Case Name: McDANIEL v. PARISH
Court: Court of Appeals of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1894-10-02
Citations: 4 App. D.C. 213
Docket Number: No. 257
Parties: McDANIEL v. PARISH.
Judges: 
Reporter: Reports of Cases Adjudged in the Court of Appeals of the District of Columbia
Volume: 4
Pages: 213–229

Head Matter:
McDANIEL v. PARISH.
Fraud ; Fraudulent Transfers ; Father and Child.
1. Fraud is not to be presumed, nor can it be established except upon clear proof, either circumstantial or direct.
2. If the form and design of a transaction assailed for fraud may be traced to an honest and legitimate source equally as to a corrupt and fraudulent one, the former should in all cases be preferred.
3. Suspicious circumstances are not the equivalents of proof; and unless all the facts and circumstances of a given case, when taken together, are strong enough to generate a clear, rational conviction of the existence of the fraud charged, that conclusion ought not to be adopted which will destroy a prima facie good title to property, and blacken the characters of the parties concerned.
4. Where in a suit in equity by creditors to subject to their claims certain real estate which is in the name of a third person, but which is alleged to be the property of their debtor, a prior unrecorded deed of the property to the debtor’s daughter is recorded after the commencement of the suit, and the testimony taken shows that about seventeen years before the filing of the bill, and when she was but 18 years old, the daughter had contracted with her father to manage his household and care for her invalid mother, for $50 a month and her support and maintenance, and that the property in question was paid for, in partial satisfaction of the debt due the daughter, out of lump sums of money received by the father 11 and 14 years after the date of such contract, the circumstances while suspicious are not sufficient to cause the deed to the daughter to be invalidated for fraud.
5. A father, after emancipating his minor child, may himself contract to employ and pay the child for his services, and be bound in consequence like any stranger to fulfill his agreement.
6. While in an equity suit the failure of a person to testify, whose testimony would naturally be of importance to one of the parties, may furnish ground for suspicion and adverse comment, such failure cannot bo allowed the effect of impeaching and discrediting the testimony of other witnesses.
No. 257.
Submitted June 7, 1894.
Decided October 2, 1894.
Hearing on an appeal by the complainants from a decree of the Supreme Court of the District of Columbia, hold ing an equity term, dismissing a judgment creditor’s bill.
Affirmed.
The Couet in its opinion stated the case as follows:
The appellants, John H. McDaniel and Leigh Chalmer’s, in this case are judgment creditors of Joseph W. Parish, one of the appellees, and as such judgment creditors they filed a bill against the judgment debtor and a certain Jonas H. McGowan, charging that a. certain dwelling house and premises in the city of Washington had been purchased with money belonging to Parish, the debtor*, and had been conveyed to McGowan, who held the same in secret trust, for the use and benefit of Parish, the debtor, and for the purpose of hindering, delaying and defrauding his creditors.
The bill called upon the defendants to answer the allegations fully and particularly, but expressly waived oaths to such answers. Parish and McGowan, however, both answered the bill under oath ; and they both expressly denied all fraud and collusion charged in the bill, and denied that the property had been purchased for Parish, or with his money. But they averred that the property had been purchased for the daughter of Parish, the debtor, and with her own personal means, earned by her laboi*, and that the property had been conveyed °to her by deed duly executed, by McGowan and wife.
Upon the disclosures made in these answers, the plaintiffs obtained leave and filed an amended bill, in which the daughter, Emily E. Parish, was made a codefendant with the two defendants named in the original bill. In this amended bill it is charged that the whole transaction, of the purchase and conveyance of the property, was a fraudulent scheme, devised and concocted by the defendants, to cheat and defraud the creditors of Parish, and that the name of the daughter was used as a shield and a blind to deceive and keep off the creditors of Parish, the real owner of the property: That the daughter had no estate or means of her own; and that the money paid on the purchase of the property was in truth the money of the debtor, received by him under certain acts of appropriation, passed b„y the Congress of the United States. It is also charged that the deed made by McGowan and wife to Emily E. Parish was never in fact delivered to the latter, and was never placed upon record, until after the institution of this suit.
By this amended bill, a full and particular answer, both to the original and amended bill, was required of the new defendant, Emily E. Parish, and also of McGowan to the amended bill, but no answer was required of the defendant Joseph W. Parish. The oath to the answers required by the amended bill was not waived, as were oaths to the answers to the original bill.
The defendant McGowan answered the amended bill, denying all fraud and collusion charged, and averred the right of property to be in the daughter of J. W. Parish, as in his former answer. He also answered the special matters charged in the amended bill, and explained the circumstances under which the property was purchased for and subsequently conveyed to the said Emily E. Parish.
The defendant Emily E. Parish answered under oath, and denied all fraud and collusion charged in both the original and amended bills, and set up and claimed right to the property in herself; and averred that it had been purchased with her own money, received from her father on account of services rendered by her, under a contract made with him for such services.
Replications were entered to the answers, and proof was taken, the principal witnesses being Emily E. Parish and J. H. McGowan, two of the defendants; the former of which being called and examined at great length by the plaintiffs, and the latter by and on behalf of the defendants.
