MAUDE F. GAUGH v. GEORGE M. GAUGH (Impleaded with WALTER W. GAUGH ET AL.), Appellant, and KARALEE RANKIN
11 S.W. (2d) 729
Court en Banc
November 24, 1928
For the errors noted the cause is reversed and remanded.
PER CURIAM:—This cause coming into Court en Banc from Division One, the foregoing divisional opinion of ELLISON, C., is adopted as the decision of the court. All of the judges concur.
LINDSAY, C.—The respondent, Maude Gaugh, is the widow of George G. Gaugh, deceased, who died intestate, leaving as his only heirs the other named parties, Walter W. Gaugh and George M. Gaugh, his sons, and Karalee Rankin, a daughter.
The decree herein appealed from by George M. Gaugh adjudged that he held title to a certain farm in Jackson County in trust for his father, George G. Gaugh, in the latter‘s lifetime, and thereafter in trust for the widow and heirs of his father, and that decree also cancelled a conveyance made by Maude Gaugh to George M. Gaugh of all her interest in the estate of the deceased.
George G. Gaugh was a judge of the County Court of Jackson County in the years 1919 and 1920, and throughout the testimony is generally referred to as Judge Gaugh; George M. Gaugh is general
Prior to his election as county judge in 1918, for thirty years or more, Judge Gaugh operated a printing and binding establishment in Kansas City. His two sons, Walter and Mort Gaugh, assisted their father in the business from the time they were boys, but appear not to have drawn salaries. Walter Gaugh was forty-five years old at the time of the trial, and Mort Gaugh was forty-one years old. Karalee Rankin, the daughter, was younger; was married ten or more years prior to the trial, and lived in New York City with her husband, Earl Rankin.
Maude Gaugh was the second wife of Judge Gaugh. Their marriage occurred about 1900. The three defendants in the suit were children of a former wife of Judge Gaugh, who had divorced him, but who was living at the time of the trial, her name then being Carrie M. Knox.
The printing and binding business referred to was carried on at 408-410 Admiral Boulevard, Kansas City. From June, 1917, the title to the undivided one-half interest in the real estate known as 408-410 Admiral Boulevard was in the Queen City Building & Investment Company, a corporation, which also, after the date mentioned, held title to the adjoining property, 404-406 Admiral Boulevard. One Henry A. Fratcher owned an undivided one-half interest in the property at 408-410 Admiral Boulevard. After January 1, 1919, the printing and binding business was done by Walter Gaugh and Mort Gaugh under the name of Union Printing & Binding Company, which was not a corporation. It had formerly been George G. Gaugh Printing & Binding Company.
Judge Gaugh died on September 12, 1922. On October 9, 1922, Maude Gaugh brought this suit, joining the three heirs as defendants, and alleging that Judge Gaugh died being the equitable owner of certain tracts of land bought with his own money, though title to certain of the lands was in the name of Mort Gaugh, and certain other in the Queen City Building & Investment Company. Demurrers were filed and sustained by the court, and plaintiff, on November 24, 1922, filed her amended bill, omitting the Queen City Company as a party, and omitting the real estate, the title to which was alleged in the original bill to be in the Queen City corporation. The first amended bill thus covered property only which was alleged to stand in the name of Mort Gaugh—the Courtney farm, and certain property in Ashburn‘s Addition in Kansas City, and referred to by the witnesses as the Ninth Street property.
Maude Gaugh qualified as administratrix, and as such, on October 16, 1922, brought another suit joining the three heirs as defendants,
On December 28, 1922, Maude Gaugh filed her election as widow, electing to take a share in the estate equal to that of a child of the deceased, and also on that day, pursuant to an agreement made with Mort Gaugh, and for a consideration of $12,900 paid to her by him, conveyed and assigned to Mort Gaugh all of her interest and claims to the estate of the deceased. About that time also she resigned as administratrix, and Mort Gaugh was appointed administrator in her stead, and both suits languished for a time. Prior to this transaction, Maude Gaugh had taken the depositions of Walter Gaugh and Mort Gaugh and of some other persons. In this, the land suit, Walter and Mort Gaugh had answered, denying that their father was the owner of the lands sought to be subjected to a trust—the Ninth Street Property, in Kansas City, and the Courtney farm—and Mort Gaugh answered, claiming to be sole owner of said properties.
In April, 1923, Karalee Rankin also took the depositions of Walter Gaugh and Mort Gaugh, and of certain other persons concerning transactions preceding the death of Judge Gaugh, and immediately following his death, and concerning also the claims of Walter Gaugh and Mort Gaugh to the shares of stock in the Queen City Company, and to the printing and binding business, and other property. On June 25, 1923, Karalee Rankin filed, in this suit, her answer and cross-bill, in which she alleged that Walter Gaugh and Mort Gaugh and the Queen City Company were not the owners of the real properties, but merely held the title thereto for convenience and in trust for her father, Judge Gaugh, and asserted her claim to an interest in said properties as an heir of the deceased. Walter Gaugh and Mort Gaugh answered to the cross-bill, the latter claiming to own the real estate. Karalee Rankin also filed answer and cross-bill in the administrator‘s suit for personal property, alleging that Walter Gaugh and Mort Gaugh were in pos
The defendants Walter and Mort Gaugh filed their answer to the amended answer and cross-bill of Karalee Rankin. They averred that in May, 1917, Walter Gaugh was the absolute owner of an undivided one-half interest in Lot One in McTernan‘s Resurvey, an addition to Kansas City, and that Mort Gaugh was the absolute owner in fee simple of Lot Two and the east 20 feet of Lot Three, in said Resurvey. These properties are the properties above mentioned and otherwise described as 404, 406, and 408, 410 Admiral Boulevard. They further averred that Mort Gaugh was the owner of certain real estate in Sharon Place, an addition to Kansas City; that in May, 1917, their father, Judge Gaugh was the owner of the charter and of the capital stock of the Queen City Building & Investment Company, which, in fact, had no assets; that it was agreed between the defendants and their father that if they would convey the property last above mentioned to the Queen City Company, the defendants should be the absolute owners of all the capital stock of said company, and that if any shares of stock were held thereafter in the name of their father, he would hold the same in trust for them; that pursuant to the agreement that they would convey said real estate to the Queen City Company, their father agreed, in consideration of said conveyance, to assign and deliver and cause to be issued to the defendants all of the capital stock of the Queen City Company, except one share which the defendants agreed might be issued and held in the name of their sister Karalee Rankin; that defendants requested their father to remain as president of said Queen City Company during his lifetime; and, to qualify him for that, desired he should retain shares of stock. Their averment and contention was that under this agreement with their father, out of the eighty shares of stock of the Queen City Company, one share was issued and delivered to each of the sons, and one share to Karalee Rankin; that the certificate for the remaining seventy-seven shares was issued to, and stood on the books in the name of, their father; that about June 11, 1917, pursuant to the agreement, and upon conveyance of said real estate to the Queen City Company, the certificate for seventy-seven shares, standing in the name of their father, was cancelled, and two certificates, each for thirty-eight and one-half shares were issued to their father; that their
The two cases were taken up for trial in June, 1923, being mainly prosecuted by Karalee Rankin, and heard together, and a great volume of testimony was taken, and both cases were taken under advisement by the court. Nothing further was done until October 9, 1924, when Maude Gaugh filed in this suit her second amended bill, in which after substantially repeating her former allegations, she alleged that her conveyance to Mort Gaugh, made on December 28, 1922, was obtained by fraud, and asked its cancellation. This was asked upon the claim that the defendants had falsely stated to her that they, and not their father, were the owners of this personal property, including the shares of stock in the Queen City Investment
Defendants answered. Defendant, Mort Gaugh, filed his separate amended answer to the amended petition of Maude Gaugh, and to the cross-bill of Karalee Rankin, denying the allegations of fraud, and averring that plaintiff Maude Gaugh, had full knowledge of the facts at the time she made the conveyance.
