Spalding v. Spalding

This action was commenced by the plaintiff against defendant John B. Spalding and his parents, T. B. Spalding and Dora M. Spalding. Both of the parents died prior to the entry of judgment and their executors were substituted as parties defendant. The pleadings, findings, and judgment cover 288- pages of the printed transcript. A general statement of the case will be taken from the findings and only such parts of the pleadings will be set out as are necessary to an intelligible discussion of the questions raised by the appeal.

■ The court found that plaintiff was married to defendant John B. Spalding, December 25, 1894; that the issue of the marriage is one child, a daughter; that June 3, 1904, plaintiff filed in the circuit court of Kenosha County, Wisconsin, her petition for a divorce from said defendant; that he was personally served with process in the action and appeared therein in person and by attorney; that judgment therein was entered July 12, 1904, granting plaintiff a divorce and requiring said defendant to pay plaintiff certain sums as alimony and for the maintenance of the child of the parties; that the judgment for alimony and maintenance was modified from time to time by said circuit court; that on the sixteenth day of December, 1918, the plaintiff filed her petition in said court and cause praying for a division of the property of said defendant; that said defendant “entered his general appearance in said cause and by his attorneys filed an answer to the merits of plaintiff’s said petition”; that a trial of the issues raised by said petition and answer was had and said circuit court entered judgment and decree ordering said defendant forthwith to pay plaintiff the aggregate sum of $30,016.60 and in full satisfaction thereof, “within five days from the date of said judgment and decree to

“That defendant, John B. Spalding, on or about September 1, 1906, conceived the fraudulent scheme and intention of hindering, delaying and defrauding plaintiff of all rights, demands, claims and causes of action accruing and to accrue to plaintiff against said defendant, John B. Spalding, under said judgment of July 12, 1904, entered by said Circuit Court of Kenosha County, Wisconsin, and such amendments as might subsequently be made thereto; and in pursuance of said fraudulent scheme, intent and purpose, and with the actual knowledge of and participation therein by defendants, T. B. Spalding and Dora M. Spalding, parents of defendant, John B. Spalding, defendant John B. Spalding, between May 1st, 1909, and July 1st, 1915, and while defendant John B. Spalding was insolvent, and without consideration, transferred and delivered to the defendants, T. B. Spalding and Dora M. Spalding, large sums of money, to wit: thousands of dollars, which said moneys were transferred and delivered as aforesaid, to be used, and which were used, in the part payment of the purchase price of certain hereinafter described real estate, and for the payment of certain hereinafter mentioned mortgage notes evidencing money borrowed and used in the payment of part of the purchase price of 'the said property, and for improvements thereon; . . . that the total amount of money so expended by and through the said T. B. Spalding and Dora M. Spalding for the purchase of the said property and for improvements thereon as hereinabove set forth, was fifteen thousand (15,000) dollars; and that the total amount of money given, transferred and delivered to T. B. Spalding and Dora M. Spalding by the defendant John B. Spalding in pursuance of said fraudulent

scheme, intent and purpose of defrauding plaintiff, Mattie J. Spalding, as aforesaid, and with the knowledge of and participation therein by defendants T. B. Spalding and Dora M. Spalding, as hereinabove set forth, and in the manner hereinbefore stated in this paragraph, was the sum of seven thousand five hundred (7,500) dollars; and that the said seven thousand five hundred (7,500) dollars so paid, transferred and delivered by the said John B. Spalding to the said T. B. Spalding and Dora M. Spalding, in the manner and for the purposes hereinabove set forth, constituted and amounted to one-half of the total amount of money so expended by and through the said T. B. Spalding and Dora M. Spalding for the purchase of the said real property and the improvement thereon as here-above set forth”; that the present value of said real estate is $26,000; “That on the 20th day of May, 1917, defendants T. B. Spalding and Dora M. Spalding, executed and delivered their deed of grant, bargain and sale, under seal, for a recited money consideration, conveying said real estate to the defendant, John B. Spalding. And that thereafter on the 20th day of May, 1917, defendant, John B. Spalding, in the furtherance of his fraudulent scheme, intention and purpose to defraud the plaintiff, Mattie J. Spalding, as aforesaid, and with the actual knowledge and acquiescence thereof and participation therein by defendants T. B. Spalding and Dora M. Spalding, executed and delivered his deed of grant, bargain and sale, attempting to convey said real estate to the defendants, T. B. Spalding and Dora M. Spalding in joint tenancy; that said deed of John B. Spalding was executed and delivered without consideration therefor and while defendant John B. Spalding, was insolvent. That at all times from September 1, 1906, to the date hereof, defendant John B. Spalding in pursuance of his fraudulent scheme, intention and purpose to defraud plaintiff, Mattie J. Spalding, as aforesaid, and with the knowledge and acquiescence thereof and participation therein by T. B. Spalding and Dora M. Spalding, has secreted and concealed, and is now secreting and concealing the title to all of said defendants’ property by having the legal title to same taken and stand in the name or names of a third person or persons, with the result thereof, that

