Blankenship v. Myers
| Decision Date | 30 December 1975 |
| Docket Number | No. 10857,10857 |
| Citation | 97 Idaho 356,544 P.2d 314 |
| Parties | Dwayne BLANKENSHIP and Beulah Blankenship, husband and wife, plaintiff-Appellants, v. Robert MYERS et al., Defendants-Respondents. |
| Court | Idaho Supreme Court |
Stephen Bistline, Sandpoint, Thomas Molott, Spokane, Wash., for plaintiffs-appellants.
James E. Hunt, Sandpoint, Paul S. White, Spokane, Wash., for defendants-repondents.
This is an action to set aside a conveyance as in fraud of creditors, or in the alternative to assert a vendor's lien against certain real property which was conveyed by plaintiff-appellants Dwayne and Beulah Blankenship to Roy C. Myers, Sr., and his son and daughter-in-law Robert and Nellie Myers, the defendant-respondents herein. A summary of the relevant facts of this rather convoluted transaction follows:
The plaintiff appellants Dwayne and Beulah Blankenship, husband and wife, originally were the owners or the property in question, a farm along the Kootenai River in Boundary County, Idaho, herein referred to as the Bonners Ferry ranch. In August of 1956 the Blankenships agreed to sell their equity in the ranch to Roy C. Myers, Sr., and Robert and Nellie Myers. The purchase price for the property was purportedly to be a ranch owned by the two Myerses in the state of Washington, referred to as the Moses-Coulee property. However, the Blankenships maintained throughout the action, and the evidence tends to support their contention that the real estate agent who was handling the transaction, a Mr. Al Patrick, had represented to the Blankenships that there was a contract of sale already in effect on the Moses-Coulee property, and that what the Blankenships were really buying was a vendor's interest in the contract of sale of the Moses-Coulee property, the proceeds of which they could use to acquire the Vic Weitz ranch in Washington which they were really interested in purchasing. The Blankenships denied that they ever agreed to accept the Moses-Coulee property in exchange for their Bonners Ferry ranch. However, the original documentation represented the transaction to be a trade of the two ranches.
Blankenships finally determined that the Moses-Coulee property was not sold and it is questionable whether there ever was a contract of sale on it, this apparently being one of numerous fraudulent statements made by the real estate salesman Patrick. Thereafter, Patrick made certain other representations to both parties that a loan could be obtained on the Moses-Coulee property to provide the Blankenships with the cash necessary to acquire the Vic Weitz ranch in the state of Washington, the property which they were really interested in acquiring. When that loan never materialized and the Blankenships made their dissatisfaction known to Roy C. Myers, Sr., in October of 1956, he agreed to an alternate transaction with the Blankenships. The alternate agreement called for Roy C. Myers, Sr., to pay the Blankenships $105,000 in contracts and cash in place of the Moses-Coulee property, and the Blankenships returned the deeds which the Myerses had executed to them on the Moses-Coulee property. However, when Roy C. Myers, Sr., turned the $105,000 in contracts and cash over to the real estate salesman Patrick, he converted $50,000 worth of those documents and the Blankenships never received the full $105,000. However, in view of Patrick's activities it was not until much later that the parties realized that Patrick had converted those assets. The details of how Patrick concealed his conversion, and his subsequent dealings with the Moses-Coulee property were brought to light in the litigation subsequently conducted in the state of Washington which will be mentioned later.
After acquiring the Bonners Ferry property in August of 1956, Roy C. Myers, Sr., experienced several adverse financial transactions the net effect of which was that in 1959 he transferred nearly all his remaining assets to his children, who in return assumed approximately $100,000 of his liabilities. On April 7, 1959, Roy C. Myers, Sr., deeded his three-fourths interest in the Bonners Ferry ranch to his son Robert by a quitclaim deed, which was not recorded until July 1, 1959. This is the transfer which the Blankenships contend was in fraud of creditors. On July 17, 1959, Roy C. Myers, Sr., initiated a quiet title action to the Moses-Coulee property in the state of Washington, joining the Blankenships as defendants. 1 In that quiet title action the Blankenships counterclaimed for the $50,000, which they had never received pursuant to the alternate transaction involving the sale of the Bonners Ferry property, and judgment was entered in favor of the Blankenships against Roy C. Myers, Sr., on November 27, 1961, on their counterclaim for the $50,000 which they had never received as a result of Patrick's conversion. The Blankenships also obtained a $50,000 judgment against Patrick, but have been unable to collect it because Patrick, who was then serving a life sentence in a federal penitentiary, apparently is impecunious.
