Smith v. Jackson State Bank

Decision Date04 March 1933
Docket NumberNo. 681.,681.
Citation63 F.2d 934
PartiesSMITH v. JACKSON STATE BANK.
CourtU.S. Court of Appeals — Tenth Circuit

Ray E. Lee, of Cheyenne, Wyo. (S. M. Lee, of Cheyenne, Wyo., on the brief), for appellant.

Harry B. Henderson, Jr., of Cheyenne, Wyo. (Payson W. Spaulding, of Evanston, Wyo., on the brief), for appellee.

Before COTTERAL, PHILLIPS, and McDERMOTT, Circuit Judges.

COTTERAL, Circuit Judge.

The appellant, Russell M. Smith, a citizen of Missouri, brought a suit against appellee, the Jackson State Bank, a citizen of Wyoming, to quiet his title to a tract of 151.33 acres, in Teton county, Wyo., to recover damages in the sum of $6,500 for slander of title, and to be awarded other just and equitable relief.

He alleged in his complaint he was the owner and in possession of the land; that the bank, on June 21, 1926, obtained a judgment in the Teton county district court, against Hugh Smith, for $3,569.15, caused an execution to issue thereon and at the sale bid in the land for $2,400, obtaining a certificate of sale which it caused to be recorded in the county clerk's office, that with the intent to cast a cloud on the title to the land, the bank brought another action against the plaintiff and Hugh Smith and his wife, falsely alleging that plaintiff had accepted a deed for the land from them, without consideration, and with intent to defraud the creditors of Hugh Smith, to plaintiff's knowledge; that plaintiff was compelled to attend the suit at various places, but it was dismissed by the bank; that appellant informed the bank of the facts and requested a release of its claim to the land, but it maliciously refused the request and without probable cause endeavored to compel appellant to pay Hugh Smith's debt to the bank; and that the appellant has been compelled to expend $1,500 to protect his title against appellee's claim and has been damaged thereby in the additional sum of $5,000.

The bank answered the petition, admitting plaintiff's possession of the land since May 14, 1927, and alleging his claim to the land was by virtue of a deed from Hugh Smith and wife, for the recited consideration of $1, but it was without actual consideration, showed on its face his signature was not witnessed, was in terms subject to a mortgage of the grantors, securing $2,500 in favor of the Willock Realty & Loan Company, and that mortgage was satisfied of record, on February 1, 1926.

The answer also alleged that Hugh Smith owed the bank $3,569.15, with interest, and did not have property sufficient to pay his debts other than the said land, and on September 25, 1925, without notice of the deed, the bank brought an action on its demand against him, and obtained the judgment against him by default on June 21, 1926; that an execution was issued thereon and the appellee purchased the land at the sale for $2,400.

The answer further denied all allegations of the petition not admitted, denied the bank knew or believed the allegations of its said petition in the action referred to were false, denied appellant endeavored to secure a trial of the case, but alleges it was continued at defendant's request, was reset and then dismissed without prejudice, denied the bank endeavored to compel appellant to pay the said judgment, but has made an offer that the land be resold and plaintiff appellant paid any valid claim he has to the land, and alleged the only purpose of the said execution and sale was to secure the payment of the bank's demand.

The prayer was that the deed be canceled, the bank be declared the owner of the land, with an offer that plaintiff be allowed a lien for his mortgage and outlays, if entitled thereto, and the bank be allowed a reasonable time to pay the same. There was added a prayer for other relief.

On June 1, 1931, the cause was tried before the court, without a jury, and by agreement of counsel the parties were allowed until the next day to stipulate for a revision of the pleadings and a transfer of the case to the equity side of the docket. On June 2, 1931, it was ordered, on stipulation, that the cause be so transferred, and plaintiff was allowed 20 days to conform his pleadings to an action in equity.

The court made special findings of fact and rendered a decree quieting plaintiff's title to the land, subject to the lien of the bank for $4,475.86, to be paid in 90 days, and in case of default to be realized by foreclosure and sale.

The deed of Hugh Smith and his wife, on its face, shows it was executed on August 15, 1925, by the grantors in the presence of Geo. F. Kapp, as subscribing witness. It also shows that Hugh Smith acknowledged it before a county clerk in Wyoming on August 28, 1925, that Mrs. Smith acknowledged it before Kapp as a notary, in California, on August 15, 1925, and again before him on December 31, 1925. The deed appears to accord with the Wyoming statute, which requires both a subscribing witness and acknowledgment. Section 4589, Comp. St. Wyo. 1920. Extrinsic evidence was required to show that the signature of Hugh Smith was not attested by a witness. But where an instrument is sufficient on its face, it is entitled to be recorded, and imparts constructive notice to an execution creditor. Boswell v. First Nat. Bank of Laramie, 16 Wyo. 161, 92 P. 624, 93 P. 661; Conradt v. Lepper, 13 Wyo. 473, 81 P. 307, 82 P. 2.

The trial court held, however, that while the deed was good between the parties, it was fraudulent and void as to the bank, and this conclusion was based on certain findings, which were, in substance: The deed was without consideration other than as expressed, which was grossly inadequate, and it was without obligation on the grantee to assume or pay the mortgage of Willock Realty Company for $2,500, and interest. The plaintiff and Hugh Smith are first cousins. The latter remained in possession and cropped the land in 1925 and 1926,...

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2 cases
  • In re Johnson
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • May 16, 1951
    ...of California was denied; In re Rohl, 8 Cir., 1929, 34 F.2d 268, 270, applying the homestead law of South Dakota; Smith v. Jackson State Bank, 10 Cir., 1933, 63 F.2d 934, 936, applying the homestead law of Wyoming; and the following cases applying the homestead law of Missouri: Farmers' Ban......
  • Tcherepnin v. Franz, 64 C 1825.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • March 13, 1980
    ...only those where the grantee was found guilty of actual fraud, or actual rents were received by the grantee. See Smith v. Jackson State Bank, 63 F.2d 934 (10th Cir. 1933); 60 A.L. R.2d, supra at 614. Where, as here, the court found the transfer constructively fraudulent, and the grantee has......

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