Case Name: C. E. Foster, et al., v. L. Elmer Thornton
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1937-09-16
Citations: 131 Fla. 277
Docket Number: 
Parties: C. E. Foster, et al., v. L. Elmer Thornton.
Judges: Ellis, C. J., and Terrell, J., concur.
Reporter: Florida Reports
Volume: 131
Pages: 277–305

Head Matter:
C. E. Foster, et al., v. L. Elmer Thornton.
179 So. 882.
Division A.
Opinion Filed September 16, 1937.
On Petition for Rehearing February 24, 1938.
Rehearing Denied March 30, 1938.
Montague Rosenberg, for Appellants;
Stockton, Ulmer & Murchison, for Appellee.

Opinion:
Buford, J.
On August 21, 1935, appellee filed his bill of complaint against appellant in which he alleged in effect that on June 23, 1932, plaintiff instituted a suit at common law against defendant C. E. Foster in the Circuit Court of Duval County on claim existing in favor of plaintiff against defendant.
Said cause came on to trial on January 30, 1933. A verdict was rendered against the defendant in favor of plaintiff in the sum of $5,000 and on Febraury 3, 1933, a judgment was entered in favor of plaintiff against defendant in the sum of $5,000.00 and costs.
Writ of error was taken to the Supreme Court and on April 8, 1935, the mandate of the Supreme Court of Florida was filed in said Court setting aside and reversing the judgment.
On June 3, 1935, the cause came on for trial and a verdict was rendered in favor of plaintiff and against defendant in the sum of $20,670.00. That on the sixth day of June judgment was rendered on said verdict in the sum of $20,670.00 with costs.
Thereafter, on consideration of motion for new trial, the Court entered an order to the effect that if the plaintiff would enter a remittitur in the sum of $10,000.00, motion for new trial would be denied; that the remittitur was duly entered and thereupon new trial was denied. On August 3, 1935, an amended judgment was entered for $10,670.00 and costs.
That at the time of the institution of the suit Foster was the owner of and seized and possessed of certain real property in the City of Jacksonville, Duval County, Florida, described in the bill of complaint. That while said claim was still in existence and unpaid and while said suit was being prosecuted, and just a few days prior to the date upon which said suit was set for trial, January 30, 1933, defendant C. E. Foster executed and delivered to his wife, Lilliam M. Foster, certain deeds purporting to convey tO' the said Lilliam M. Foster, certain property described in the bill of complaint then owned by C. E. Foster. That the defendant, Lilliam F. Foster, had not transferred or in any manner alienated said described property thus attempted to be conveyed to her and that the same then stood in her name on the public records of said county.
That Lilliam M. Foster was at the time of the attempted conveyance the wife of the said defendant, C. E. Foster, and upon information and belief avers the fact to be that the said deeds and each of them were given to the defendant, Lilliam M. Foster, without anything of value and without any valuable consideration moving to C. E. Foster and that said attempted conveyances were in fact gratuitous and voluntary; that each of said deeds was made, executed and contrived of fraud, covin, collusion and guile to the end of purpose and intent to delay, hinder, embarrass and defraud plaintiff of his just and lawful claim against the defendant, C. E. Foster.
That C. E. Foster did not have at the time of the aforesaid conveyances, or at any time since, other property sufficient to satisfy plaintiff's judgment and that the judgment is a lien upon the above described lands attempted to be fraudulently conveyed by Foster as alleged. That said deeds constitute a cloud on and obstruction to full and fair enforcement of the lien, which cloud and obstruction plaintiff is entitled to have removed.
That upon information and belief, plaintiff allegees the fact to me that notwithstanding the purported conveyances from defendant C. E. Foster to Lilliam M. Foster, his wife, C. E. Foster has retained dominion control over said property and is managing same and collecting rents therefrom. The described pieces of property have improvements thereon and that much of said property is being rented by the said defendant, C. E. Foster. That the income from said property is being dissipated by defendant and is not being applied upon indebtedness due plaintiff by virtue of said judgment; that the property when sold at forced sale would not bring sufficient to satisfy plaintiff's judgment. That Foster does not own sufficient property with which to satisfy the judgment. That the taxes are not being paid on the property; that the property is deterio rating and that the defendant is not preventing said deterioration by maintaining said property in good and substantial repair and by reason thereof plaintiff's rights are being continuously fraudulently prejudiced. Other allegations are immaterial here.
Defendant Foster admitted the judgment had been obtained against him as alleged, but says that the judgment was for alleged malpractice by the defendant. Other allegations in regard to the judgment are made which are immaterial now.
