Court Opinion

ID: 3522875
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:35:03.880286+00
Date Added: 2024-06-11T14:19:54.117537
License: Public Domain

This case is here on certification of the Springfield Court of Appeals, because that court deemed its decision in conflict with the ruling of the Kansas City Court of Appeals in Brewing Company v. Steckman, 180 Mo. App. 320. The suit is in the nature of a creditor's bill seeking to set aside the transfer of a promissory note by C.C. Clingan, deceased, to Mrs. R.M. (Inez) Lillibridge.
C.C. Clingan died at Willow Springs, Missouri, in January, 1922. The defendant, Mrs. R.M. Lillibridge, was his daughter, R.M. Lillibridge her husband, and the other defendants his remaining children.
At the time of his death C.C. Clingan was indebted to the Bank of Willow Springs on several promissory notes aggregating $2411. He had been the owner of a tract of land consisting of ten acres in Howell County, described in the petition. On June 8, 1920, he conveyed that land to the defendants, Mrs. R.M. Lillibridge and her husband, for a consideration of $3250, of which consideration one thousand dollars was paid at the time of the conveyance, and the balance of $2250 was evidenced by a promissory note executed by Mrs. R.M. Lillibridge and her husband. Afterwards the Lillibridges paid part of the note until the balance due was $1400. It is mentioned as the $1400 note. Prior to his death in January, 1922, C.C. Clingan had been living with his daughter Mrs. Lillibridge, and was cared for by her throughout his last illness. Before his death he marked the note "paid" and delivered it to her for such care and attention. At the time the note was delivered to Mrs. Lillibridge, she had not rendered services equal to $1400, but the consideration included her care of him for the rest of his life. *Page 973 
At that time the debt due by C.C. Clingan to the bank was unpaid, and the transfer of the note to Mrs. Lillibridge rendered him insolvent. After his death those notes to the bank were allowed against his estate in the probate court, where administration was had. There was no property belonging to the estate with which to satisfy the claims.
The trial court found that at the time of the transfer of the $1400 note by Clingan to his daughter she had rendered services worth $600; that the balance of $800 was a transfer made for services to be thereafter rendered; that such transfer was voluntary, and void as to existing creditors. The judgment was that the Bank of Willow Springs recovered against Mrs. Lillibridge and her husband and the other defendants, the heirs of C.C. Clingan, the sum of $800, and that Mrs. Lillibridge recovered against the estate of C.C. Clingan the sum of $600; that the judgment be a special lien upon the real estate mentioned above, and that the same be sold for the payment of said judgment and costs. This seems to be on the theory that, the note being for part of the purchase price, the holders of the same should have a vendor's lien on the property sold by Clingan to his daughter. No question is raised as to the form of the judgment, if in fact the circuit court had jurisdiction of the cause.
Upon the death of C.C. Clingan, and before this suit was brought, R.F. Holloway was appointed administrator of his estate. He filed an affidavit in the probate court alleging that R.M. Lillibridge and his wife wrongfully had possession of certain property belonging to the estate of C.C. Clingan, and prayed that they might be ordered to appear and answer under oath the questions that might be put to them concerning the same, the purpose being to discover the ownership of the $1400 note.
Interrogatories were propounded and answered by Mrs. Lillibridge. The probate court thereupon tried the issues before a jury, which found that the defendants were not guilty of wrongfully withholding any assets belonging to the estate. Judgment accordingly was rendered June 2, 1922, in the probate court. That judgment was unappealed from. Subsequently this suit was brought, and R.M. Holloway, administrator, was made party plaintiff with the Willow Springs Bank. Afterwards the cause was dismissed as to Holloway, and the cases proceeded to judgment with the bank as the only plaintiff.
It is claimed by the appellant that the proceeding in the probate court is res adjudicata as to the matter involved here, and that the plaintiff bank, while not a party to that proceeding, was represented by the same attorneys who appear in this case, and therefore is estopped to question the validity of the judgment therein. It is further urged that the probate court alone had jurisdiction of the matter *Page 974 
involved in a proceeding to discover assets concealed or withheld from the estate.