Meantime, Mort Gaugh was removed as administrator, and Thomas J. Seehorn, as public administrator, had been ordered to take charge of the estate of the deceased; and, on September 30, 1924, as such, filed the administrator‘s second amended petition. In that petition there was set up ownership by Judge Gaugh of the printing business and equipment, the shares of stock in the Queen City Building & Investment Company, and ownership also of other properties; and it was charged that the defendants had procured false and forged assignments of the certificates of stock in the Queen City Building & Investment Company, and had wrongfully taken possession of them, and of large amounts of liberty bonds and other securities belonging to the deceased, and it was asked that the defendants be required to account for the same, and to hold the same in trust for the estate.
After the filing of the last amended bill by Maude Gaugh in the land suit, the court heard additional evidence and especially evidence concerning the transaction between Maude Gaugh and Mort Gaugh resulting in the conveyance made by her to Mort Gaugh on December 28, 1922. Both cases were then held under advisement until February, 1925, when the court rendered judgment in each—in this cause, the land suit, adjudging that Judge Gaugh at the
In the other case of Seehorn, Administrator, the court found for the administrator as to the ownership of the shares of stock in the Queen City Company, but found for defendants Walter Gaugh and Mort Gaugh as to the chattel property and business carried on under the name of the Union Printing & Binding Company. The two cases, although separate decrees were rendered, were heard together. The testimony is presented here in a single bill of exceptions; and upon appeal they were heard and submitted together. Throughout the nine hundred pages of oral and documentary evidence, the transactions bearing upon the issues in each of the two cases are so related, and so mingled that neither can be intelligently presented without constant reference to the issues and the testimony in the other. As we view it, the finding and decree in this case carry conclusions decisive of all important issues in the administrator‘s case. For that reason, the issues, the evidence and the conclusions are stated herein.
In this suit, the ultimate purpose of the plaintiff, Maude Gaugh, was to cancel the conveyance by her to Mort Gaugh, of her interest in the whole estate under her election to take a child‘s part, and as a means to that end, and reason therefor, to establish a trust in certain real estate—the Courtney farm, and the property in Ashburn‘s Addition, referred to as the Ninth Street property—the legal title to which was in Mort Gaugh; and also to establish ownership of her husband of the personal property referred to, followed by the allegation that Walter Gaugh and Mort Gaugh had concealed the facts; and the latter, by false representations made to her concerning the property, had induced her to convey to him her claims upon the estate. The cross-bills of Karalee Rankin sought the same end, except as to annullment of the transfer from Maude Gaugh to Mort Gaugh, a transaction in which she was not legally concerned.
The evidence as to the ownership of the real estate dealt with a great number of transactions covering many years, but concentrating upon the question of ownership of the Courtney farm and the Ninth Street property; and also upon ownership of the real estate conveyed to the Queen City Company.
Mort Gaugh took title to the Ninth Street property on June 28, 1922, by conveyance from one Elmer Grant Ege. He took this property in exchange for a farm held by him, referred to as the Lone Jack farm, and there was paid to Ege the sum of $10,000 as the difference in price of the two properties. This $10,000 paid to Ege was borrowed from the Pioneer Trust Company, upon a note of the Queen City Company, executed for that company by Judge Gaugh as its president
We notice the evidence concerning the acquisition of the Courtney farm. The testimony shows that Mort Gaugh contracted for the purchase of the Courtney farm from one Charles A. Brunn, on April 30, 1919, under a contract in writing of that date, and that the purchase price was $21,000, of which $1000 was paid at the signing of the contract; $6000 was to be paid on delivery of the deed; $7000 was to be paid in one year and the further sum of $7000 on or before two years, for which notes were given secured by a deed of trust. The deed from Brunn to Mort Gaugh was made May 7, 1919. Mort Gaugh called as a witness by respondents early in the trial, testified concerning this transaction, and said that he bought the farm for himself; that he negotiated its purchase with J. G. Murphy, who was the agent of Brunn. Murphy, afterward called as a witness, testified that as the agent of the owner he dealt with Mort Gaugh in the purchase of the farm, and that Judge Gaugh had no part in the negotiations or purchase; that he had nothing to do with Judge Gaugh in that regard. Brunn also testified. He identified the cancelled check for $1000 given as the first payment. He said that Judge Gaugh had nothing to do with the transaction of buying the farm, and that he never met Judge Gaugh until later, some time in the fall following the sale of the farm. In the examination of Mort Gaugh there were introduced in evidence the original cancelled checks given by him in payment of the Courtney farm. The first of these for $1000 was a check drawn by Mort Gaugh upon the account of the Union Printing & Binding Company. The check for $6000 on the same bank was a check of the Union Printing & Binding Company, by Mort Gaugh. The cancelled note for the first deferred payment for $7000 was also introduced in evidence. This note had been held by and was paid to the Mercantile Trust Company of Kansas City. The cancelled check for the final deferred payment of $7116.67, principal and interest, was the personal check of Mort Gaugh on the Missouri Savings Association. He testified that he leased the farm to tenants, and managed it, and planned and paid for extensive improvements made upon the farm. He introduced in evidence a great number of cancelled checks which he testified were given in payment of expen
Chas. W. Scoffield testified that he owned a tract of land adjoining the Courtney farm; that upon one occasion he went to the house on the farm for the purpose of getting permission for a drive-way off the farm, where it cornered upon his own land; that he found Judge Gaugh and Mort Gaugh there together, and spoke to Judge Gaugh, asking what the chance would be to get the drive-way off of his land; that Judge Gaugh replied: “The farm belongs to Mort, my son. You can see him. I do not presume you will have any difficulty in getting a drive-way.” He said that before he “spoke to Mort or asked any questions, Mort spoke up and said: ‘Yes, go ahead and fix your drive-way there.‘” The witness said that on another occasion he spoke about certain hogs on the place that he wished to buy, and Judge Gaugh told him to go with his son, and “look the hogs over; they belong to him.” He testified to another occasion when there was some discussion between Mort Gaugh and himself as to his renting the Courtney farm; that later, he went to the office on Admiral Boulevard, and Mort was not in the office at the time, but that Walter Gaugh and Judge Gaugh were in the office; that when he said he came “to talk about renting the farm,” Judge Gaugh answered: “You will have to see my son Mort; the place belongs to him,” and that later Mort Gaugh came, and he went ahead and rented the farm that day. There was also introduced a bill of sale from one Holmes of his interest in certain live stock and implements to Mort Gaugh for the consideration of $2,250. It appears that Mort Gaugh in the purchase of this farm obtained a title guaranty. This document with an envelope, the envelope in which it was contained, was introduced in evidence. This envelope bore indorsed upon it memorandum in the handwriting of Judge Gaugh, the words, “Property of Geo. M. Gaugh.” Mort Gaugh testified that on June 28, 1922, at the time of the exchange by Mort Gaugh of the Lone Jack farm for the Ninth Street property, and the procurement of the loan for $10,000 from the Pioneer Trust Company, to pay the difference, he and Judge Gaugh were together, when they made the written financial statements to the Pioneer Trust Company above
Walter Gaugh testified that Mort Gaugh bought and paid for the Courtney farm and the Lone Jack farm. Mort Gaugh testified that he had never taken title to any property bought by his father.