The answer then averred:
"Answering paragraph numbered two of said Bill of Complaint this Defendant denies that at the time of the institution of said suit that this defendant was the owner of said property; this defendant says that said property herein referred to was property owned by the wife of the defendant, Lilliam M. Foster, purchased with her own separate funds which she inherited from her father's estate; that the proceeds of his said wife's inheritance was delivered to this defendant to> manage for his said wife, that all of said property referred to in said paragraph was actually bona fide owned and paid for by the wife of this defendant with her own funds and the increment and increase thereof of said properties; that said properties were purchased solely with the funds of the defendant's said wife, Lilliam M. Foster, and managed for her by this defendant, her husband, and title thereto was taken in the name of this defendant merely to facilitate the handling and management of said property for his said wife; that for some time prior to the dates mentioned in said paragraph his said wife had often requested him to convey her said property so that title might be taken in her name where it rightfully belonged in the event of any difficulty; that in order to meet said request this defendant on or about the 21st of January, A. D. 1933, conveyed all of said property that was in his name and unincumbered to his said wife in order to vest record title in her, where it belonged. That this defendant, C. E. Foster, is the owner of other property of record in which this defendant has a substantial equity in the equitable real value thereof, of several thousands of dollars."
The answer then denied that the deeds were given to the defendant, Lilliam M. Foster, without anything of value and without any valuable consideration moving to C. E. Foster and denies that said attempted conveyances were in fact gratuitous or voluntary and denies that each of said attempted conveyances or any of them, were made and executed and/or contrived of fraud, covin, collusion and guile and to the end, purpose and intention to delay, hinder, embarrass and defend plaintiff, and alleges: "that said conveyances were made and taken in good faith and for a valuable consideration as more particularly appears from the allegations of the above and foregoing paragraph of this answer, specific reference whereof is hereby prayed and this defendant herein re-alleges and re-avers the allegations of said above paragraph as fully as if set out herein in extenso."
The answer then denied that the judgment is a lien upon the lands described and denies that the deeds constituted clouds or obstruction to the full and fair enforcement of plaintiff's judgment lien and denies that said deeds constitute any cloud or obstruction which' plaintiff is entitled to have removed. It then re-avers and re-alleges the averments contained in paragraphs 2 and 3 of the answer. The remaining allegations of the answer are not important here.
The answer of Lilliam M. Foster contains like allegations as those contained in'the answer of C. E. Foster.
Under the issues presented order of reference was made containing the following:
"It is, therefor, ordered, adjudged and decreed that Herbert Lams on, Esquire, a practicing solicitor of this Court be, and he is appointed Special Master of this Court to take the testimony that may be produced and offered by the parties to this cause, and to report the same, together with his findings of law and fact, to this Court with all convenient speed.
"It is further ordered that the time for taking testimony shall expire at midnight on the 14th day of February, A. D. 1936."
Testimony was taken in which report the Master found:
"3. That at the time of the institution of the said common law suit against the said defendant, C. E. Foster, the said C. E. Foster held title in his own name exclusively to those certain pieces, parcels or tracts of land situate, lying and being, in the County of Duval and State of Florida, particularly described in Exhibit 'A' attached to the bill of complaint in this cause, and particularly described in those certain deeds that have been offered in evidence in this cause as plaintiff's Exhibits 3 to 11, both inclusive, that said defendant, C. E. Foster, continued to hold title to said pieces of property in his name during the pendency of said common law suit, up to the dates of the several deeds that have been offered in evidence in this cause as plaintiff's Exhibits 2 to 11, both inclusive; and that while said common law suit was pending in the Circuit Court of Duval County, Florida, but before the entry of the judgment in said suit aforesaid, the said defendant, C. E. Foster, joined by his wife, Lilliam M. Foster, made, executed and deliv ered tp the said Lillian M. Foster the several deeds described in Exhibit 'A' attached to the bill of compalint in this cause, as more fully appears from certified copies of said several deeds, which have been filed in evidence in this cause as plaintiff's Exhibits 2 to 11, both inclusive; and that at the time of the execution and delivery of the said several deeds, certified copies of which have been filed herein as plaintiff's Exhibits 2 to 11, both inclusive, the said defendant Lilliam M. Foster was the wife of the said defendant C. E. Foster.