I. The appellant claims that the circuit court had no jurisdiction of the subject-matter of this action, and that the proper proceeding was that undertaken and carried through by the probate court under Section 62, Revised Statutes 1919, where the executor, administrator, or other personJurisdiction.  interested in any estate might start a proceeding in the probate court on a showing that some person "has concealed or embezzled, or is otherwise wrongfully withholding any goods, chattels, money, books, papers or evidences of debt of the deceased."
In support of that position the appellant cites, among other cases, Clinton v. Clinton, 223 Mo. 371, and Brewing Co. v. Steckman, 180 Mo. App. 320. The opinion in the Clinton case reviews and adopts an opinion by Judge GOODE in In re Estate of Huffman, 132 Mo. App. 44. The Huffman case and the Clinton case, therefore, taken together, announce the rule contended for by appellant as strongly as it may be put. In a proceeding to discover assets the probate court has jurisdiction to try the issues raised, and in doing so may determine the title to the property alleged to be withheld. If the person against whom the proceeding is instituted claims the title to the property by gift of the deceased, or otherwise, the probate court has jurisdiction to try the title.
It is a general rule that a probate court has no equitable jurisdiction, no jurisdiction to try issues which are purely equitable in their nature, and where the relief demanded is equitable.
In State ex rel. v. Shackelford, 263 Mo. l.c. 63, quoting from State ex rel. v. Bird, 253 Mo. l.c. 580, it was said: "While the rule announced in the two cases last cited is undoubtedly sound law, I am not willing to concede that a probate court has jurisdiction to entertain a suit or proceeding, the sole basis of which is a demand for equitable relief, even though such relief should incidentally pertain to some matter of probate jurisdiction."
Numerous cases are cited by respondent to the effect that the probate court has no jurisdiction of strictly equitable issues.
II. It seems to be conceded that a transfer of property for services to be rendered in the future isRes Adjudicata:    voluntary and void or voidable as to existingEquitable Issues.  creditors. The relief prayed in the petition is general, and may include the relief granted.
The relief as actually granted by the trial court was not only a cancellation of the transfer by Clingan to his daughter, but was the segregation of that portion of the indebtedness of Mrs. Lillibridge to her father which she had earned. The court adjudged that she *Page 975 
was entitled to a judgment against the estate for $600, and that the plaintiff was entitled to a judgment against the estate for $800. This dual judgment was made a lien upon the property for the purchase price of which the indebtedness was part of the consideration. The Lillibridges owed the estate $1400, unpaid, for the purchase price of the land which they bought. Of that $1400, $600 was due to Mrs. Lillibridge, and the remaining $800 was due to plaintiff bank, and they were to share proportionately in the lien established against the land. This relief was purely equitable. It could not be determined by a court at law. Two cases decided by the Springfield Court of Appeals, Kerwin v. Kerwin, 204 S.W. 922, and 204 S.W. 925, illustrate the distinction. Both cases arose on the same issues and have the same title. The first case (page 922) was brought by the plaintiff as administratrix of her husband's estate, complaining that her husband, shortly before his death, made an assignment of certain personal property for the purpose of depriving her of her marital rights in the property. She sought to have that property restored to the estate. Judge STURGIS, in writing the opinion, held that the circuit court had no jurisdiction of the cause, because she was seeking, as administratrix, to discover assets.
The other case she brought as an individual, claiming that her husband had disposed of certain personal property in order to defraud her of her dower and marital rights, which disposition was in contemplation of death. There was a judgment for the plaintiff, which was affirmed by the Court of Appeals, holding that the circuit court had jurisdiction of the case.
