Brummund v. Romig

• Decision Date: 01 August 1938
• Docket Number: 6473
• Citation: 59 Idaho 312,81 P.2d 1085
• Parties: W. H. BRUMMUND, Respondent, v. MYRON L. ROMIG and GRACE B. ROMIG, Husband and Wife, MINNIE I. CURTIS, RONALD ROMIG and GEORGE V. CURTIS, Appellants
• Court: Idaho Supreme Court

81 P.2d 1085

59 Idaho 312

W. H. BRUMMUND, Respondent, v. MYRON L. ROMIG and GRACE B. ROMIG, Husband and Wife, MINNIE I. CURTIS, RONALD ROMIG and GEORGE V. CURTIS, Appellants

No. 6473

Supreme Court of Idaho

August 1, 1938

FRAUDULENT CONVEYANCES-TRANSFER IN FRAUD OF CREDITOR-EVIDENCE-INTENT AND KNOWLEDGE OF GRANTEE-SOLVENCY OF DEBTOR-DELIVERY OF DEED-PLEADING-SEPARATE CAUSES OF ACTION.

1. In creditor's action to set aside deeds by debtor to her son and daughter and by debtor's daughter to her son complaint alleging that both deeds were intended to accomplish single purpose of defrauding creditor stated but one cause of action and hence demurrer was properly overruled and motion to require judgment creditor to elect between causes of action was properly denied.

2. Evidence held insufficient to justify judgment setting aside deeds by debtor to her son and daughter and by daughter to her son on ground that deed from debtor to her son and daughter was not delivered until date deed was recorded subsequent to entry of judgment in favor of creditor and that conveyances were made pursuant to conspiracy on part of debtor and her relatives to defraud creditor.

3. In creditor's suit to set aside conveyance as fraudulent where grantee has in his possession and produces a deed of conveyance duly executed, the prima facie presumption arises that it has been duly delivered and the burden of proof rests on the party who asserts its nondelivery.

4. Creditor of grantor was not entitled to set aside deed on ground that grantor and grantee had held up recording deed in order to enable grantee to avoid taxes through grantor's claiming a widow's exemption from taxation on property since such intention was fraud on county and state and not on creditor of grantor.

5. In mortgage creditor's action to set aside debtor's conveyances as in fraud of creditor, judgment entered in mortgage foreclosure action finding reasonable value of realty covered by mortgage was res judicata as to value of property on date of foreclosure of mortgage.

6. In mortgage creditor's action to set aside as fraudulent debtor's conveyance to son and daughter and daughter's conveyance to her son, judgment entered in prior foreclosure action fixing reasonable value of realty covered by mortgage at time of foreclosure did not establish or determine value of property covered by mortgage at time of conveyances more than eight years prior to foreclosure of mortgage.

7. It is general public knowledge that patented grazing land in Idaho county had not reached the depths of depression in value in 1927 that it later reached in 1935.

8. In mortgagee's action to set aside as fraudulent conveyances by mortgagor to wife of comortgagor and to mortgagor's son and by comortgagor and his wife to their son, mortgagee was required to make prima facie case that security covered by mortgage was insufficient to cover debt when conveyance was made and that conveyances rendered mortgagors insolvent by reason of their not having other property adequate to respond to any deficiency judgment which might be entered.

9. A grantee for valuable consideration and without notice of any fraud or fraudulent intent on the part of the grantor cannot be deprived of the benefit of his purchase at the suit of the vendor's creditors on a charge of the vendor's fraudulent intentions in making the conveyance.

10. Where prior to foreclosure of mortgage and entry of deficiency judgment mortgagor conveyed property not covered by mortgage to her son and daughter, and daughter and her husband conveyed her interest in property to their son conveyance by daughter of mortgagor was improperly set aside notwithstanding that conveyance from mortgagor was without consideration, where conveyance by daughter and her husband was for full consideration and without notice to grantee of any fraudulent intent or insolvency.

APPEAL from the District Court of the Second Judicial District, for Latah County. Hon. Everett E. Hunt, Presiding Judge.

Action to set aside deeds of conveyance. Judgment for plaintiff. Defendant appeals. Reversed and cause remanded for new trial.

Reversed and remanded. Costs awarded to appellants.

Abe Goff and Herman Welker, for Appellants.

Where two causes of action, not inconsistent are commingled in one count the proper procedure in such an event is by motion to require plaintiff to separately state his causes of action. (Labonte v. Davidson, 31 Idaho 644, at 650, 175 P. 588.)

Whatever the general rule may be with respect to the burden of proof in actions to set aside conveyances alleged to be in fraud of creditors, it must be kept in mind that this action is by a secured creditor, one who held mortgaged security for payment of his debt. The transfer in no manner endangered the mortgaged security. The creditor neither alleged nor proved that the mortgaged property was not of sufficient value to pay the debt when the instalment payments for the purchase of the land were made, and the gift was made to the respondent. (McMillan v. McMillan, 42 Idaho 270, at 275, 245 P. 98.)