A great deal of evidence was introduced directed to the end of showing the financial condition of Judge Gaugh and of Mort Gaugh as well, in the years preceding the death of the former. The respondents claim that Judge Gaugh had ample means and owned all the property, and that his sons had little or nothing. The Federal Income Tax returns made by Judge Gaugh for the years 1913 to 1921, inclusive, were introduced in evidence. These returns showed net income of Judge Gaugh in 1913 of $4,250; in 1914, $6,192.89; in 1915, $5,915.03; in 1916, $3,272.47; in 1917, $4,748.30; in 1918, $4,059.09; 1919, $1,944.48. In 1920 there was a non-tax report, and in 1921 the return was $1,641.13. In all of these except for 1913, he included the income of his wife. In all of them from 1913 to 1918, inclusive, he included the net income of the printing and binding business. The return for the year 1919 did not contain a return of income from the printing business and did contain the notation: “Printing business sold January, 1919.” Rents were included in these statements, but the specific properties from which the rent was received were not stated, prior to the return for 1917. In that return the properties listed as producing rents were, 4512-14 Forest Avenue; 3339 Paseo; 304 Main Street and what is spoken of as the Grandview farm. Judge Gaugh also owned property at 3341 Paseo,
The county treasurer was called to testify as to what the books showed of the income of the Gaughs for tax returns to the State. In 1917 Judge Gaugh‘s name did not appear. In 1918 an income of $260; in 1919, $2,344; in 1920, $3,790. There was no return for 1921. Mort Gaugh‘s name was not on for income tax in 1918, but in 1919 his name appeared for an income of $2000, which the witness said was abated by the assessor in full—reason not shown. He was not on the books for 1920, and in 1921 his return was $537. Walter Gaugh‘s name was not on the books for 1917 and 1918, but was on the books for an income of $888 in 1919 and $681 in 1921, but not on the books for the year 1920. The Union Printing & Binding Company was not on the books for the year 1919, 1920 or 1921. The Queen City Company was on the books for an income of $455 in 1917; not on for the year 1918, but was on for $174 for the year 1919; $1000 for the year 1920, and $613 for the year 1921. The testimony showed that during a considerable period of years preceding his death, Judge Gaugh had bought and taken title in his own name, and afterward sold, a number of pieces of real estate. These included the Grandview farm, also a farm of forty acres spoken of as the Selsa farm, and certain properties in Kansas City—a property on Vine Street, one on East Eleventh Street, 2909 Forest Avenue, 3009 Benton Avenue, 219 Main Street, and an interest in a lot at Third and Wyandotte Streets.
The evidence showed that Judge Gaugh acquired and took in his own name the two houses on the Paseo, in the years 1900 and 1905, respectively, and the properties at 4512-14 Forest Avenue in 1917. The last of the properties taken and held by him in his own name at the time of his death were the Grand Avenue buildings. This was conveyed to him in October, 1921, for an expressed considera
In passing from this phase of the evidence as to title to the property, it may be mentioned that Karalee Rankin in her testimony hereinafter referred to, stated the title to the Courtney farm and other property claimed by Mort Gaugh was placed in Mort Gaugh, because of the existence of differences between Judge Gaugh and plaintiff Maude Gaugh, and because of her unwillingness to join her husband in conveyances; but, aside from the testimony of Karalee Rankin on that point, there is no evidence that Maude Gaugh refused to join in a conveyance of property held by Judge Gaugh in his own name, or that he put title in some one else, because of differences with his wife. Related to this point, however, is the fact that it appears Maude Gaugh claimed, as a provision made for her, the property at 304 Main Street, which Judge Gaugh had caused to be conveyed to her in 1902, which, as heretofore stated, she sold, and received the proceeds of the sale.
There is another transaction concerning which much testimony was given. This was the purchase, about 1912, of a farm in Kansas spoken of as the Humbolt farm. Apparently, it was bought on the theory that oil would be found. The title was taken in the name of Mort Gaugh, and Fratcher, heretofore mentioned, was also interested in it, and it appears two other men, one Vance and one Watkins. Fratcher testified that all of them, including Judge Gaugh, went to look at the farm. According to the testimony of Mort Gaugh, some misunderstanding arose as to the price and Judge Gaugh did not go forward in the purchase of it. The total price paid was $10,000. Fratcher‘s testimony seems to indicate that Judge Gaugh was concerned in the purchase, and payment of some part of the purchase price, but this is not wholly clear. They drilled upon the land and no oil was found. Fratcher says that he and Mort Gaugh bought out the interest of Vance and of Watkins. This property was afterwards traded for property in Kansas City, mentioned as the Norgrove Apartments and conveyed to the Queen City Company. However, as to the Humbolt farm, the tenant on that farm, held for two or three years before being traded for the Norgrove Apartments, testified that he paid the rent to Judge Gaugh.
Much evidence was introduced by the respective parties as to the financial condition of Mort Gaugh. Respondent put in evidence the record of his savings account with the Missouri Savings Association Bank from May 19, 1915, to July 1, 1923. The largest balance shown during the year 1915 was $882.66, and the balances at times were down to small amounts of only a few dollars. In 1916 the largest balance shown to the credit of Mort Gaugh was $1,125.44 on January
Mort Gaugh testified that he had kept a savings account with the Missouri Savings Association for about twenty years, but the record for the years preceding the year 1915 was not shown. It appears from the testimony of the bank official that the book could not be located, but he said Mort Gaugh had an account in 1912 and perhaps 1911. The testimony showed that the check by Mort Gaugh for $2250 given on December 3, 1912, as part of the purchase price of the lots bought of McTierman, being the property at 404-406 Admiral Boulevard, was drawn upon the Missouri Savings Association Bank. The cancelled check was produced in evidence showing McTierman‘s indorsement thereon, and its payment. Appellants introduced in evidence the checking account of Mort Gaugh on the Missouri Association Bank. This was an account running from January 2, 1918, to May 11, 1923. The balances shown varied, running at times in excess of $1500, and during the latter part of the period between $200 and $800. Appellants also introduced a record of Mort Gaugh‘s account with the Fidelity National Bank of Kansas City, beginning in 1909, and running down to August, 1922. This seemed to be an active account but at no time was there shown a balance in excess of $1000, and frequently the balance was $100 or less. Mort Gaugh seems also to have had a checking account with the Central Exchange Bank in the year 1919, and for some time thereafter. The checks given by him in payment of labor employed in the improvement of the Courtney farm appear to have been given upon this bank. In a similar way he had an account and gave checks upon the Home Deposit Trust Company. This was in the year 1922.
Col. Elliott, an official of the Farm & Home Savings & Loan Association was called as a witness by Mort Gaugh, and testified that on April 16, 1912, Mort Gaugh took a certificate in the Association for
We have heretofore referred to testimony as to statements by Judge Gaugh that the Courtney farm belonged to his son Mort Gaugh. The respondents introduced testimony as to certain declarations of Judge Gaugh as tending to show that he was the owner of the Courtney farm. There was also introduced in evidence a blue print made by the county surveyor, in 1919, of a line of roadway at the farm. This blue print, or sketch, seems to have been a paper in the hands of the administrator. It had indorsed upon it the following: “Sketch of proposed improvements on the farm of Judge Gaugh, Section 24, Township 50, Range 52.” This, Mort Gaugh said, was a blue print of the road from the gate to the house, and he testified it was made by the county surveyor as a courtesy to his father, but that he himself had marked off the line of proposed improvement and caused it to be done and paid for the improvements. Earl Rankin, husband of Karalee Rankin, testified that Judge Gaugh always spoke in Mort‘s presence that it was his (Judge Gaugh‘s) farm. The witness lived in New York City and testified that he had been on a visit in the summer of 1921, and was at the farm, and that Judge Gaugh spoke of it as his farm, and that Mort Gaugh never disputed it. Dean Franklin, brother of respondent Maude Gaugh, testified over the objections of appellants, that he had frequently heard Judge Gaugh speak of this farm as his farm and what he intended to do with it, and that he spoke of getting a road built there; that it was a tremendous expense, but would enhance the value of the farm; that he wanted to get it in such shape that it would be an ideal location for some club.
