Brown v. Citizens' Nat. Bank of Cheyenne

• Decision Date: 17 July 1928
• Docket Number: 1381
• Parties: BROWN v. CITIZENS' NAT. BANK OF CHEYENNE, ET AL. [*]
• Court: Wyoming Supreme Court

269 P. 40

38 Wyo. 469

BROWN v. CITIZENS' NAT. BANK OF CHEYENNE, ET AL. ^[*]

No. 1381

Supreme Court of Wyoming

July 17, 1928

APPEAL from District Court, Weston County; HARRY P. ILSLEY, Judge.

Action by Mrs. Grace Brown against the Citizens' National Bank of Cheyenne and another. Judgment for plaintiff, and defendant appeals.

Affirmed.

J. P Rusk and W. C. Mentzer, for appellant.

A fraudulent conveyance is not as a rule subject to direct proof but must be established by substantial evidence Wager v. Hall, 83 U.S. 584, 601; Merchants' Bank v. Greenhood, (Mont.) 41 P. 250; Ogden Bank v Barker, (Utah) 40 P. 765; Cox v. Cox (Kans.) 17 P. 847. A transfer of property pending litigation is an indication of fraud, 12 R. C. L. 481; Apple v. Bank, (Okla.) 231 P. 79; Butler v. Thompson, (W. Va.) 31 S.E. 960; Martin v. Maggard, (Ky.) 267 S.W. 1102; Cioli v. Kenourgios, (Calif.) 211 P. 838; Bank v. Frantz, (Wyo.) 239 P. 531; insolvency at the time of conveyance, or the existence of a large indebtedness, tends to establish fraudulent character of the conveyance, Dodson v. Cooper, (Kan.) 32 P. 370; Mining Co. v. Manley, (Idaho) 81 P. 50; Bailey v. Blackmon, 3 F.2d 252; Bank v. Swan, 3 Wyo. 356; Spear v. Spear, (Me.) 54 A. 1106. A conveyance to members of creditor's family and removal of proceeds from the jurisdiction, tends to establish fraud, 12 R. C. L. 485; Surety Co. v. Udd, (Wash.) 118 P. 347; Judson v. Lyford, (Calif.) 24 P. 286; Bank v. McIntyre, (Mont.) 228 P. 618; inadequate consideration tends to establish fraud, 27 C. J. 831; Bank v. Barker, (Utah) 40 P. 765; Hinde v. Longworth, 11 Wheat. 198; Murphy v. Casey, (Minn.) 187 N.W. 416; Ollason v. Glasscock, (Ariz.) 224 P. 284; Byers v. Surget, 19 How. 303; Haskett v. Auhl, (Kans.) 45 P. 608; Miller v. Smith, (Okla.) 235 P. 225; Bank v. Corwine, 89 F. 774; Maasch v. Parkin, 69 N.Y.S. 187; Carter v. Richardson, (Ky.) 60 S.W. 397; Stirling v. Wagner, 4 Wyo. 31; Bartles v. Gibson, 17 F. 293; Dufrene v. Anderson, (Neb.) 93 N.W. 139; Nolan v. Glynn, (Ia.) 156 N.W. 426, 163 N.W. 469; Warehouse Co. v. Matthews, (Ky.) 74 S.W. 242; Perrine v. Perrine, (N. J. Eq.) 50 A. 694; a conveyance to relatives, while heavily indebted or insolvent, the removal of proceeds from jurisdiction and inadequate consideration, tend to establish fraudulent intent, Mining Co. v. Manley, (Idaho) 81 P. 50; Hanscome-James v. Ainger, (Calif.) 236 P. 325; Wells v. Bank, (Colo.) 48 P. 808; circumstances were sufficient to put transferee on notice, and call for inquiry is sufficient to charge transferee with notice, Plow Co. v. Sherman, (Okla.) 41 P. 623; Philbrick v. O'Connor, (Ore.) 13 P. 612; Houck v. Christy, 152 F. 612; Webber v. Rothchild, (Ore.) 15 P. 650. Where the conveyance is without consideration, notice of grantor's intent is immaterial, Bank v. Barker, supra; Bank v. Frantz, supra; Martin & Co. v. Maggard, supra. Failure to produce evidence to establish the validity of the transaction is indication of fraud, Stockmen's Loan v. Johnston, (Wyo.) 240 P. 449; Pruym v. Young, (La.) 25 So. 125; it is only where grantee of fraudulent conveyance acts in good faith that he may be reimbursed, Bush v. Collins, (Kans.) 11 P. 425; Burke v. Koch, (Calif.) 17 P. 228; Leinbach v. Dyatt, (Kans.) 230 P. 1074. There is conflict of opinion as to where the burden of proof lies in actions involving conveyances fraudulent as to creditors, 12 R. C. L. 666; 27 C. J. 788; Reid v. Co., (Mont.) 123 P. 397; Greenlee v. Owens, (Colo.) 220 P. 496. Attorneys fees are not recoverable by plaintiff, 32 Cyc. 1380; Co. v. Jones, 13 F. 567.

