Mitchell-Powers Hardware Co. v. Eaton

198 S.E. 496, 171 Va. 255, 1938 Va. LEXIS 278
CourtSupreme Court of Virginia
DecidedSeptember 9, 1938
StatusPublished
Cited by4 cases

This text of 198 S.E. 496 (Mitchell-Powers Hardware Co. v. Eaton) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mitchell-Powers Hardware Co. v. Eaton, 198 S.E. 496, 171 Va. 255, 1938 Va. LEXIS 278 (Va. 1938).

Opinion

(Gregory, J.,

delivered the opinion of the court.

The litigation from which this appeal arises was begun on November 6, 1936, by J. P. Young who filed a creditor’s bill against the estate of Hugh H. Eaton, Sr., deceased. Another creditor’s bill was filed against the estate by the trustees for certain depositors of the Bank of Bristol who sued for the benefit of the Reconstruction Finance Corporation. A petition was filed in the cause by Mitchell-Powers Hardware Company. In the latter bill and in the petition a note of $5,000 made by Eaton in his lifetime and payable to his sister, Miss Sarah A. Eaton, to which was attached as collateral fifty-five shares of the capital stock of the Mitchell-Powers Hardware Company, was attacked as being without consideration. Later the causes were consolidated by a decree, in which the whole matter was referred to a commissioner in chancery for report upon certain inquiries specifically directed in the decree. The commissioner reported that the $5,000 note to which the fifty-five shares of stock were attached as collateral was given for no legal consideration and it was accordingly not allowed as a debt against the estate.

[258]*258The note and stock were transferred from Miss Sarah A. Eaton to Hugh H. Eaton, Jr., at that time fifteen years of age, and a son of Hugh H. Eaton, Sr., deceased. He had appeared in the litigation by guardian ad litem and filed exceptions to the commissioner’s report which disallowed the $5,000 note as a claim against the estate and which set aside the transfer of the fifty-five shares of stock from Hugh H. Eaton, Sr., to his sister Sarah A. Eaton.

The court, after mature consideration of the exceptions to the report, sustained the exception of Hugh H. Eaton, Jr., the appellee here, entered a decree establishing the $5,000 note as a debt against the estate and impressed the fifty-five shares of stock with a lien for the payment of the note. It is from this part of the decree that the present appeal was sought and allowed; therefore, the sole purpose of this appeal is to determine the .correctness of the ruling of the court in establishing the $5,000 note as a liability of the estate of Hugh A. Eaton, Sr., deceased, and allowing a lien on the fifty-five shares to secure its payment.

In the bill of complaint filed by the trustees of the depositors of the Bank of Bristol and the petition of the Mitchell-Powers Hardware Company, it was alleged that Hugh H. Eaton, Sr., was the owner of 100 shares of the capital stock of the Mitchell-Powers Hardware Company at the time he became indebted to the Bank of Bristol. At this time he was also indebted to other persons, firms and corporations, including a debt to the Mitchell-Powers Hardware Company. On February 4, 1934, Hugh H. Eaton, Sr., executed a note for $5,000 to his sister, Miss Sarah A. Eaton, which was secured by sixty shares (later found to be fifty-five shares) of stock of the Mitchell-Powers Hardware Company. The note and stock were delivered to E. W. Potts, trustee, with instructions to deliver the stock or what was left to Hugh Eaton, Jr., when the note was paid. It is contended by the appellants that the note was executed without consideration and was voluntary and fraudulent under Code, sections 5184, 5185.

[259]*259The purpose of the bill and petition was to set aside the transfer of the fifty-five shares of stock and make them available for the payment of the debts of the estate of Hugh H. Eaton, Sr., deceased.

In the answer of the guardian ad litem of Hugh H. Eaton, Jr., the infant appellee, to the bill and petition, the position of the infant is set forth. He acknowledges the execution of the note and that fifty-five shares of stock were pledged as collateral, as well as the equity in twenty-five additional shares of stock then pledged as collateral on a note due to J. P. Young. Hugh H. Eaton, Sr., endorsed in blank the assignment on the certificates representing the fifty-five shares of stock and these were held by E. W. Potts as trustee under a trust which provided that upon the discharge of the note, the fifty-five shares of stock should be delivered to Hugh H. Eaton, Jr., if he were then of age and, if not, that the stock should be held by the trustee until he reached the age of twenty-one. He further states that the above related transaction was made in pursuance of an agreement between Hugh H. Eaton, Sr., and his sister,' Sarah A. Eaton, whereby he promised to reimburse her for her support of their mother. After several years Hugh H. Eaton had been unable to make these payments and as a result executed a note to Sarah Eaton, secured by a deed of trust upon his house, and thereafter the note and deed of trust were canceled, and in their place the above described note was executed and the stock placed as collateral.

From the foregoing allegations, as has already been indicated, complainants were seeking to set aside the note for $5,000 and the transfer of the fifty-five shares of stock to Miss Sarah A. Eaton as having been made without valid consideration and void under the provisions of Code, sections 5184, 5185. From the averments of the answer of the guardian ad litem, the validity of the note and the transfer of the fifty-five shares of stock were sought to be upheld under a verbal trust whereby Hugh H. Eaton, Sr., had agreed to reimburse and compensate Miss Sarah A. Eaton for the expense she had incurred and would incur by reason [260]*260of maintaining and supporting their aged mother, Mrs. A. B. Eaton who was ninety years of age. It was also made in consideration of her promise to continue the support of her mother as long as she might live. The evidence supports the oral contract claimed by the guardian ad litem in his answer.

The question we must decide is whether or not Hugh H. Eaton, Sr., was under a legal obligation to support his mother. If he was, then such obligation would constitute a valid consideration for the note and the transfer of the stock. On the other hand, if he was under no legal obligation to support his mother, the note would be without consideration and the assignment would be void under Code, section 5185.

It is stated in the brief of counsel for appellee that the only question presented is whether or not a contract for the support of one’s aged and dependent parent is a contract upon a consideration deemed valuable in law.

Prior to 1927 it was certainly true in Virginia that a child was under no legal obligation to support his parent whether dependent or not. In Davis v. Anderson, 99 Va. 620, 39 S. E. 588, the court expressly held that there was no legal obligation resting on either the son or the daughter to care for and support their mother.

Appellee admits that such v/as the law prior to 1927, but contends that the rule was changed, (1) by the case of Bruce v. Dean, 149 Va. 39, 140 S. E. 277, and, (2) by Code, section 1944a.

In Bruce v. Dean, supra, one Meadows had been convicted of the murder of his wife and sentenced to life imprisonment. The mother left surviving her six infant children who ranged in age from one and a half to twelve years. These children were taken to the Church of the Brethren Industrial School. It became necessary for the school authorities to seek remuneration for the maintenance and support of the children, and Meadows was anxious to provide it. Pursuant to this mutual desire, Meadows conveyed all of the equity in his estate to the industrial [261]

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198 S.E. 496, 171 Va. 255, 1938 Va. LEXIS 278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mitchell-powers-hardware-co-v-eaton-va-1938.