The case was brought on to hearing before the chief justice of the Supreme Court of the District, and that learned justice, after argument and due consideration, passed an order dismissing the bill with cost. The plaintiffs have appealed.
Mr. J. J. Johnson and Mr. D. W. Baker for the appellant.
Mr. George C. Hazelton for the appellees.

Opinion:
Mr. Chief Justice Alvey
delivered the opinion of the Court:
The gravamen of the case is the alleged fraud and collusion of the defendants, in respect to the purchase and conveyance of the property in question. To overcome the effect of the deeds — the one from Gist to McGowan and the other from McGowan to Emily E. Parish — the onus of proof is, of course, upon the plaintiffs. Fraud is not to be presumed, nor can it be established except upon clear proof. It may, however, be established as well by circumstantial as by direct evidence. But if the form and design of the transaction assailed may be traced to an honest and legitimate source equally as to a corrupt and fraudulent one, the former should in all cases be preferred. Suspicious circumstances are not the equivalents of proof; and unless all the facts and circumstances of the case, when taken together, are strong enough to generate a clear rational conviction of the existence of the fraud charged, that conclusion ought not to be adopted which will destroy a prima facie good title to property, and blacken the characters of the parties concerned.
In this case, in the absence, as may be supposed, of other available proof, the plaintiffs ventured the experiment of calling the principal defendant, Emily E. Parish, as their witness. She was subjected to a most protracted and scrutinizing examination, running into great detail and much irrelevant matter. And while there are some apparent confusion and want of consistency, and, possibly, of full understanding, in some parts of her testimony, yet, when taken as a whole, and fairly construed, there is nothing in it, in my opinion, that justifies the conclusion that she was relating an entirely fabricated story, as she must have been, if the allegations of the plaintiffs are founded in fact.
According to the testimony of this witness, she earned the money with which the property was purchased, at the price of $6,500, under a contract with her father, made in 1875, when she was then but eighteen years of age. She was the only daughter, and her mother was an invalid, requiring attention herself, and was wholly unable to attend to the household affairs of the family. The daughter, as she testifies, had formed the plan of applying for an office in one of the Departments of the Government, and so informed her father, and requested his assistance. She was anxious to make an independent income for herself. This her father opposed, feeling that he could not dispense with her services in the management of his household, and in the care of his invalid wife. He proposed to her, she says, that if she would give up her plan of seeking an office, and remain in charge of his house, and take care of her mother, he would give or pay her $50 per month, and supply her with board and clothes, and this proposition was accepted by her; and that she remained continuously in the performance of that service until after she had attained the age of 35 years. There is no question in the case but that she did perform the services faithfully. This is shown by other testimony than her own. She swears, that on this claim for wages, running since 1875, her father paid her in 1886, out of money received under an appropriation by Congress, the sum of $5,000, which she placed in one of the banks of this city in her own name, where it remained for more than a year, and until she drew it out to pay to McGowan the sum of $4,500 on the property purchased for her; and that the further sum of $2,000 was paid by her father, out of another appropriation for his benefit, in 1889, to McGowan for her, and upon which last payment she obtained the deed from McGowan and wife.
The important, indeed, the controlling question in this case is, whether the statement of this witness, examined by the plaintiffs, with respect to the contract for services, and the payment of the money thereon bona fide, be credible or not? There is nothing to impeach the statement apart from the peculiar nature of the transaction itself; that is to say, there is no conflicting testimony upon the subject. McGowan in his testimony corroborates the statement of Miss Parish, as to the contract for service and the money due thereon, to the extent of saying that he had derived such knowledge from both the father and the daughter, and that the 'money paid to him for the property was money belonging to Miss Parish, earned by her under contract with her father. If such contract was in fact made, and the* money was paid thereon as stated, all the other portions of the transaction relating to the purchase and conveyance of the property are fully and clearly stated by McGowan in his testimony, and there is nothing incredible in it. He explains fully how and why it was that he purchased the property in his own name in the first instance, and took the conveyance to himself. In this there was nothing very remarkable, considering his friendly relation to the family, and particularly to the father. It was not unnatural that he should desire to aid and assist the daughter in her effort to purchase a home for herself and her parents, provided he could do so without incurring liability himself. And in the method adopted to accomplish this, there was nothing tending to impeach the transaction, except the failure to record the deed to the daughter, and this omission would seem to be reasonably explained. The whole case, therefore, turns upon the question, whether the money applied in the purchase of the property was that of the daughter, coming to her in the manner stated in the testimony, or that of the father invested under the fraudulent disguise of the name of the daughter, in order to deceive his creditors. It must be confessed the case is not free from difficulty and doubt, but in applying the cautious principles of the law, which presume in favor of honesty and against fraud, I am not able to conclude that the title set up in the daughter has no other foundation than a mere fraudulent and deceptive color, imparted to it by the form of a conveyance. See case of Gottlieb v. Thatcher, 151 U. S. 271, 278, 279.