E. C. Raymond, for respondent.

Fraud is never presumed, and must be proved by satisfactory, clear and convincing testimony; authorities cited by appellant do not support her contention; appellant's brief was apparently prepared on the theory that this is an action to set aside a conveyance made in fraud of creditors; it is not that kind of an action; appellant levied upon and attempted to sell land that was not owned by its judgment debtor, and this action is for the purpose of setting aside that deed. The argument of fraud is based upon conjecture and suspicion. Fraud is never presumed, Allen v. Riddle, 37 So. 680; Eickstaedt v. Moses, 105 Ill. 634; Co. v. Reed, 55 N.E. 224; Bank v. Worthington, 46 S.W. 745; Foster v. McAlester, 114 F. 145. Whether a transaction is fraudulent is a question of fact, and when resolved by a court sitting as a jury, with all the witnesses before it, its judgment will not be disturbed, if there be evidence to support the judgment, Rosenheimer v. Krenn, (Wisc.) 106 N.W. 20; 12 R. C. L. 479. Appellant had no right to take the land under a judgment against a stranger; nothing has been shown to warrant a reversal of the judgment; the insolvency of Popham was not established; the lands were taken under attachment in a suit against Popham, while the record shows plaintiff to be the owner of the lands; plaintiff below was entitled to damages awarded by the trial court.

RINER, Justice. BLUME, C. J., concurs. CROMER, District Judge, concurs in that part of the opinion modifying the judgment, but dissents as to its affirmance as modified.

OPINION

RINER, Justice.

This was an action brought in the District Court of Weston County by Mrs. Grace Brown, plaintiff below and respondent here, to quiet title to certain real estate in that county, and to restrain the sale of said property under execution issued on a judgment obtained by defendant and appellant, Citizens National Bank of Cheyenne, Wyoming, against one John Popham.

The case was tried to the court without a jury, and plaintiff obtained a judgment quieting title to the land in her and for $ 350 damages. The defendant below has brought the case here for review by direct appeal. For convenience the parties will be designated as appellant and respondent, respectively.

The respondent, a daughter of John Popham, claims title to the real estate in question by and through a deed executed by the latter to her under date of October 11, 1923, and recorded October 22, 1923 in the office of the county clerk and ex-officio recorder of deeds of Weston County, Wyoming.

The record discloses that on May 15, 1923, the appellant, as plaintiff, instituted an action in the District Court of Weston County against the said John Popham, as defendant, wherein it was sought to recover judgment for $ 1311.77 alleged to be due appellant on a promissory note on account of principal, interest and attorney's fees, together with costs of action. Many months after this action had been started by appellant, and on December 6, 1923, it sued out a writ of attachment and caused the lands in controversy in the present suit to be attached on the date last mentioned as the property of the said John Popham. Subsequently on March 19, 1924, appellant secured the entry of a judgment in its favor in that action as prayed, levied upon the attached property and proceeded to advertise and sell the same on June 13, 1924.

The suit now before us was commenced by respondent in the county last mentioned on the 9th day of June, 1924. Its purpose was to quiet respondent's title to the land attached as heretofore recited, and to restrain the proposed sale. It does not appear that an injunction was obtained, and on June 13, 1924, the advertised date, the lands in question were sold under the judgment secured during the month of March preceding, and appellant became the purchaser thereof at said sale.

In defense of the present suit it was pleaded and is contended by appellant that the conveyance of this real estate in October, 1923, by Popham to respondent during the pendency of the litigation by appellant against Popham, was without consideration and was made on the part of the latter for the purpose of hindering, delaying and defeating his creditors in collecting their claims and obligations against him. Appellant prayed that title to the land be quieted in it, subject only to Popham's equity of redemption, and that the deed from Popham to respondent be cancelled and annulled. The principal question argued by counsel for the parties is whether the findings and judgment of the trial court are supported by the evidence in the case. This necessitates a brief review of the record made on the trial.

Respondent and her husband, Lawrence O. Brown, were the principal witnesses in her behalf. Summarized from the transcript their testimony was in effect this: John Popham originally owned the real estate involved in this litigation. In the summer of 1923, he left Wyoming and went to Missouri. During the month of September of that year, respondent had some correspondence with her father relative to purchasing this land, and it was agreed between them that she should pay him $ 1,000 for it. Three hundred dollars of this amount was to be paid in cash, an indebtedness owed by Popham for several years to respondent and her husband in the sum of $ 200 was to be released by them, they were to pay $ 220 of back taxes on the premises and the balance of the purchase price was to be paid from a loan, which was immediately to be asked for on the property by respondent. The $ 300 in cash was sent to Popham in the form of bills in early October, 1923, by respondent's husband in an envelope, and though not registered, had the latter's return card and post office box number thereon. The deed to the property reciting a consideration of $ 300 was dated October 11, 1923, which was received by respondent a few days after that date, together with two other deeds of other property belonging to Popham running to respondent's sister, as grantee therein. All these deeds were sent by respondent to the County Clerk's office at Newcastle by registered mail for record, but she did not pay the recording...