M. J. Pendergast, city clerk, testified that he was well acquainted with Judge Gaugh and was frequently with him, and had been at the Courtney farm as a guest of Judge Gaugh. He was asked if he ever saw Judge Gaugh give any directions or orders around the farm. He answered: “Well, I seen he talked to the men down on the farm several times.” In another place he said: “I heard him tell men down there what to do. I seen him go down and get the cows and milk them.” He did not know, however, whether he had ever talked to the judge about the farm in the presence of Mort Gaugh. On his
Karalee Rankin‘s testimony in the main related to occurrences during two periods of time when she was in Kansas City. As to the first of these, there is dispute whether she arrived in Kansas City on June 30, or July 2, 1922. The second was for a time beginning September 14, 1922, when she and her husband came to Kansas City immediately after the death of Judge Gaugh. The time when she arrived in Kansas City on the first of these two visits referred to, was a sharply defined issue in the testimony. Her testimony was that she came to Kansas City, and was with her father on June 29, 1922, or June 30, 1922, when he opened his safety deposit box at the Commerce Trust Company, in her presence, at which time, she testified, she saw numerous bonds, certificates and documents, and among them deeds from Mort Gaugh to Judge Gaugh. She fixed June 29, more positively as “the first, last and only time” she was with her father when he opened the box, but on the reopening of the case, said it was June 28, 1922. The safety deposit records of the Commerce Trust Company showed that Judge Gaugh was in his box on June 28, 1922, at 11:47 A. M.; on June 30th, at 9:12 A. M., and on July 3d, at 1:56 P. M. Respondents’ claim is that on September 12, 1922
Appellants deny that Walter Gaugh took said papers, and claim that Karalee Rankin fixed the time when she said she was with Judge Gaugh and saw these documents, as of June 28, 1922, or if not then, on June 30th, when in fact she was not in Kansas City on either of those dates, because she knew at the time she testified that the records showed Judge Gaugh had visited his safety deposit box on June 28th and June 30th; and that she did not fix the time as of July 3, because, although she was in Kansas City on July 3, she spent the afternoon of that day in writing letters at the Elks Club, after lunch at the club with her father and brothers. Mort Gaugh testified that she remained at the club that afternoon. It appears that Mort Gaugh lived at the club at that time. The records of the entries of Judge Gaugh on June 28, and June 30, and on July 3, had been introduced in evidence before Karalee Rankin testified, and these and other entries of the safety deposit boxes bore relation to still other circumstances, as will more fully appear.
The testimony showed that Judge Gaugh died between six and seven o‘clock on the morning of September 12, 1922, at Excelsior Springs, where he was temporarily stopping with his wife, Maude Gaugh; that Walter Gaugh was advised of his death, and started at once for Excelsior Springs; that in going to the Interurban Railway Station, he left word for Mort Gaugh at the Elks Club. Walter Gaugh reached Excelsior Springs at 9:45 A. M. and Mort Gaugh came on about one hour later. Walter Gaugh returned to Kansas City the same day, arriving at about 12:30. The record kept by the Commerce Trust Company showed entry by Walter Gaugh, of the safety deposit box, kept by Judge Gaugh and Walter Gaugh, at 2:48 P. M. of that day. The record kept by the Missouri Savings Association Bank showed the entry of the box kept in the name of Walter Gaugh and Mort Gaugh at 2:56 P. M. of that day, by some one, but that record did not show by whom the entry was made.
Recurring now to the testimony of Karalee Rankin connected with the occasion, June 29 or June 30 and the safety deposit box of the Commerce Trust Company: On her direct examination, when asked what she saw in that box that day, she said: “I saw a deed from Mort Gaugh back to father, and the reason of that is that father was afraid“. She was then admonished by her attorney not to tell the
“Q. I want you to confine it to one thing at a time. How much of that deed did you read? A. I read on there ‘from G. Mortimer Gaugh’ outside. On the top was a ‘warranty deed’ and it was a deed from G. Mortimer Gaugh to Dad.
“Q. Yes, how many? A. There were at least three or four and probably five or six, I don‘t remember that.
“Q. When you looked at the body of the instrument you saw what was the description of the land? A. Why, certainly not. Dad just picked those up. He says: ‘I want you to see these things,’ and he picked them up for me to see them. He took those Liberty bonds, fanned them out like that, and I saw quite a number of those.”
There is weighty testimony that Karalee Rankin did not leave New York City until the night of June 30, 1922, and reached Kansas City on July 2, 1922. It tends to show that she came to Kansas City at that time for two purposes. The one was to obtain some money, and the other was for treatment for an illness by Dr. Kanoky of Kansas City. Mrs. Knox, Karalee‘s mother, was living with her in New York at that time, and testified that Mrs. Rankin suddenly decided on June 29th, to go to Kansas City, after an examination by a physician in New York, and that she left for Kansas City on the evening of June 30th. Mort Gaugh testified that she arrived in Kansas City on Sunday morning, July 2d, and that he met her at the station and took her to Walter Gaugh‘s house. Mrs. Burnett, who lived at the home of Walter Gaugh, testified that Mrs. Rankin came to Walter Gaugh‘s home on Sunday before the 4th of July, 1922.
Karalee Rankin left with her father the certificate for the Flour Mills stock. The testimony of Mort Gaugh and of Mrs. Knox shows that Karalee Rankin desired her father to raise an additional $2500 for her, which he apparently was unable to do during her stay in Kansas City at that time There was introduced in evidence a receipt, dated August 29, 1922, given by Judge Gaugh to Karalee Rankin, for
Mort Gaugh testified that his father gave him the Flour Mills certificate for the purpose of borrowing $5000, the amount desired by the Rankins, and that on September 11th, he succeeded in arranging to procure a loan, and accordingly on that day, sent a telegram to Karalee Rankin. That telegram was received by her, and she told her mother on receipt of it, that she would not give any note for $5000. The telegram announcing Judge Gaugh‘s death went the next day.
The contention of appellants was that the Flour Mills stock was left as collateral security and evidently, that the $2500 loan by Judge Gaugh was to be taken up. Karalee Rankin insisted that it was not; that the $2500 was not borrowed from her father, but that he gave it to her, and that she only left the certificate with him for safe-keeping. Earl Rankin admitted drawing the $2500 draft, and its payment, but denied that he ever borrowed any money from Judge Gaugh. Karalee Rankin testified she bought an automobile with the money. The transaction and dispute about the Flour Mills certificate of stock formed the subject of a replevin suit, pending between the
Although the receipt given by Judge Gaugh to Karalee Rankin was dated August 29, 1922, she insisted that the certificate for the Flour Mills stock was given to him on June 29, 1922, the very day and time, she said, when she was with him looking at his safety deposit box, and she said he put it in the box on that day and on that occasion.
As showing the character of the testimony of Karalee Rankin concerning statements of Judge Gaugh we set out portions of it:
“Q. During your father‘s life with Walter and Mort together, did you four ever have any discussion in reference to your father‘s property? A. You mean father and Mort and Walter and I?
“Q. Yes. A. We certainly did. He would frequently say that the dream of his life, if he ever should die, was to leave his children independent for life, all of them.
“Q. Did he enumerate his properties? A. Yes, sir, he did so, frequently; in fact, about this place that Mort claims he owns, I went back to New York and those Benton Boulevard premises were to be sold out there, and I was to have $5000 on the first of October on that.
“MR. HACKNEY: I don‘t think she stated whether that was in the presence of Mort and Walter. A. Yes, that was in the presence of Mort and Walter, Mr. Hackney.
“Q. Did you ever discuss with the three of them the title and ownership of the Courtney farm? A. Absolutely.
“Q. What was said? A. It was said that father was obliged to buy this farm out here because it increased his life fifteen years; they said that when he went out there he was a broken down man, and that summer I was here his cheeks were just as red and he was healthier than I am this minute.
“Q. Was anything said about the record title and the real ownership of it? A. He said very frequently it was a known fact that he
would put things in Mort‘s name for convenience because Mrs. Gaugh would not sign deeds. Now, wait just a moment— “Q. What was said in reference to the Courtney farm? A. Yes, sir, this whole thing was said in reference to it one night down there in front of a wood fireplace, you see, down there, and dad and the little Taylor boy and myself, and we all spoke about it, and it was even spoken of that night if I would come on down and live there they would build me a house down there. I says, ‘You don‘t get me out here, there are too many chiggers.’
“Q. What was said and who said it? A. What was said about what?
“Q. Who owned the property? A. Why, Mort admitted that father owned the property, there wasn‘t any question, Mort would tell father didn‘t he think this would be a good idea to do thus and so, and father would say ‘No, you don‘t know anything about anything, keep still.’
“Q. What did Judge Gaugh say about the farm? A. He said he bought it.