during all of said time, and particularly during the time said real property was being purchased, as aforesaid, and on May 20, 1917, and at the date thereof, none of the property of defendant John B. Spalding was or is subject to legal process and, by reason thereof, John B. Spalding was and is insolvent. That at all times from July 12, 1904, to the date hereof, plaintiff was and is an existing creditor of the defendant, John B. Spalding. That said defendant has no property or assets of any kind within the State of Wisconsin or the State of California, or elsewhere, other than the said real property”; that neither T. B. Spalding nor Dora M. Spalding at any time “made, executed, published, declared, or delivered in writing any declaration in substance or in effect that they or either of them were holding the legal title in the said real property or any part thereof for the use or benefit of the defendant John B. Spalding subject to a life interest in the favor of T. B. Spalding and Dora M. Spalding or either of them; . . . and that neither the said T. B. Spalding nor Dora M. Spalding in any manner accepted any express trust as last above referred to; and that the equitable beneficial title or right to the said real property has not, nor has any equitable beneficial title or right to any part thereof become vested in the defendant John B. Spalding by reason of any alleged express trust as last hereinabove referred to; and that all the rights of the said John B. Spalding and of the plaintiff herein in and to the said real property arise out of the matters and things hereinabove stated other than said alleged express trust”; and that said judgment of said circuit court “was at the time of the trial of this action and is a valid, subsisting and final judgment in all respects.” Judgment was entered on the findings, adjudging that defendant Elizabeth Blanche Spalding, as successor in interest of Dora M. Spalding, is the owner of an undivided half of said real property and that defendant John B. Spalding is the owner of an undivided half thereof and directing the latter to convey his interest therein to plaintiff in accordance with the provisions of the Wisconsin judgment. Plaintiff has appealed from the judgment in so far as it adjudges Elizabeth Blanche Spalding to be the owner of a half interest in the property and fails to

adjudge that John B. Spalding is the owner of the whole thereof and to direct that he convey the whole thereof to plaintiff, and also in so far as it fails to direct the entry of a deficiency judgment in favor of plaintiff against John B. Spalding.

T. B. and Dora M. Spalding were residing in the state of Illinois in the year 1907 and prior thereto. During that year T. B. Spalding went to Mexico and later in that year his wife joined him there. From Mexico they removed to Victoria, British Columbia, and later to California, where, November 8, 1909, they entered into an agreement to purchase the land involved in this action for the sum of $5,309. The sum of $1,000 was paid upon the purchase price at the time of the execution of the contract and the remainder was to be paid in three equal installments, payable two, three, and four years, respectively, after the date of the agreement. An expensive dwelling-house and other valuable improvements were placed upon the land during the succeeding years and on March 7, 1915, T. B. Spalding wrote the defendant John B. Spalding that “the ranch has all been paid for, the debt is all wiped out.”

Dora M. Spalding testified that she and her husband paid for the land with their own money; that they had about $9,000 when they came to California; that she carried $6,500 in “large bills” in a belt around her waist; that defendant John B. Spalding sent his parents money “the same as the other children did. He never sent it expecting to ever get it back, and there was no account made of it, and never gave him anything to show that he had given him (T. B. Spalding) money, and it was put in the main lot of money that we had, and there was no thought we would ever have to account for what he gave him nor how much. ... We have never made any profit to amount to anything; nothing like the land—that much land ought to pay. We have made something, but that was very little.” Robert B. Spalding, a son of the last-named witness, testified that shortly before the purchase of the land he saw at least $5,000 in the possession of his parents and that he made his father a gift of $500 in T911 and $1,000 in 1912. Defendant John B. Spalding testified in substance that he had owned no property subject to execu

The father wrote the son, at the times indicated, as follows: February 10, 1909: “We rely on your ability to manage our affairs as we are helpless to do it.” January 20, 1912: “I need not assure you that we turn to you as the sunflower turns to the sun. Your health and happi

In undated letters to defendant John

[1] In the light of the court’s finding, based upon ample evidence, that the parents knowingly participated in their son’s fraudulent scheme to defraud plaintiff of her rights and claims under the Wisconsin judgment, the foregoing letters point unerringly to the conclusion that the parents held the property either in trust for their son or pursuant to an agreement and understanding, based upon a sufficient consideration, that they were to have a mere life estate therein and that the whole thereof was to pass to the son upon their deaths. [2] If they held the

' The complaint alleges that “on the 20th day of May, 1917, defendants T. B. Spalding and Dora M. Spalding for a good and valuable and adequate consideration, conveyed said real estate to said defendant, John B. Spalding; and that in the furtherance of the fraudulent designs and intentions of the defendant John B. Spalding, as aforesaid, and with the actual knowledge and acquiescence thereof and participation therein by defendants, T. B. Spalding and Dora M. Spalding, as aforesaid, the defendant John B. Spalding on the 20th day of May, 1917, without consideration, conveyed said real estate to the defendants T. B. Spalding and Dora M. Spalding.” It was stipulated by the parties that these allegations be deemed denied. John B. Spalding and Dora M. Spalding testified that both of said deeds were executed without consideration and as parts of a single transaction “and for the purpose of creating in T. B. Spalding and Dora’M. Spalding a joint tenancy with the right of survivorship in said lands and premises instead of a tenancy in common.” The written conveyance from the parents to their son is presumptive evidence of a consideration. The court failed to find upon this issue, but found merely that the deed was executed and delivered “for a recited money consideration.” [4] If there was a “good and valuable and adequate considera