It is not sufficient for the secured creditor to merely prove the transfer, the debt, and the subsequent foreclosure and deficiency judgment. He must prove the insolvency of the defendants at the time of the transfer. (McMillan v. McMillan, supra.)

Feeney, Belknap & McQuade, for Respondent.

If two causes of action are commingled in one count, the proper procedure in such an event is by motion to require plaintiff to separately state his causes of action. (Labonte v. Davidson, 31 Idaho 644, at 650, 175 P. 588; Darknell v. Coeur d'Alene etc. Trans. Co., 18 Idaho 61, 108 P. 536; Roberts v. Sinnott, 55 Mont. 369, 177 P. 252.)

Where acts of fraud alleged are parts of one entire scheme to divest plaintiff of his rights, and although numerous, they constitute one cause of action. (California Fig Syrup Co. v. Clinton E. Worden & Co., 86 F. 212; Farmer v. O'Carroll, 162 Md. 431, 160 A. 12; Raynor v. Mintzer, 67 Cal. 159, 7 P. 431; Harvey v. Meigs, 17 Cal.App. 353, 119 P. 941.)

A contingent liability is as fully protected against fraudulent and voluntary conveyances as a claim absolute and certain even though no breach of the contract furnishing a cause of action may occur until after the execution of the conveyance. (Associated Fruit Co. v. Idaho-Oregon F. G. Assn., 44 Idaho 200, 256 P. 99; 27 C. J. 473, sec. 113; Bump on Fraudulent Conveyances, 4th ed., 503.)

AILSHIE, J. Holden, C. J., and Morgan, Budge and Givens, JJ., concur.

OPINION

AILSHIE, J.

February 20, 1922, appellants Myron L. Romig, Grace B. Romig (husband and wife) and Minnie I. Curtis (mother of the latter) executed and delivered their promissory note to respondent in the sum of $ 1200 and secured same by a mortgage on 654 acres of land in the Salmon River section of Idaho county. Payments of interest were made amounting to $ 1161.20, the last payment being made September 14, 1932. March 7, 1927, appellant Minnie I. Curtis, by deed of gift, conveyed to her son, George V. Curtis, and daughter, Grace B. Romig, certain residence property at 115 East D Street in Moscow. The deed was not recorded until June 17, 1935. As evidenced by canceled checks, admitted as exhibits in the case, Ronald Romig paid to his father, from November 6, 1932, to December 15, 1936, various sums amounting in all to $ 2,431.78. He helped his father build the house on the Moscow property and assumed a building and loan mortgage of $ 2,500, making payments each year. June 7, 1935, warranty deed to the property was given to him by his parents, Myron L. and Grace B. Romig.

This property was rented to Gale Mix who resided on it for three years, paying a monthly rental of $ 30. The rental was paid by check to M. L. Romig; canceled checks exhibited for months of June and December, 1935. Mix testified that he did not know the property was owned by Ronald Romig, or that the elder Romigs were acting as Ronald's agents. October 27, 1936, the property was damaged by fire and November 12th and 17th, following, checks for $ 500 and $ 1,000, respectively were issued to Mrs. Curtis to cover the fire loss; but she and Mrs. Romig both testified that she never received any money as a result of the fire, and had nothing to do with the checks; that she signed a release from the policy of insurance and that her daughter made the repairs on the house. The daughter testified that she cashed the check but her mother signed it; that the check "went directly to repairing the house," for a "new roof and basement and some windows." The insurance agent testified that the proof of loss following the fire was signed by Mrs. Curtis, but the check was delivered to Mrs. Romig and all dealings were with her; that he didn't see Mrs. Curtis.

As to the taxes paid on this property, an assistant to treasurer of Latah county testified that the Moscow land stood in the name of Ronald C. Romig; that the taxes were paid by Myron L. Romig. The final tax receipt shows that the property was assessed to Grace B. Romig and the Permanent Building & Loan Association; that the first half of the taxes was paid by Mrs. Romig for the Loan Association, the second half for the Loan Association. Application for tax exemption of Minnie I. Curtis, a widow, for property in Moscow described as "85-125--Frye's 2nd Addition" was approved by the Board of County Commissioners July 2, 1929. Mrs. Curtis' testimony discloses that she "paid a little personal property taxes, three or four dollars a year," but doesn't think she paid any real estate taxes.

February 28, 1935, plaintiff (respondent here) began an action for foreclosure of mortgage against appellants. Judgment of foreclosure in the sum of $ 1929.96, together with costs, was recovered...