“Q. Did Mort dispute it? A. Absolutely not, he said he bought it very cheap too, and he said he was going to make a golf club, and later Mr. Ferd Heim and father sat down here at the Elks Club and laid out a plan whereby—”
Again we set out more of her testimony, in which she apparently refers to conversations had both before and after her father‘s death, and refers to the stock in the Queen City Company.
“Q. Now, did you have any talk with them about the Queen City Building & Investment Company? A. I had a talk with them and father for years about it, ever since 1917, talked with father and talked with them, and talked with them in the presence of father, and father in the presence of them.
“Q. We are speaking after your father‘s death? A. Many a time, absolutely, of course.
“Q. What was said? A. There was no question but what it was going to be share and share alike, the question was this, that father owned every bit of that stock except one share which was in the name of each of us, it was father‘s company, they knew the same as I did, of course.
“MR. HACKNEY: I object to her statement as a conclusion.
“THE COURT: Sustained.
“Q. Is that what they stated to you? A. Absolutely that it what they stated to me.
“Q. Did they ever state to you that they did own the stock of that company? A. Quite to the contrary. Mort said that he knew that he didn‘t have any interest in anything, because formerly he had told
Earl that he borrowed the $2500 on this receipt—I forgot to put that in—and so when I said— “BY MR. HACKNEY: Q. Was that in the presence of Mr. Rankin? A. Yes, that was in the presence of Mr. Rankin, I beg your pardon, Mr. Hackney.
“Q. It was in your presence that that discussion between Earl and Mort had come up? A. That was in the car going out to Walter‘s house before father was buried when Mort said, when we said we had a receipt for that, Mort said, ‘Well, I borrowed that money,’ I was right with my father when he went and got bonds and sold them, that was in the safe deposit box.
“Q. Now, did you discuss with Mortimer the matter of the Courtney farm? A. We not only discussed it once or twice or twenty times or fifty times, but we discussed it every day of the world.
“Q. What did he say about it? A. He said that the farm belonged to father, of course there was no necessity even to say that, all of us knew it, everybody knows it in town.
“MR. HACKNEY: I object to that and ask that it be stricken out.
“THE COURT: Sustained.
“MR. WISE: I beg your pardon, she has stated what he said to her.
“THE COURT: No, what everybody knew.
“A. That is what I said, he said that everybody knew it, that they could not get away with that, that is the reason they were going to say they made all this money that bought that farm out there, that was the idea of it.
“Q. Is that what he said to you? A. Absolutely.
“Q. When you stated to him that everybody knew it, did he deny that? A. I didn‘t say to him, he stated to me that everybody knew it, that was the reason they were going to threaten them off and on.
“Q. Did you have any talk with them about the business or ownership of it? A. Absolutely, they gave me $500 out of the business, they charged everything I ever got, and it was paid with Union Printing checks and we wondered and asked Walter in our brother‘s house, he said, ‘Father paid the bills.’
“Q. I am asking after your father‘s death? A. That is what I am telling you, there never was any question the business belonged to father, never was any question in the world about it, they never denied it.”
The receipt referred to in the testimony was the one for the Flour Mills certificate.
In one part of the testimony of Karalee Rankin as shown by the record, she places herself as present when Judge Gaugh sold the $4000 worth of Liberty bonds to the Commerce Trust Company. She does this in undertaking to state what she told the officials of the Commerce Trust Company after her father‘s death. As she relates
The circumstances under which Walter and Mort Gaugh acquired title to the Admiral Boulevard property should be noticed. This is the property which was conveyed by them to the Queen City Company. Walter Gaugh testified that he bought the property known as 408-410 Admiral Boulevard in October, 1909, from Mr. McTiernan and received the deed for it. This deed was put in evidence. He testified that in this purchase he dealt with McTiernan himself, and McTiernan‘s testimony does not tend to show that Judge Gaugh took part in the negotiations. Walter Gaugh sold one-half interest in this property to Fratcher, and thereafter a building was erected upon the property. Fratcher was also engaged in a printing business carried on in this property and it appears Judge Gaugh had some interest in the Fratcher printing business.
Walter Gaugh‘s testimony is that his father gave him the money to buy the lot. He said that he had gone to work in the printing business to learn it when he was fourteen years old, and remained with it continuously thereafter. He said he had done some individual jobs in which he had earned some money, and mentioned one, for which he said he had a profit of $2500. He testified, however, that in the erection of the building at 408-410 Admiral Boulevard by himself and Fratcher, Judge Gaugh watched the construction work, and paid the contractor. He asserted that he bought the property and held it as his own until he conveyed it to the Queen City Company.
Mort Gaugh testified that he bought the property at 404-406 Admiral Boulevard, and received a deed thereto in 1912; that the cash payment made at the time of the purchase was by his check for $2250 on the Missouri Savings Association Bank. The canceled check to McTiernan was introduced. He further testified that for the other part of the purchase price he made a loan on the property, and made a succession of deeds of trust to secure loans, until the rents paid the loan. The several deeds of trust showing those transactions were introduced.
The transactions involving the issuance of certificates of stock in the Queen City Company are to be noticed. The evidence is un-
We return, to notice certificate 42 for one share to Mort Gaugh and certificate 43 to Walter Gaugh, issued June 11, 1917. Each of these was indorsed to George G. (Judge) Gaugh. As introduced in evidence, as the record shows, the indorsement on each carried revenue stamps, and that these revenue stamps were marked as cancelled “6-11-17.” A witness introduced by respondents was shown certificates Nos. 45 and 46 bearing revenue stamps cancelled, with notation, “6-11-17.” The witness said the stamps were of the issue of 1918. When and by whom the notation was made on the stamps is not made clear by the evidence. Mr. Longnecker testified that the two certificates, Nos. 42 and 43 for one share each, issued respectively to Mort Gaugh and Walter Gaugh, and indorsed by them respectively to Judge Gaugh, were done for the reason it was necessary for Judge Gaugh to have shares of stock for corporate purposes, and to qualify him for president of the company, and in order that there might be three resident owners of stock. These two certificates, 42 and 43, also bore the notation “canceled.” They were succeeded by certificates 49 and 50 for one share each, issued to Mort Gaugh and Walter Gaugh on September 19, 1922. The certificate No. 44 to Karalee Rankin remained untransferred. Mr. Longnecker in his testimony justified and explained the cancellation of certificates 42 and 43 on September 19, 1922, and issuance of certificates Nos. 49 and 50 in lieu thereof, by saying that Judge Gaugh was not the actual owner of certificates Nos. 42 and 43, or of any shares, but only held those shares in trust and to qualify him for president of the company. His statement that Judge Gaugh was not the owner was stricken out. The validity of these cancellations is disputed by respondents, but it is not claimed that the indorsements in blank on Nos. 45 and 46 are not the genuine signatures of Judge Gaugh. The only signature which respondents claim is a forgery is the signature to Exhibit 14,
The testimony as to occurrences after Karalee Rankin arrived in Kansas City after the death of her father, requires notice. She testified that she and her husband were met at the station by Walter Gaugh and Mort Gaugh; that she and her husband rode in the car driven by Mort Gaugh to Walter Gaugh‘s house; that immediately after they started to drive from the station Mort Gaugh said to Earl Rankin: “Well, we got away with everything, we went south with everything, we even got your stock, we have got your note for $2500;” that Earl Rankin replied he had given no note, and that she, witness, stated that she had a receipt for the stock; that she handed it to Mort and he read it, in another part of her examination saying, he had driven with one hand, holding the receipt with the other; that upon reading the receipt Mort Gaugh said: “Oh, for heaven‘s
Karalee Rankin remained in Kansas City on this occasion for about a month, and according to her testimony, her brothers continually persisted in talking about the property—what they had done with it and what the widow should have. She testified that they said: “We have just to get rid of this thing, she is coming in here and claiming everything, and the minute we can get her settled and out of the way, then we will divide things the way they should be and the way Dad wanted it.” The witness then added: “Wait a minute—they said father said to drive this woman out of this town. Mort said and Walter said it, both.”
Mrs. Rankin often mingles together in confused statements, transactions and conversations unrelated in time or subject-matter. Her mother, Mrs. Knox, testified that Mrs. Rankin at the time was in such condition that she was not responsible for her acts.