It has been urged on behalf of the plaintiffs, as one of the grounds for imputing fraud, that at the time of the alleged contract made by the father for compensation to the daughter for services to be rendered, the latter was a minor, only eighteen years of age, and that the father was therefore legally entitled to her services, to say nothing of the filial duty of the child to serve her parents. But while this general principle is unquestionable, there is another principle equally well settled, and that is, that a parent may voluntarily relinquish the right to his child's earnings, and may permit the child to earn for itself, receive and appropriate its earnings at pleasure. He is under no legal obligation, though he be insolvent, to claim such earnings for the benefit of his creditors. Wilson v. McMillan, 62 Ga. 16 ; Atwood v. Holcomb, 39 Conn. 270 ; Wambold v. Vick, 50 Wis. 456. A father may emancipate his child, son or daughter, for the whole remaining period of minority, or for a shorter term, and this may be effected by instrument in writing, verbal agreement, or by implication from his conduct; and such emancipation is valid against the creditors of the parent. It is laid down as text law, by a recent writer of high repute, that " the minor who is released from his father's service stands, as to his contracts for labor with strangers or with him, upon the same footing as if he had arrived at full age; and such being the case, the father may himself contract to employ and pay the child for his services, and be bound in consequence like any stranger to fulfill his agreement." Schouler, Dom. Rel., Sec. 268, citing cases of Steel v. Steel, 12 Penn. St. 64 ; Hall v. Hall, 44 N. H. 293 ; Wright v. Dean, 79 Ind. 407.
It is also insisted, that even assuming that such contract was made, the compensation to be paid was excessive in amount and is evidence of fraud. Whether excessive or not, in view of the nature and extent of the services to be performed, is not the question that we have to determine in this case. The question here is, assuming the contract to have been made as testified to, whether the amount is so grossly excessive as to be evidence of fraud and combination to cheat the creditors of the father. Six hundred dollars per annum, besides board and clothes, may be regarded as high wages to be paid to a daughter for the care of an invalid mother, and the management of the household of the father, but I am entirely unable to say that it was so extravagant as to be evidence of fraud. If the contract was made in good faith, the parties were competent to make it, and it was binding upon them.
It has been strongly urged, as an evidence of fraud, that the father, Joseph W. Parish, has been in the possession of the property ever since it was purchased by McGowan, and that he has directed improvements thereon as if he were owner. This would, doubtless, be a fact of great weight, in the absence of explanation. But it has been explained, and there is nothing unreasonable in the fact that the parents should live in the house with the daughter, and the father direct repairs thereof, when without other home.
The fact that the deed from McGowan to Miss Parish was not placed upon record is regarded as evidence of fraud. All secret transactions naturally give rise to suspicion. But in this case, the grantee swears that she was not aware of the necessity or importance of having the deed recorded, and that no one advised her upon the subject; that she bundled up the deed and the contract and sent them to the office of McGowan to be placed in the safe, for safe preservation, where they remained until called for to be used in this suit. It is not pretended that the plaintiffs have been defrauded or prejudiced by the failure or delay in having the deed recorded; and a party cannot be charged with fraudulently secreting a deed by failing to place it upon record at the earliest moment. Shirras and others v. Craig and Mitchell, 7 Cranch, 34. The circumstance of unduly withholding a deed from record is undoubtedly indicative of a fraudulent design, but, like other facts, it may be explained, and all adverse inferences repelled.
Another circumstance has been strongly emphasized as furnishing ground for the presumption of fraud, and that is the failure of Joseph W. Parish to become a witness for his daughter. That such fact, under the circumstances of this case, furnishes ground for suspicion and adverse comment, is unquestionably true. What motive may have influenced the father thus to stand aloof and decline to add his testimony in support of his daughter's claim, it is difficult to conjecture. He had placed on file his answer to the original bill, under oath, wherein he denied all fraud and collusion charged, but that, under the rule of court, was not evidence for the defendants. Whether it was that he shrank from a probing into and a disclosure of his private affairs, or whether he was apprehensive that he would not be able to stand the ordeal of a rigid and searching cross-examination, are questions that are difficult to answer. We have, however, the testimony of the daughter and that of McGowan that cannot, without the risk of doing injustice, be discarded; and that being so, it would seem to be both inconsistent and unjust to impeach and annul the title of the daughter upon a presumption founded upon the unexplained conduct of the father. His failure to testify cannot be allowed the effect of impeaching and discrediting the testimony of other witnesses.
Upon careful examination of all the facts of the case, and after the best consideration that I have been able to give to the evidence produced, I am brought to the conclusion that the plaintiffs have failed in their proof to sustain, with reasonable certainty, the allegations upon which their right to relief is founded; that the charges of fraud and collusion, as against the daughter, are not sufficiently established to justify the court in declaring the deed to her void; and therefore the decree of the court below should be affirmed. Gumaer v. Colorado Oil Co., 152 U. S. 88, 93, 95. And such being the opinion of the majority of this court, it follows that the decree must be affirmed, with costs to the appellees.
Decree affirmed.