"4. That the several pieces of property described in Exhibit 'A' attached to the bill of complaint in this cause, and more particularly described in plaintiff's Exhibits 2 to 11, inclusive, which have been filed in evidence herein, were acquired by the said defendant C. E. Foster with money part of which was entrusted to him by his wife, the said Lillian M. Foster, and part of which was money belonging to the said defendant C. E. Foster; that it is impossible from the evidence in this cause to tell exactly what portion of the funds used in purchasing said various pieces of property belonged to the defendant, Lillian M. Foster, and wha't portion of said funds belonged to the said defendant, C. E. Foster; that it appears from the evidence in this cause that on or about October 5, 1910, the defendant, Lillian M. Foster, turned over to her husband, the defendant, C. E. Foster, the sum of $1405.00 which sum of $1405.00 came to the said defendant Lillian M. Foster through inheritance from her father; that the defendant Lillian M. Foster, when she turned over to her husband, the defendant, C. E. Foster, the said sum of $1405.00 gave him the privilege of putting it in a home that they expected to buy and subsequently did buy, at 200 Jones Street, Valdosta, Georgia; that the defendant, C. E. Foster, put with the said $1405.00 approximately $80.00 of his own money and purchased about the year 1910 the said property at 200 Jones Street, Valdosta, Georgia; that the defendant Lillian M. Foster turned over said sum of $1405.00 of her own money to the defendant C. E. Foster at the time aforesaid without taking any written evidence of indebtedness from the said C. E. Foster and without taking any written evidence of the receipt by the said C. E. Foster of the said sum of $1405.00, or of any other sum; and that from that time until the dates of the several conveyances shown by plaintiff's Exhibits 2 to 11, inclusive, in the year 1933, the defendant Lillian M. Foster allowed and permitted the defendant C. E. Foster under a mere verbal understanding between them, to hold and invest and reinvest, as he saw fit, the said sum of $1405.00 and the proceeds of the investment thereof, and that said Lillian M. Foster, during all of said period of time from October 5, 1910, down to the dates of the several conveyances shown by plaintiff's Exhibits 2 to 11, inclusive, filed in this cause, permitted the said defendant C. E. Foster, to hold title to all investments in which said sum was included in his own name, and permitted him during said period to manage and control exclusively the said sum of money, and all investments and reinvestments thereof, and all property in which said sum of money was invested, and to handle the same as if it were his own property.
"5. That it further appears from the evidence in this cause' that the property at 200 Jones Street, Valdosta, Georgia, so purchased by the defendant C. E. Foster and Lillian M. Foster his wife, wasi sold by them in April of 1915, for the sum of $3,000.00 cash; that the defendant Lillian M. Foster permitted the defendant C. E. Foster to retain in his name, possession and control the said sum of $3,000.00 so obtained from the sale of said Valdosta property, and also permitted him to retain in his name, possession and control approximately $675.00 rents that had been paid by tenants of the said Valdosta property, and that he subsequently invested the said sum of $3,000.00, plus the said sum of $675.00 rents, or a total of $3,675.00, in real estate in Jacksonville, Duval County, Florida, taking title to such real estate in his own name exclusively; that the first investment he so made out of the proceeds of the sale and rents of the Valdosta property was the purchase by him, the said C. E. Foster, in 1915, of lots 22 and 23, in block 6, of New Riverside, Jacksonville, Florida, that the next piece of property purchased by the defendant, C. E. Foster, was the property at 413 East Adams Street, Jacksonville, Florida, which he purchased and title to which he took in his own name in December, 1916; that in acquiring this property at 413 East Adams Street, Jacksonville, Florida, the defendant, C. E. Foster, paid for the same partly out of the money so entrusted to him by his wife, Lillian M. Foster, partly with money belonging to him individually, and partly with money borrowed by him from the American Trust Company, Jacksonville, Florida, and partly by the rents from said property at 413 East Adams Street, Jacksonville, Florida; that subsequently, over the period from December, 1916, and before the year 1933, the said defendant C. E. Foster, acquired the other pieces of property mentioned and described in Exhibit 'A' attached to the bill of complaint in this cause and in the plaintiff's Exhibit 2 to 11, inclusive, filed herein, in addition to the specific pieces of property hereinabove already mentioned, and that the said defendant, C. E. Foster, in acquiring the said property., took title thereto in his own name exclusively, and in purchasing and acquiring said property he used part of. the money so originally entrusted to him by his wife, Lillian M. Foster, part of his own money, and part of the rentals and earnings and income from certain of the pieces of property so acquired by him.