There is much testimony that Karalee Rankin, during the period following her father‘s death, while in Kansas City, demanded of her brothers that she have one-third of the property, that is, evidently, the property in dispute in these suits, and presumably, what there should be after a settlement with the widow, Maude Gaugh; and that she demanded that an agreement for such division be made in writing; but, that Walter Gaugh and Mort Gaugh said they would not give up what they had worked for. Also, Mr. Longnecker testified that upon the occasion when the foregoing was the subject of conversation between them, he explained to Mrs. Rankin that even if she was entitled to such a division of the property under such an agreement, it could not be done, because, if they made such an agreement, the widow would have evidence to come in on equal terms.
Out of the testimony about these discussions the fact appears that Karalee Rankin told Maude Gaugh nothing of any disclosures made
There is much testimony about the custody of these certificates of the Queen City Company, and where they were kept. Mort Gaugh testified that he kept the certificates; that when the certificates were issued in June, 1917, they were not delivered to his father, but that certificates Nos. 45 and 46 were delivered to him at the time his father indorsed them, and that he kept these certificates in the box at the Missouri Savings Association Bank, “most of the time; that the certificates would be brought out for a meeting. He was asked when he got them out of the safety deposit vault after his father‘s death. His answer was: “The day, that is the night, I got it either two or three days before, I had it temporarily, I went to my room and got the stock, and brought it up to the office.” He said that he got it out of the box some time after his father‘s death, but was not clear as to the time, and said he was not at the Missouri Savings Bank on the day of his father‘s death. He said that he came back from Excelsior Springs on the day of his father‘s death late in the evening, between five and six o‘clock.
Walter Gaugh did not tell plaintiff, Maude Gaugh, that he went in the safety deposit box in the Commerce Trust Company. He did not tell the Trust Company officer his father had died. He testified that all he took from that box was some letters and a life insurance policy belonging to a former wife, and said he took these because he did not want them to fall in the hands of other people. The record showed that he had entered the box in the Commerce Trust Company in June, 1919, but not afterward before the day of the death of his father, a period of more than three years.
In an examination before a commissioner appointed to take depositions before the trial of the cause, Walter Gaugh testified that the
It appears from the testimony that when Maude Gaugh qualified as administratrix, she was accompanied by Mr. J. G. L. Harvey, who died afterward, and they looked at the papers of Judge Gaugh at the office at Admiral Boulevard, and also in the safety deposit box. They found the shares of stock in the Midland Life Insurance Company, and a fire insurance policy, and little else.
Earl Rankin testified that on the same day after this examination had been made, he was at the office at Admiral Boulevard and Walter and Mort Gaugh were there; and that Mort Gaugh then referred to the fact that Harvey said there was nothing of value left in the office, and that Mort Gaugh then said: “Well, I spent most of the night here last night, and I burned up every scrap of paper in this office that will help establish any claim in this property other than that standing in Judge Gaugh‘s name;” that he also said, the widow would have to take what they saw fit to give her, or else she would get nothing. Earl Rankin testified in one place, that he did not protest against the action of Walter and Mort Gaugh; that he “was not concerned in it;” had “nothing to do with it,” but afterwards said he told them he would not consent to any plan or arrangement made with Mrs. Gaugh, if Mrs. Rankin was involved. He also testified that in the discussion at this time, Walter and Mort Gaugh told him that they had no interest in the Queen City Company; that all the property which went into the company belonged to their father. In the same connection, and immediately thereafter, he testified he told them if they would show “where they ever saved a dollar in their life time,” he was willing to talk with Mrs. Rankin and get her to equalize the equity they held in the property; and that to that statement they replied they had no interest in it, and their sister was entitled to an equal share with them, and they would give it to her; that he told them he would not permit Mrs. Rankin to take part in plans to defeat the widow; but if they intended to take charge
The testimony of Maude Gaugh as to the settlement with Mort Gaugh made on December 28, 1922, is to be noticed. Her conveyance to him was of all her interest in the real estate, wherever situate, and in all other property. It was shown that she had a check for $1000 which Judge Gaugh had given her, but which had not been cashed, and that there had been an allowance to her as widow of $1800, and these two items were included in the total sum of $12,900 paid her by Mort Gaugh. She testified that she was not told that Earl Rankin owed the estate $2500; nor, that he also owed the estate a note for $500. As to this $500, Karalee Rankin had testified that Earl gave her his note for $500, which she gave to her father. Concerning this note and a conversation with her father, she testified: “Dad asked then this last time, ‘What do you want me to do with this note? It is not worth a cent—no consideration in it. You want us to charge it up?’ I says: ‘Dad, put it in an envelope with my stock and with my other things in the safety deposit box. It is perfectly all right.’ ”
On the first hearing, before Maude Gaugh filed her second amended bill, she testified, on direct examination, that at the time she made the settlement with Mort Gaugh she was not “informed that Judge Gaugh had an interest in the Queen City Company” and “was not informed that he owned the Courtney farm.” As heretofore shown, she had brought the suits, one as widow and the other as administratrix, more than two months before this settlement was made, and depositions of Walter and Mort Gaugh and of Henry Fratcher and others had been taken. As widow, before filing and election, she had brought a suit in partition. She testified that she had seen copies of these depositions and read some of them. Also, her brother, Dean Franklin, was staying with her during this period, and until after the settlement with Mort Gaugh. Mr. Franklin lived in Oklahoma and was a lawyer. He said he read the depositions. Although, in the suits filed by her, she had claimed that the property held by the Queen City Company and the personal property standing in the name of Mort Gaugh, was the property of Judge Gaugh, she disclaimed having instructed her lawyers as to bringing the suits or taking the depositions. In the first petition in this suit the real estate in dispute was claimed as the property of Judge Gaugh. In the
The suits were originally brought by the firm of Harding, Murphy, Stinson and Tucker, and she said she consulted sometimes with Mr. Harding and sometimes with Mr. Tucker. The settlement was finally consummated at the office of Mr. Tucker. Her brother, Dean Franklin, was present. It appears also that Maude Gaugh‘s deposition had been taken by Karalee Rankin in April, 1923. Parts of this deposition were read upon the trial, over objection of appellants. In that deposition she had stated that her husband told her that property bought that was mortgaged, had to be put in the name of the single son, and as Walter Gaugh was married, he put it in Mort‘s name; that as to the Queen City property, she knew he said he put his property in that corporation. In that deposition also she had stated that Henry Fratcher told her the boys “rifled the safe” the next morning after their father‘s death. It is not absolutely clear from this record whether she claimed that what Fratcher told her about the rifling of the safe was said to her before the settlement made with Mort Gaugh; but it seems reasonably clear that she placed this statement of Fratcher‘s at a very short time after Judge Gaugh‘s death, because, she connects it with the statement that she had wanted Fratcher to administer, but that he said after he saw how things were, he was unwilling to administer the estate. Connected with that same conversation she quoted Fratcher as telling her that he was surprised to know that the Courtney farm was in Mort Gaugh‘s name. Fratcher had testified and denied that he told Maude Gaugh that Walter Gaugh and Mort Gaugh had rifled the safe.
No books of account were produced on the trial—no account kept by the printing and binding company, or the Queen City Company, or book account of transactions between Judge Gaugh and his sons or either of them upon any of the multitude of transactions referred to in the evidence. There was a safe at the office, and some testimony tending to show there was a large ledger in which accounts were kept.
There was testimony to show the values of the various pieces of real estate which have been referred to—those in the name of Judge Gaugh, at the time of his death, those to which the Queen City Company held title, and those to which Mort Gaugh held title. The aggregate value of the real estate in the name of Judge Gaugh was $33,450, less an encumbrance of $5,500. The value of the property at 404-406 Admiral Boulevard was shown to be $53,250. The undivided half interest in the property at 408-410 Admiral Boulevard was $20,000, and the undivided half interest in the property at North Corder Place was $20,000; or, a total value of $93,250 of property to which title was in the Queen City Company. The Ninth Street
Aside from the sweeping oral declarations there is, in all the numerous and large transactions of Judge Gaugh and his sons, with other persons, and as between themselves, virtually nothing to show their interests other than the documents we have referred to, and what was found upon the stubs of cancelled checks, or statements of account of the various banks mentioned. Judge Gaugh had kept an individual account with two or three banks or trust companies. The character of those accounts was not extensively shown. At the time of his death, he had to his credit with one trust company $92 and with another about $2200.