Those cases clearly illustrate the point at issue here. If nothing had been in issue except the retention of the property by the alleged donee under a title by gift, the probate court would have had jurisdiction in a proceeding to discover assets. The question would have been whether in fact there was a bona-fide gift. However, there was no doubt about the gift or the formal sufficiency of the transaction. It was sufficient to pass the title as between the parties. But the transaction was in fraud of the plaintiff's rights, and it was necessary for a court of equity to intervene in order to set aside the transaction.
So, in this case, if it were merely a question of title between the estate of Clingan and his daughter, as to this note, the probate court would have had jurisdiction to proceed to discover assets, because it would have been purely a question of law whether in fact there was a transfer and a surrender of the note marked "paid." But that fact was not questioned. It was conceded that Clingan did transfer the note to her and mark it paid in satisfaction of the debt. As between them it was a valid transaction. It then ceased to be a question of law, and a purely legal proceeding could not reach it. It was *Page 976 
necessary for a court of equity to intervene and set aside that transfer as in fraud of creditors. [Walther v. Null, 233 Mo. l.c. 123; Massey v. McCoy, 79 Mo. App. 173; Merry v. Fremon,44 Mo. 518.]
The defendants offered evidence to show that the attorneys for the plaintiff bank were also attorneys representing the administrator when he brought the proceeding in the probate court to discover assets, and that the bank therefore was represented in that case and concluded by that judgment. Since the probate court had no jurisdiction to entertain the case nor to render such judgment, it was not conclusive on anybody. Such evidence was irrelevant and properly excluded.
III. Another aspect of the case shows the probate court had no jurisdiction. The arrangement whereby Clingan canceled his daughter's debt to him was in fraud of creditors. And only creditors had a right to attack the transaction. [27 C.J. 470.] Neither the administrator nor the heirs could bringParties.  action to set aside or cancel a fraudulent transaction of the intestate ancestor. [Merry v. Fremon, supra; Hayes v. Fry, 110 Mo. App. l.c. 24; Zoll v. Soper, 75 Mo. 462.] In the Soper case this language is used: "An administrator cannot impeach a voluntary conveyance of his intestate for fraud as to creditors, although the estate may be insolvent."
[Brown's Administrator v. Finley, 18 Mo. 375; Chester Co. Trust Co. v. Pugh, 50 L.R.A. (N.S.) l.c. 323.] The doctrine is general. A voluntary transfer of any kind is good between the parties. Mrs. Lillibridge could not question the propriety of the transaction to which she was a party. The deceased himself, if living could not have attacked for fraud his own act. It is the well established rule that one cannot annul his own contract on the ground that he committed fraud in entering it.
It may be urged that the administrator in this case, Mr. Holloway, represented the creditors as well as the heirs and distributees, and therefore he could recover property for the estate, which his intestate had fraudulently transferred. That is a misapprehension of his function. It is his duty to preserve and collect the estate for the benefit of all personsAdministrator:  interested in it. And in that general sense heRepresentative  represents all who are interested in it, but heof Creditors.   does not represent the creditors as against the estate. On the contrary he represents the estate as against the creditors where there is a contest between them. But even if he did represent the creditors he could not maintain a purely equitable action in a proceeding to discover assets. If the estate has been defrauded of assets by other persons, and a recovery of such assets must be had by an equitable proceeding, he must proceed in the circuit court.
IV. The judgment is personal in favor of the plaintiff bank, not only against Mrs. Lillibridge and her husband, but against the other *Page 977 
heirs of the decedent C.C. Clingan. The other heirs were not personally liable for the debt; though they wereJudgment.  proper parties to the proceeding as heirs and distributees of the estate. These other heirs claim no interest whatever in the land which the plaintiff seeks to charge with the debt. The judgment should have been against the Lillibridge alone. Whether it should be made a special lien against the land seems unimportant because it is a lien as a general judgment. The affidavit for and the order granting the appeal seem to include all the defendants.
The judgment is affirmed as to the defendants Inez Lillibridge and R.M. Lillibridge, and reversed as to the remaining defendants. All concur.