Bond v. Werley

• Decision Date: 21 December 1933
• Docket Number: 24737.
• Citation: 175 Wash. 659,28 P.2d 318
• Parties: BOND et ux. v. WERLEY et al.
• Court: Washington Supreme Court

28 P.2d 318

175 Wash. 659

BOND et ux. v. WERLEY et al.

No. 24737.

Supreme Court of Washington

December 21, 1933

Department 2.

Appeal from Superior Court, Okanogan County; William C. Brown Judge.

Action by Fred M. Bond and wife against A. A. Werley and others. Judgment for plaintiffs, and defendants appeal.

Affirmed.

Padden & Moriarty, of Seattle, for appellants.

Wright & Wright and Felix Rea, all of Seattle, for respondents.

HOLCOMB, Justice.

This appeal is from a judgment in favor of respondents in an action tried to the court in which the relief prayed for was the setting aside of an alleged fraudulent conveyance of real estate in Okanogan county.

Respondents in their complaint, alleged that in May, 1932, respondent Fred M. Bond, an attorney at law, obtained a judgment in the superior court of Pacific county against A. A. Werley and wife in the sum of $2,621.15 and $250 attorney's fees that a return nulla bona was made by the sheriff of Pacific county. The judgment was upon a promissory note which was set up as a counterclaim to an action originally instituted by A A. Werley against respondents for rent. It is alleged in the complaint that, subsequent to the execution of that note on which the judgment for respondents is based, A. A. Werley and Nora Werley, his wife, began a systematic plan of transferring all of their property, without consideration, to their son, Robert A. Werley. It is further alleged that in furtherance of this plan, and to cheat, wrong, and defraud their creditors, they conveyed to their son Robert A. Werley sundry pieces of property, and in fact all the property which they owned of any worth or value, all without consideration, and wholly and primarily for the purpose of defrauding their creditors, and particularly that they conveyed to the son the property therein described, which constitutes valuable orchard property. It is further averred that the above-mentioned property conveyed by A. A. Werley and wife to their son Robert was reasonably worth $60,000, subject to a contract of sale made to one E. A. Beaughan, upon which contract $5,000 had been paid and the balance was still due; that the fee title, however, to that property had been transferred by Werley and wife to Robert Werley, whom it is charged is now holding the property in fraud of creditors of A. A. Werley. It is prayed that a decree be entered establishing that Robert A. Werley holds the property on behalf of A. A. Werley and Nora Werley, his wife, and that the judgment of respondents be established as a first and paramount lien against the property and the property be sold to satisfy their judgment.

Appellants A. A. Werley and wife and Robert Werley answered the complaint separately; each answer alleging the same affirmative defenses. Their affirmative defenses are divided into three sections, all under one defense. The first affirmative defense alleges that the son assumed certain notes which the father owed, one, a note made in 1915, for $1,224.50, the other for $7,610. The second affirmative defense in both answers is that Robert Werley agreed to supply and maintain a home for his mother, one of appellants, for the rest of her life because of the failing health and financial condition of appellant A. a. Werley. The third affirmative defense is that appellant Robert A. Werley is the only son of appellants A. A. Werley and wife, and they had intended, desired, and promised to give him a college education, which, bacause their financial condition became such in 1929 that it was impossible to fulfill that promise, they had therefore deeded this land to him.

The trial court found against the second and third affirmative defenses as well as against the first, but no contention is made on this appeal as to the validity of the second and third defenses which may be considered abandoned, probably because the second would be untenable under Rem. Rev. Stat. § 5824 ( Allard v. La Plain, 152 Wash. 211, 277 P. 843), and the third because it could not be considered as anything but a gift, without consideration. See Schaffer v. Stever, 153 Wash. 116, 279 P. 390.

After making certain uncontested findings, the trial court found the following:

'That subsequent to the execution of the note on which the judgment of the plaintiffs is based, the defendants, A. A. Werley and Nora Werley, his wife, began a systematic plan of transferring all of their property, without consideration, and conveying the same away; that the most valuable part of the property they conveyed to their son, Robert A. Werley, without consideration.

'That in furtherance of this plan, and to cheat, wrong and defraud their creditors, and particularly the plaintiffs in this action, they conveyed to their son, Robert A. Werley, all of the property which they owned of any value or worth, and, as aforesaid, without consideration, and wholly and primarily for the purpose of defrauding their creditors, and more particularly the plaintiffs in this action, and particularly they conveyed unto their son, Robert A. Werley, the following described property in Okanogan County, Washington, to-wit:

'Lots 12 and 13, Block 'B', Ellis-Forde Orchard Company's Plat No. 1, and

'Lots 11, 12 and 13, block 'C', Ellis-Forde Orchard Company's Plat No. 1. * * *

'That the fee title to said property remained in A. A. Werley and Nora Werley, his wife, but, as Before found, they, in order to cheat, wrong and defraud their creditors, or the plaintiffs in this action, conveyed their remaining interest of $55,000.00 in the contract to their son, Robert A. Werley, when threatened with suit by the plaintiffs upon their note. However, as Before suggested in the preamble to these findings, E. A. Beaughan and wife were innocent purchasers and purchased in good faith under their contract and took possession of said property on or about August 30, 1929, and are still in possession and their rights under their contract of purchase are entitled to be preserved. * * *

'The defendants, A. A. Werley and wife, and son, Robert A. Werley, likewise contend in their answer that the defendants, Werley and wife, were owing two notes, one for $7610.00 and one for $1224.50 to certain nieces or relatives of the defendant, A. A. Werley, and that when the transfer was made by said A. A. Werley and wife to their son their son assumed these obligations as part of the consideration for the transfer. This court finds however, that said Robert A. Werley did not assume said obligations; that there was no competent evidence introduced in this cause to cause this court to believe that said Robert A. Werley assumed said obligations or that the debtors agreed to take Robert A. Werley for said debt, but if such assumption by Robert A. Werley could be considered that those creditors could not be preferred as against the plaintiffs herein.

'That the defendants, A. A. Werley and wife, and son, Robert A. Werley, likewise contend that as additional consideration for said transfer the defendant, Robert A. Werley, agreed to support and supply his mother, Nora Werley, with a home for the rest of her life, but this court finds there is no credible evidence to believe that any such arrangement was made, but if the same was made it was in violation of statute and law and wholly void as against the creditors of the defendants, A. A. Werley and wife, and particularly the plaintiffs herein. * * *

'The defendants Werley further contend that at the date of the transfer of said property from A. A. Werley and wife, to their son, it was much depreciated in value and did not exceed the consideration paid therefor by Robert A. Werley. This court finds, however, that said contention is not sustained; that the property was worth a considerable sum of money and is worth much more than any consideration passing from Robert A. Werley, and, in fact, this court finds there was no consideration passing from Robert A. Werley at all that was a valid consideration as against the plaintiffs herein, and the court finds that said Robert A. Werley was nothing more than a volunteer in that transaction.'

Based upon its findings, the trial court made the following conclusions of law which are contested:

'That the plaintiffs are entitled to a decree adjudging and decreeing that that certain deed or conveyance from A. A. Werley and wife to Robert A. Werley, purporting to convey the following described property, to Robert A. Werley, in Okanogan County, Washington, to-wit:

'Lots 12 and 13, Block 'B', Ellis-Forde Orchard Company's Plat No. 1, and

'Lots...