In this suit the first assignment of error is that of admission of the testimony of Dean Franklin and M. J. Pendergast as to declarations of Judge Gaugh that he had bought the Courtney farm and it was his farm. Assignments two, three, four and five amount to a single contention that the court erred under the evidence in adjudging that Mort Gaugh was not the owner of the Courtney farm. Assignment six is, that the evidence did not justify cancellation of the deed from Maude Gaugh to Mort Gaugh, and assignment seven is a contention that, in any event, the decree is inequitable in not requiring Maude Gaugh to first restore to appellant Mort Gaugh the $12,900 paid by him to her.
I. Appellants complain of the admission of the testimony of Dean Franklin, and Mr. Pendergast to declarations by Judge Gaugh that the Courtney farm was his farm. The evidence does not show that these declarations were made in the presence of Mort Gaugh, but it appears they were statements made in ordinary and casual conversations. Mort Gaugh had the legal title to the farm under the warranty deed made to him, and the presumption of his legal possession of it followed. If Judge Gaugh had been in possession of the farm, these declarations would have characterized his possession and have been competent, if the case were one in which the Statute of Limitations and adverse possession were invoked. But, under the circumstances shown, the declarations as testified to by these witnesses was not evidence of title (paper or equitable). [Swope v. Ward, 185 Mo. 316; Farmers’ Bank v. Barbee, 198 Mo. 465; Coulson v. La Plant, 196 S. W. 1144.]
II. The next and chief contention of appellants is that the evidence did not establish a resulting trust as to the Courtney farm. It is the settled rule in this State that to establish a resulting trust, the evidence thereto must be clear and convincing, or, as it is sometimes said, unequivocal, and such as to leave no room for reasonable doubt, and it must be clearly shown that the funds of the person in whose favor the trust is sought to be established went into the purchase of the property. [Forrester v. Moore, 77 Mo. 651; Burdett v. May, 100 Mo. 13; King v. Isley, 116 Mo. 155; Curd v. Brown, 148 Mo. 82; Pitts v. Weakley, 155 Mo. 109; Smith v. Smith, 201 Mo. 533; Jacks v. Link, 291 Mo. 282.]
The Courtney farm was bought after Judge Gaugh had turned over the property and business of the Printing & Binding Company to his sons. The payment of one-third of the purchase price, made before and upon the delivery of the deed, was by checks of the Printing & Binding Company, and the evidence tends to show and the trial court found that Judge Gaugh‘s sons then constituted that company. There was no effort made on the part of respondents to show that Judge Gaugh in any direct way, by withdrawal of funds from any bank in which he might have had a deposit, had anything to do with the payment of the purchase price of the farm.
There is another rule, applicable in cases of this character, that a resulting trust must arise, if at all, at the time the deed is taken, and from the facts as they existed at the time or anterior to the purchase, and that such a trust cannot be created by subsequent occurrences. [Kelly v. Johnson, 28 Mo. 249; Richardson v. Champion, 143 Mo. 544; Stevenson v. Haynes, 220 Mo. 199; Bender v. Bender, 281 Mo. 473.]
There was testimony of positive declarations by Judge Gaugh that Mort Gaugh owned the Courtney farm, and these declarations were made under circumstances when its ownership—the right to give ground for a driveway, and the right to lease the farm—were under consideration; and they were made in the presence of Mort Gaugh, and no interest in the result of this suit is apparent in the witness who testified to those declarations. Judge Gaugh‘s memorandum or notation, in his own handwriting upon the envelope containing the title guaranty to the farm, is of some significance. In listing the property owned by him, to the Pioneer Trust Company, he made no mention of this farm, although, in that statement he did mention the property standing in the name of his wife; and he must have known that Mort Gaugh, in the statement made by him at the same time, and for the purpose of securing credit, was listing the Courtney farm as his own.
Our conclusion under all this evidence, is that respondents failed to show clearly and unequivocally that the funds which paid for the
III. The scope of the allegations, and the relief sought under the second amended petition, require that the status of the ownership of the shares of the Queen City Company be determined. In respect to that claim, and in that suit, appellants contend that they became the equitable owners of all the stock of that company, on delivery of their deeds in June, 1917; and further, that by affixing his signature to an assignment of the stock certificates at the time of the delivery of the deed, Judge Gaugh created an express trust in that stock for the benefit of appellants; and, that since he paid nothing into the capital stock of the Queen City Company there could be no resulting trust in his favor in respect to that stock; but that if appellants did not obtain title to the stock in accordance with the alleged agreement, a resulting trust arose in their favor, by their conveyance of their properties to the Queen City Company. Appellants also make the further claim that respondents are bound by the testimony of Walter Gaugh as to what he took from the safety deposit box; and complain of the action of the court in excluding the statement of Mort Gaugh and Mr. Longnecker, that it was the agreement and understanding that Judge Gaugh should have no interest in the stock which might stand in his name. As to the statements so excluded, they were statements in the form of conclusions.
First, as to the contention that because respondents made Walter Gaugh their witness, they are bound by his statement that he took nothing from the safety deposit box. Counsel cite Manchester v. Harrington, 199 S. W. 242; Claflin v. Dodson, 111 Mo. 195; Rodan v. St. Louis Transit Co., 207 Mo. 394, 403. These cases announce the doctrine that a party who calls his adversary as a witness cannot directly impeach him. In those cases statement is made to the effect that the witness sustained himself consistently under examination. That cannot be fairly said of the testimony of Walter Gaugh in this case. The rule applicable under the circumstances here shown, is stated in Black v. Epstein, 221 Mo. 1. c. 304: “The rule applicable
Contradictions and evasions appear in the testimony of appellants as witnesses, upon the question of ownership of this stock, and where and by whom it was kept. While respondents did not and could not attempt directly to impeach them, the whole of the testimony of appellants was for consideration by the court in its relation to all the other evidence.
Appellants argue that Judge Gaugh created an express trust for appellants in the shares of stock, by his assignment of the certificates, his disavowal of any interest in the stock, and his agreement that his sons should own all the stock. It is urged that shares are personal property, under the statute, and that an express trust in personal property may be declared by parol, and so proven. Founded upon the same assumption of facts, it is argued there could be no resulting trust in favor of Judge Gaugh in any of the property which stood in appellants’ names and was conveyed by them to the Queen City Company; and, that if appellants did not obtain title to the stock in accordance with the agreement with their father, a resulting trust arose in their favor by reason of their conveyance of their real estate to the Queen City Company. The conclusions urged take life only if the facts assumed are conceded. As to all these contentions which would reach the same result, the paramount inquiry is as to the facts, and the reasonable inferences to be drawn therefrom. The reasonable inference is that the certificates were in the possession of Judge Gaugh. There is the testimony of the appellants to the effect that they were the beneficial owners of the properties conveyed to the Queen City Company. The conditions or theories advanced under which appellants claim ownership of all the shares, are to be considered in the light of the evidence as to the value of the properties involved in these suits, the relation of the parties and their probable financial condition, and further, in view of the evidence tending to show that appellants appropriated, and concealed or destroyed, evidence of the real ownership of the properties. We have heretofore stated the evidence as to the values of the various properties. From that, it appears that the aggregate net value of the real estate—that in the name of Judge Gaugh, that in the name of Mort Gaugh, and that in the Queen City Company—was $168,000, and of this, the net value of that held by Judge Gaugh was $28,000 in round numbers, or, only one-sixth of
In the action taken in June, 1917, certificates for seventy-seven shares were issued to him, and he indorsed them. At the same time certificates, for one share each, were issued to the appellants which they indorsed. The reason for these converse acts is not explained. Appellants had some testimony that the shares were delivered to them respectively, at that time, but the testimony on that subject is not satisfying, and their testimony as to where these certificates were kept is evasive and contradictory. There is no explanation of the rather singular circumstance that the revenue stamps affixed to the indorsement of these shares, said to have been made on June 11, 1917, were, in fact, stamps not issued, nor obtainable, until 1918. Earl Rankin testified that there were no stamps on these certificates when he saw them at the meeting held on September 19, 1922.
