that he did not know Mrs. Jules Crader or Clifford Crader; that Jules informed witness Clifford had told Jules to buy the land for him but did not inform witness Clifford was going to repay Jules for it; that he, witness, thought he was selling it to Jules Crader, and that he did not know Clifford Crader was named grantee in the deed.
Jules Crader erected a house on the land, the construction work being completed in about three months after the purchase of the land; that is, the improvements were completed soon after the first of the year 1947.
Jules Crader purchased most of the materials for the house from the McClark Lumber Company. Alvin Wills, its manager, and Thomas B. Valle, its bookkeeper, testified to the effect that Jules Crader talked about the purchases to them; that they were charged to Jules Crader and paid for by Jules Crader, except approximately $314.85 involved in a lien suit; and that Jules Crader did not state the purchases were being made for his son, Clifford. Jules Crader also hired the carpenters and laborers and paid them for erecting the house.
Clifford Crader testified that he entered the Coast Guard service January 25, 1945, at the age of seventeen years, and was discharged April 22, 1948, after serving over three years; that, while in the service, he sent his mother "around $3,500" to keep for him. A letter dated April 22, 1946, stated he was "going to send $200 home and that should make me around $3,000 saved already." He testified the money he forwarded thereafter "wasn't too much, I don't guess"; that, while home on furloughs, he instructed his father to purchase this land and, later, to build a house on it for him.
He testified on cross-examination that he received $50 a month when he enlisted and $97 a month at the time of discharge in 1948; that between January 25, 1945, and April 22, 1946, he had saved $3,000, indicating it came out of his Coast Guard pay, the only specific exception in the record being: A soldier came aboard ship and wanted a place to play "acey deucy" and he, witness, "found a place and they played all night and he gave me one-third of what he made." His remittances were cash in envelopes and some postal and Western Union money orders. As we read the record, receipts for $300 in money orders were produced but the dates are not shown.
A sister of Clifford married Joseph Allen. They lived in New Jersey in 1945. They and Clifford testified to the effect that about December 1, 1945, Clifford gave his sister an envelope containing money to deliver to their mother; that his sister delivered the envelope to the mother about December 5, 1945, but the money was not counted until the mother counted it upon delivery and, according to Mrs. Allen and the mother, $800 was in the envelope.
Mrs. Lovey Crader, the mother, and Jules Crader corroborated their son and daughter with respect to the receipt of the moneys to keep for Clifford. Mrs. Crader stated $800 was used to purchase the land and the house cost approximately $3,300. On cross-examination she testified that Clifford would mail $10 or $20 in cash or money order in an envelope; that $50 was the largest amount she received except the $800; that she kept no record or account of the money received, just put it in an envelope in a trunk; that she gave Clifford $5 to $10 of this money at times when he asked for it while he was home on furlough; and that she gave the other money to Jules Crader to purchase the land and to pay the bills for constructing the house. She also testified she kept her daughter's money and Jules Crader's money, although he had a bank account.
Clifford Crader has been living in St. Louis since his discharge from the service. His father and mother have occupied the house since its completion but have paid no rent therefor.
Clifford Crader also testified he borrowed the money from Mr. Allen to discharge the lien against the property, and that he made application for electric service to the house; but he further testified that he attended to both of these matters after the instant suit was filed.
Jules Crader testified Clifford sent money home fifteen to twenty times; that Clifford told him to buy this land and, when he purchased it, he informed the Shannons he was buying it for Clifford and paying for it with Clifford's money; that Clifford instructed him to build a house on the land and he, witness, made the arrangements for the necessary materials and labor, informing the parties that it was his son's, Clifford's property; that all payments were made out of Clifford's money, which he secured from his wife.
Jules Crader denied that he gave Clifford's deed to attorney Roberts or that he told Roberts to prepare a deed transferring the title to Goodman, but testified that Roberts took the deed out of his hands and threatened to send him to the penitentiary; that he was doing business with Goodman up to December, 1946, and sold a number of cars on which they had a mortgage; that, as we read his testimony, he did not own Goodman; that he had a bank account but "carried more" money in his pocket; and that he had been convicted of embezzlement, of issuing bad checks, and selling mortgaged property.
Jules Crader negotiated the purchase of the land and the construction of the house thereon. The Shannons did not know Clifford Crader and were of the opinion they transferred the land to Jules Crader. The facts present a transfer of property brought about by a father from third persons to his son. Dealings between parent and child are subject to close scrutiny where the rights of creditors are involved. Moberly v. Watson, 340 Mo. 820, 102 S.W.2d 886, 889[4]; Weigel v. Wood, 355 Mo. 11, 194 S.W.2d 40, 42 [8]; Doerschuk v. Wiseman, Mo.App., 181 S.W.2d 789, 792[5]; Koenig v. Oswald, 8 Cir., 82 F.2d 85, 88; 37 C.J.S., Fraudulent Conveyances, p. 930, §§ 96, 251, 383.
Plaintiff's evidence warranted findings to the following effect: Jules Crader was unable to meet his obligations to plaintiff. He admitted being insolvent. He sold mortgaged automobiles without the consent or knowledge of plaintiff, the mortgagee, and concealed such sales from the mortgagee. Automobiles subject to mortgages in excess of $8,500 were wrongfully sold by Jules Crader between May and December 6, 1946. He failed to apply the proceeds of such sales in discharge of the secured indebtedness, including his conversion of the money to pay an indebtedness due his daughter and his conversion of the money to purchase the land in the name of his son and to construct the house thereon in fraud of the mortgagee. Under the evidence favorable to plaintiff the transfer of the land to the son and the construction of the house thereon were unsupported by a consideration from the son. The transfer left Jules Crader without property to apply on his indebtedness to plaintiff. Jules Crader and his wife went into and continued in possession of the property and paid no rent to the son. This was sufficient to place the burden of going forward with the evidence on defendants. We are not inclined to interfere if it taxed the credulity of the chancellor to believe that a seventeen or eighteen year old youth, away from home and receiving $50 monthly above his subsistence, remitted $3,000 in fifteen months to his mother to keep for him, even if aided by a soldier giving him a part of one night's winnings for providing a place aboard ship to play "acey deucy." No account or record appears to have been kept of these remittances by Clifford or their receipt by his mother. She did not deposit the money to her son's credit but kept the cash at her home. The father was of opinion Clifford sent money home fifteen to twenty times. The mother testified ordinarily he remitted $10 to $20. There was substantial evidence to sustain findings of fraud. See Robinson v. Heiser, 345 Mo. 247, 132 S.W.2d 1020, 1021; Castorina v. Herrmann, 340 Mo. 1026, 104 S.W.2d 297, 302; Ebert v. Myers, 320 Mo. 804, 9 S.W.2d 1066, 1069; Cape County Sav. Bank v. Wilson, 225 Mo.App. 14, 34 S.W.2d 981, 984; Biondo v. Biondo, Mo.Sup., 179 S.W.2d 734, 738; Koenig v. Oswald, supra; Doerschuk v. Wiseman, supra; Brown v. Oehler, Mo.App., 192 S.W.2d 515, 517; Toomay v. Graham, Mo.App., 151 S.W.2d 119, 124; 37 C.J.S., Fraudulent conveyances, p. 1209, §§ 382, 383, 388, 389.
The foregoing disposes of all issues presented. Accordingly, the judgment is affirmed.
WESTHUES and BARRETT, CC., concur.
The foregoing opinion by BOHLING, C., is adopted as the opinion of the court.
All concur.