The Blankenships have never been able to satisfy their judgment against Roy C. Myers, Sr., because he is now also apparently insolvent, and this action was instituted on April 6, 1962, in the district court in Boundary County, Idaho, to set aside the 1959 transfer of Roy C. Myers, Sr.'s, interest in the Bonners Ferry ranch as in fraud of creditors, or, in the alternative, to assert a vendor's lien against the Bonners Ferry property for the balance that the Myerses allegedly owed on the purchase price.
The trial court rejected both of the Blankenships' claims against the Bonners Ferry property and entered judgment denying the Blankenships' claim that the transfer from Roy C. Myers, Sr., to Robert and Nellie Myers was in fraud of creditors, and denying the Blankenships a vendor's lien on the Bonners Ferry property. The Blankenships have appealed from that judgment. Robert and Nellie Myers are the respondents herein, Roy C. Myers, Sr., not being a party to this appeal. We reverse.
Central to the issue of whether or not the transfer by Roy C. Myers, Sr., of his three-fourths interest in the Bonners Ferry ranch on April 7, 1959, was a transfer in fraud of his creditors is an evaluation of the consideration which Robert Myers gave for his father's three-fourths interest, and the value which the trial court placed upon that three-fourths interest. The trial court made the following findings of fact pertaining to that issue.
'XIII.
'The defendants (Robert and Nellie Myers) in exchange for that deed of April 7, 1959, from Roy Myers assigned and transferred to Roy Myers a contract of the value of $68,000.00, cancelled debts due defendants from Roy Myers in the sum of $18,767.00 and assumed the indebtedness against the property upon the following values:
Value of property on April
7, 1959 .................... $371,000.00
Indebtedness against
property .................... 245,208.00
-----------
Value ranch on April 7
1959 ....................... $125,792.00
3/4 interest Roy Myers ...... $ 94,344.00
That Roy Meyers received for a fractional three-fourths interest mathematically computed at $94,344.00, the sum of.$86,767.00, being a fair value therefor.
'XIV.
'There is no evidence before the Court to establish clear and convincingly that the transaction involved rendered Roy Myers insolvent or that he was not in fact solvent on the 7th day of april, 1959.' (Clk. Tr., p. 63).
Blankenships have assigned these findings as error, and further have assigned as error the refusal of the trial court to consider as substantive evidence the depositions of Roy C. Myers, Sr., and Robert Myers.
The trial of this matter was held in November, 1969, and the pertrial depositions of Roy C. Myers, Sr., and Robert Myers were taken in 1962, three years after the transfer in question. During the course of those depositions, both Myerses made certain statements which appellants contend were admissions concerning the value of the Bonners Ferry property, and of the value of Roy C. Myers, Sr.'s, interest in it at the time it was tranferred and that these admissions tended to place a substantially higher value upon the Bonners Ferry ranch and Roy C. Myers, Sr.'s, interest in it than the trial court placed on the ranch and his interest in finding of fact XIII. At the trial the Blankenships offered into evidence the depositions of Robert Myers and Roy C. Myers, Sr., as substantive proof of the facts contained in the admissions made by those witnesses at the deposition. However, the trial court refused to admit those depositions as substantive evidence, ruling that under the Idaho Rules of Civil Procedure 2 the deposition of a party opponent could not be used as substantive evidence if the party was available to testify. Both Roy C. Myers, Sr., who was then 89 years old and whose memory was faltering, and Robert Myers were present at the time of trial, and therefore the trial court refused to admit the depositions for any purpose other than impeachment and the refreshing of a witness's memory. 3
We believe the trial court erred in refusing to consider the depositions of Robert Myers and Roy C. Myers, Sr., as substantive evidence for the following reasons. First, the depositions arguably contained admissions of a party opponent, and this Court has long allowed the introduction of admissions of a party opponent into evidence, in most cases under circumstances in which the reporting of the party opponent's statement is not nearly as likely to be as accurate as in recorded testimony contained in a deposition. E. g., Coffin v. Bradbury, 3 Idaho 770, 35 P. 715 (1894); Clarke v. Blackfoot Water Works, Ltd., 39 Idaho 304, 228 P. 326 (1924).
Secondly, I.R.C.P. 26(d)(2) provided:
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