From the conduct of appellants and of Karalee Rankin, as shown by their own testimony and by circumstances otherwise appearing in the record, certain things are reasonably clear. They were agreed upon one point—that respondent, Maude Gaugh, should have as little benefit as possible from the estate. It is clear that Mort Gaugh intended that Karalee Rankin should account for the $2500 obtained from her father, but he at no time mentioned that transaction to Maude Gaugh as administratrix. Karalee Rankin‘s position was that the $2500 was a gift, and she was not admitting that it should be charged against her share in the estate. In the period following Judge Gaugh‘s death, and while she remained in Kansas City, she was willing for appellants to withhold from their stepmother any knowledge of an interest of her father in the Queen City Company property, or other property not standing openly in his name, and willing that the stepmother should have no share in such property, and she then conveyed to Maude Gaugh no information of what her brothers were saying to her, about having “gone south with everything;” but, was demanding that if the stepmother were settled with, or excluded, she (Mrs. Rankin) should have a share equal to that of each of her brothers. They were refusing to make any agreement in writing, and probably denying her right to a share equal to theirs. Thus they stood, when Karalee Rankin returned to New York. Then followed the settlement between Mort Gaugh and Maude Gaugh in December, 1922. As to what communications took place, if any, between Karalee Rankin and her brothers between December and the April following, the record is silent. But, at any rate, in April, Mrs. Rankin returned to Kansas City, and after her return told Maude Gaugh of the statements made by Mort Gaugh, and began taking depositions, and making preparations to prosecute the suits, which had been filed by Maude Gaugh. These circumstances, added to the other testimony direct or circumstantial, lend credence to the testimony of Karalee Rankin that her brothers, and especially Mort Gaugh, told her they had taken, or made away with, everything that could be of benefit to the widow, so that the widow would have to take whatever they saw fit to give her, of the property, other than that standing unquestionably in the name of Judge Gaugh.
There is evidence in the record that Mort Gaugh, in addition to assisting in carrying on the printing and binding business, was for a time engaged on the side, in selling automobiles for a dealer whereby he earned some commissions; also that on occasions he sold diamonds on commission; and for a time, in his younger days it seems, served as a policeman. But taking all this evidence together, two things seem reasonable. First, that Judge Gaugh was the real owner of far more than that which stood of public record in his name,
IV. This court has several times given effect to the rule that where a party to a suit has been guilty of spoliation of documentary evidence, he is held thereby to admit the truth of the allegation of the opposite party, and this upon the ground that the law, in consequence of the fraud practiced, in consequence of the spoliation, will presume that the evidence destroyed will establish the other party‘s demand to be just. [Pomeroy v. Benton, 77 Mo. 64, 85; Hunt v. Sanders, 288 Mo. 337, 351; Haid v. Prendiville, 292 Mo. 552, 565.] See also Tracy v. Buchanan, 167 Mo. App. 434; Stuckes v. National Candy Company, 158 Mo. App. 359; Shawhan v. Shawhan Distillery Company, 195 Mo. App. 450, 495. This record shows Judge Gaugh for a long period of years was proprietor of a business which was a prosperous business; and while his sons worked with him in the business, he did not turn it over to them until he was far advanced in years, and had been elected a county judge; and, holding that office, could not continue to furnish books to the county. In that long period he alone, or he in some sort of connection with his sons, and especially with Mort Gaugh, took part in many transactions. To us the claim that the sons had accumulated property several times as valuable as the property owned by him seems unreasonable. It seems unreasonable too that his personal representative could find virtually nothing to disclose the condition of his estate. Circumstances warrant the belief that appellants did not leave undisturbed, his effects, and the evidence of the real extent and situation of his property; and on that account the presumption must go against them.
V. Error is assigned in the action of the court in cancelling the conveyance from Maude Gaugh to Mort Gaugh upon the ground that she did not offer to refund the money she received but only stated her willingness to account for it with the administrator and her co-heirs. The statement in the second amended petition was that respondent “is desirous to do equity, and is willing to account to the administrator of the estate and to the co-heirs of the deceased for the $12,900,” followed by the averment that her share of the personal property was of the value of $50,000 and far exceeded the sum of $12,900. This, with the general prayer for relief, was sufficient to invoke the power of the court to prescribe and impose upon respondent the duty to
It is further urged that respondent‘s attempted rescission came too late. Counsel cite Estes v. Reynolds, 75 Mo. 563; Taylor v. Short, 107 Mo. 384; Morgan Coal Company v. Halderman, 254 Mo. 596, 651. The first of these cases mentioned was a suit at law for damages for fraud and deceit. The others were suits in equity. The rule to which the respondent was subject was that she should act in a timely manner, and the length of time may “depend upon the circumstances,” as was said in the Halderman case. There is and cannot well be an absolute rule upon this subject. Each case is to be determined according to its own particular circumstances. Maude Gaugh testified that she first learned in April, 1923, that the appellants or one of them had been in the safety deposit box at the Commerce Trust Company; that this was told to her by Karalee Rankin, who said that she knew they had entered the box and taken papers. Her testimony is that Mort Gaugh began efforts to settle with her not long after her husband died; that he came to see her on two or three occasions and procured one or more other persons to see her. Mr. Tucker, a member of the firm engaged by her in the matter of the estate, testified when the cause was reopened, that he did not advise her in making this settlement; that the settlement was consummated in his office, but that he did not advise, because the parties came, saying to him that they had agreed upon a settlement. After that, in April, 1923, came the information that the safety deposit box had been entered, and papers taken; and later the cause went to trial, and while under advisement, the court permitted it to be reopened, the second amended petition to be filed, and the evidence to be taken. The trial judge was familiar with the facts and circumstances surrounding the parties and the property. No change in the condition of properties or the parties was shown making it inequitable to demand a rescission.
The question whether the respondent Maude Gaugh, acted with reasonable promptness under the conditions existing, or was guilty of laches, was one addressed to the sound discretion of the court. [Kellogg v. Moore, 271 Mo. 189; Troll v. St. Louis, 257 Mo. 626; Marshall v. Hill, 246 Mo. 1; Pike v. Martindale, 91 Mo. 268.] Its finding upon that issue will not be disturbed.
The court made its order, cancelling the conveyance in view of all the evidence in both cases, upon the finding in this case that the Courtney farm was the property of Judge Gaugh, and, evidently in view of the finding in the suit of the administrator that the seventy-seven shares of stock of the Queen City Company were also the property of Judge Gaugh at the time of his death, and belonged to his estate. We hold the plaintiff failed to establish a resulting trust in the Courtney farm, and so much of the decree is reversed; but, we hold that the conveyance should be cancelled in so far as it operated as an assignment of the interest of the respondent in the seventy-seven shares of stock of the Queen City Company. An accounting can be had as between the respondent Maude Gaugh and the appellants, and appropriate orders can be made to that effect. The court can modify the judgment herein as heretofore indicated, taking into consideration its decree in favor of the administrator in the other suit, affirmed on the appeal in that suit.
The judgment herein is reversed and the cause remanded for modification of the judgment as above directed.
PER CURIAM:—This cause coming into Court en Banc from Division One, the foregoing divisional opinion by LINDSAY, C., is adopted as the decision of the court. Ragland, Atwood, Walker and Gentry, JJ., concur; Gantt, J., concurs in the result; White, C. J., and Blair, J., dissent.
THOMAS J. SEEHORN, Administrator of Estate of GEORGE G. GAUGH, v. WALTER W. GAUGH and GEORGE M. GAUGH, Appellants, and KARALEE RANKIN.—11 S. W. (2d) 750.
Court en Banc, November 24, 1928.