[5] Plaintiff duly moved the court for an order permitting her to amend her complaint, to “conform to the proofs made at the trial,” by alleging that “on or about January, 1909, defendants T. B. Spalding and Dora M. Spalding, orally contracted and agreed with defendant, John B. Spalding, ... in consideration of defendant, John B. Spalding, furnishing the necessary money to complete the purchase of the hereinbefore described real estate and to make the improvements to be created thereon, . . . the defendants T. B. Spalding and Dora M. Spalding, would execute and deliver to defendant, John B. Spalding, such document or instrument in writing as would vest the fee simple title to all of the hereinbefore described real estate in defendant, John B. Spalding, upon the deaths of defendants, T. B. Spalding and Dora M. Spalding”; that John B. Spalding furnished large sums of money for the alleged purpose; and that, subsequent to said oral agreement and in consideration of the furnishing of said money, T. B. Spalding and Dora M. Spalding “promised and agreed in writing that the defendants, T. B. Spalding and Dora M. Spalding, would execute such document or instrument in writing as would vest the fee simple title to said real estate in defendant, John B. Spalding, upon the deaths of defendants, T. B. Spalding and Dora M. Spalding.” The motion was denied by the court. The statements quoted herein from letters written by the parents are amply sufficient to support the allegations of the proposed amendments to the complaint. While the trial court has a wide discretion in granting or refusing leave to file amendments to conform to the proofs, it is deemed that, in view of the necessity of a retrial, it will be in the interest of justice to permit plaintiff to amend her complaint by alleging the facts set forth in the said proposed amendments.

[6] Appellant contends that the answer admits that all the money used in the purchase and improvement of

[7] Appellant further contends that since the court found that defendant John B. Spalding was the owner of only an undivided half of the property she should have been given a deficiency judgment for the difference between the amount of the Wisconsin judgment and the value of such undivided half of the property. In her complaint plaintiff, prayed for a judgment to the effect that said defendant was the owner of the property and that he be required to convey the same to her and for “such other relief as may seem just and equitable.” Prior to the entry of judgment she was granted “leave to file brief upon the question of entry of deficiency judgment.” That question, therefore, was properly before the court for decision. The Wisconsin court found that the value of the property here involved was $30,000 and that “both the beneficial and equitable title” thereto was vested in said defendant, and the judgment therein provides:

“First. That defendant, John B. Spalding, forthwith pay to the plaintiff, Mattie J. Spalding, the sum of Twenty-five Thousand Dollars ($25,000.00), as a judgment of

and for final division and distribution of the Estate of said John B. Spalding; that the costs of this proceeding, taxed against defendant, John B. Spalding, in the sum of Sixteen and Sixty One-hundredths ($16.60) Dollars, be paid by defendant to plaintiff forthwith; and that defendant, John B. Spalding, also forthwith pay to plaintiff, Mattie J. Spalding, as suit money in this behalf the sum of Five Thousand ($5,000.00) Dollars, Three Thousand Five Hundred ($3,500.00) Dollars of said amount being for attorney fees and One Thousand Five Hundred ($1,500.00) of said amount being for disbursements; that this order shall have the same force and effect as a judgment at law, and shall vest in plaintiff, Mattie J. Spalding, the vested and unconditional right to have and recover from defendant, John B. Spalding, the aggregate sum of Thirty Thousand Sixteen and Sixty One-hundredths ($30,016.60) Dollars, together with interest thereon at the rate of six (6%) per cent per annum from- the date hereof.

“Second. That in full satisfaction of the aggregate sum of money heretofore ordered to be paid by defendant to plaintiff, to-wit: Thirty Thousand Sixteen and Sixty One-hundredths ($30,016.60) Dollars, as and for a judgment for final division and -distribution of the Estate of defendant, John B. Spalding, including costs and suit money, defendant, John B. Spalding, shall, within five (5) days from the date hereof, execute, acknowledge and deliver to plaintiff, Mattie J. Spalding, a valid conveyance under the laws of the -State of California, in form according to schedule at the foot hereof, of and to the hereinbefore described real estate of defendant, John B. Spalding, situated in the County of Stanislaus, State of California, and that on the default and failure of defendant, John B. Spalding, to execute said conveyance in manner and form as herein provided, execution may issue on this judgment without further order of Court.”

It thus appears that plaintiff was given a money judgment for $30,016.60 and interest thereon and that defendant was ordered to convey the property to plaintiff in full satisfaction of the money judgment. If the defendants in this action had succeeded in establishing their allegation that John B. Spalding had no interest in the property he could not have satisfied the money judgment by execut

The parts of the judgment appealed from are reversed and the trial court is directed to permit the plaintiff to amend her complaint as herein indicated.

Plummer, J., and Hart, J., concurred.

A petition for a rehearing of this cause was denied by the district court of appeal on January 13, 1926, and a petition by appellant to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on February 11, 1926.