"6. That the defendant, C. E. Foster, in his testimony on pages 46 and 47 of the record in this cause, testified that he made the several conveyances of property set forth and shown by plaintiff's Exhibits 2 to 11, both inclusive, filed herein, to his wife, the defendant Lillian M. Foster, in the year 1933, because her money was invested in these properties, and she wanted her money protected against the judgment, copy of which has been filed in evidence as Plaintiff's Exhibit'No. 1, and because it was her property and procured or purchased with money he had used for her, or acting as her agent, and she suggested that they do something for her protection, and they decided that was the best way to protect it, to convey the property purchased by her money.
"7. That the defendant C. E. Foster and the defendant Lillian M. Foster are husband and wife and were married to each other about the year 1906; and that during all of the transactions involved in this suit they, the said C. E. Foster and the said Lillian M. Foster were husband and wife.
"8. That since the said several conveyances set forth and shown by plaintiff's Exhibits 2 to 11, both inclusive, that have been filed in evidence in this cause, the said defendant, C. E. Foster, has continued to handle said pieces of property, and has continued to collect the rents therefrom and pay the taxes and upkeep thereon and has otherwise continued to handle the property in the same manner that he handled it while title to said pieces of property stood in his own name."
The Master then finds as a matter of fact and law, the following:
"9. That the defendant C. E. Foster did not have at the time the conveyances set forth and shown in plaintiff's Exhibit 2 to 11, both inclusive, nor has he since had, other property sufficient to satisfy plaintiff's judgment; that the conveyances set forth and shown by plaintiff's Exhibits 2 to 11, both inclusive, were when made, and have continued to be, and now are, fraudulent and null and void as against the claim of the plaintiff under the judgment obtained by plaintiff against the defendant C. E. Foster, as more particularly appears from certified copy of such judgment which has been filed in this cause as plaintiff's Exhibit No. 1; that said judgment is a lien on the property described in plaintiff's Exhibits 2 to 11, both inclusive, filed herein, and that said deeds namely, plaintiff's Exhibits 2 to 11, both inclusive, filed herein, constitute clouds on, and obstructions to, the full and fair enforcement of plaintiff's judgment thereon, which clouds and obstructions plaintiff is entitled to have removed."
It is shown by the records of this Court and admitted at the bar of this Court in this case that the judgment referred to in the pleadings resulted as the prosecution of a tort action by Thornton against Dr. Foster for damages resulting to Thornton by reason of the death of his wife which was alleged to have been caused by the negligence of the defendant Foster in the performance of a chiropractic adjustment. Therefore, in this case the question of credit being extended to Foster upon his apparent ownership of the property is not involved. If Foster had owned the property in his own right and had transferred and conveyed it to his wife without consideration for the purpose of hindering and delaying the tort claimant in the collec tion of a judgment which he might recover against Foster, then the conveyances would have been voidable as being in fraud of creditors. But that rule does not apply to cases where a tort feasor holds title to land in trust for another and makes a conveyance to the cestui que trust, the owner of the beneficial interest in the property, before the entry of judgment against him.
The findings of the Master were approved annd confirmed by the Chancellor.
Under the findings of fact by the'Master and as approved" by the Chancellor, the applicable law impressed a resulting trust on the conveyances of the described parcels of land in favor of Lillian M. Foster, and; Foster, in taking title to the lands, took title as Trustee for Lilliam M. Foster and when he conveyed the record title to her he did that which under the facts found by the Master, approved by the Chancellor and supported by the record, equity would have required him to do.
This is true, although a part of the funds which paid for the lands were the private funds of G. E. Foster.
The record shows that Mrs. Foster in November, 1910, delivered to Dr. Foster $1405.00 and authorized him at the time to invest it for her in a certain piece of property in Valdosta, Georgia, that Dr. Foster added to this sum $90.00 of his own money and bought that property, taking title thereto in his own name. That afterwards that property was sold; that Mrs. Foster allowed Dr. Foster to retain the proceeds of that sale, plus $675.00 rents-which had been received for rental of the Valdosta property, and that he subsequently invested that money in real estate in Jacksonville, Duval County, Florida, taking title to such real estate in his own name exclusively.
It appears to be well settled that "in. order to create a resulting trust in favor of a wife, it is not indispensable that the whole of the consideration should have been furnished by her and where any portion of the consideration belongs to the wife and title is taken in the husband's name alone there is no presumption of an advancement and a resulting trust arises in her favor by implication of law to the extent that consideration furnished by her is used, although he may have given his own notes for deferred payments." See 65 C. J. 414.
It is elementary that if a Trustee so commingles his funds with the funds of his cestui que trust that he can not definitely show what part of the fund was his and what part of the fund belonged to his cestui que trust, and the cestui que trust happens to be his wife, the funds con-contributed by him towards such investment will be presumed to be a gift to the wife and property purchased with such funds will be held in trust by him for the benefit of the wife.
Under the facts in this case the tort claimant can enforce no claim of higher dignity against the property than that which Dr. Foster himself could have enforced against the property.
In Haney v. Legg, 129 Ala. 619, 30 Sou. 34, it was held: "Where a husband purchases land with money which is a part of the wife's separate estate, and takes a deed in his own name, a trust results to the wife in such lands, which may be proven by parol; and it is not indispensable to the establishment of such trust that the whole of.the purchase money should have been paid wtih the funds of the wife; but, if any portion of the purchase money belonged to the wife, a resulting trust arises in her favor to the extent of the sum so used."
To the same effect is Johnson v. Foust, 138 Iowa 195, 139 N. W. 451; and in Kline v. Ragland, 47 Ark. 111, 14 S. W. 474.
In Hinshaw v. Russell, 180 Ill. 235, 117 N. E. 406, it was held:
"Where a wife pays part of the purchase price on land bought by her husband,' a resulting trust arises from the act, and not from any agreement that the husband was a trustee for the wife."
"Although where a man pays for land and causes it to be conveyed to his wife or child it is presumed to be a gift, such is not true where the wife pays for land conveyed to her husband and where the proceeds of a wife's separate estate is used by a husband to purchase land, in the absence of other agreement, there is a resulting trust in the wife."-
See also Skehill v. Abbott, 184 Mass. 145, 68 N. E. 37.
In Murchison v. Bogleman, 165 N. C. 397, 81 S. E. 627, it was held:
"Where the purchase money for land was paid in part by a husband and in part by a wife, but the deed taken in the name of the husband, a resulting trust arose in favor of the wife, and she could thereafter demand a conveyance jointly to herself and husband and have the deed reformed, the effect of which would be to create an estate by the entireties."
In Central National Bank of Baltimore v. Connecticut Mutual Life Insurance Co., 104 U. S. 54, 26 L. Ed. 693, it was held: -
"That, so long as trust property can be traced and followed into other property into which it has been converted, the latter remains subject to the trust, and that if a man mixes trust funds with his own, the whole will be treated as the trust property, except so far as he may be able to distinguish what is his own, are established doctrines of equity and apply in every case of a trust relation, and to moneys deposited in a bank account, and the debt thereby created, as well as to every other description of property."
In Atkinson v. Ward, 47 Ark. 533, 2 S. W. 77, it was held:
"In such a case, if the agent mingle funds of his own with those of his principal, he must disclose the amount of his funds, or his principal will take the whole."
In Byrom v. Gunn, et al., 102 Gla. 565, 31 S. E. 560, it was held:
"Where a husband mingled funds of his own, funds belonging to his wife, and funds belonging to a ward, and indiscriminately used the same in diverse real estate transactions, in the course of which he made numerous purchases, sales and reinvestments, sometimes taking title to property thus bought in his own name, and at other times in his name as trustee for the wife, and where, as an outcome of all these operations, it finally resulted that she obtained against him, in an equitable proceeding in which the ward was not represented, a judgment establishing in the wife, as against the husband, the title to a considerable amount of realty, consisting of various separate parcels, titles to which he had taken both of the ways above indicated, and into which as a whole the funds of the ward were traceable, though it was impossible to ascertain how much of any of the three funds went into any particular parcel, and where in the above mentioned transactions, which took place prior to the rendition of such judgment, the husband was acting as agent for the wife and he and she collusively procured that judgment to be rendered for the purpose of hindering, delaying or defrauding his cfed itors, held: (a) that the act of the husband in intermingling the various funds referred to was, in law, the act of the wife, so far as concerned the rights of the wards, (b) That such judgment, though binding and conclusive between the husband and wife, was not so as to the ward, (c) That, under the facts recited, all of the property covered by such judgment, including not only that to which the husband took titles in his own name, but also that to which he took titles as trustee for his wife, could lawfully be subjected to the satisfaction of the ward's claim against him, in so far as the same rested upon the misappropriation of the ward's money in the manner above stated."
In Farmers' Bank of Whiteplains, et al., v. Bailey, et al., 222 Ky. 55, 297 S. W. 938, it was held:
"A'Vhere trust money is mingled with money of the trustee the cestui que trust is entitled to a priority of right against the entire fund over the claims of the other creditors."
For the reasons stated, the decree should be reversed with directions that the bill be dismissed.
It is so ordered.
Ellis, C. J., and Terrell, J., concur.
AVhitfield, P. J., and Chatman, J., concur in the opinion and judgment.
Brown, J., dissents.