Burdsall v. Waggoner

• Decision Date: 01 October 1878
• Citation: 4 Colo. 256
• Parties: BURDSALL v. WAGGONER et al.
• Court: Colorado Supreme Court

4 Colo. 256

BURDSALL v. WAGGONER et al.

Supreme Court of Colorado

October, 1878

Messrs WELLS, SMITH & MACON, and Mr. S. S. WALLACE, for appellant.

Messrs FRANCE & ROGERS, for appellees.

STONES J.

This is a case in chancery to set aside a conveyance of real estate from Waggoner, one of the defendants, to Moss, the other defendant, upon the ground of alleged fraud against the complainant creditor.

Upon a hearing in the court below upon the testimony taken before the master, the bill was dismissed. The assignment of error is, that the court erred in dismissing the bill and in not rendering a decree in accordance with the prayer for relief. The evidence tends to show that the grantor made the conveyance with a fraudulent intent to hinder and defeat the complainant in the recovery of his debt in his suit at law which was pending when the conveyance was made. There are several circumstances in the case which tend to cast suspicion upon the transaction, but we think the evidence is insufficient to make out a case upon the pleadings. To set aside a conveyance for fraud against creditors, something more than a fraudulent intent upon the part of the grantor is required. Want of consideration or knowledge of the fraud on the part of the grantee must also be shown, or there must be some secret trust between the parties, or other circumstances which will operate to debar the grantee from protection as a purchaser. The bill charged the grantee with knowledge of and participation in, the fraudulent intent of the grantor, as well as a total want of any consideration whatever. These allegations are denied in the separate answers of the defendants, and no proof was made, nor was any evidence attempted to be introduced touching any of these averments.

Our statute concerning frauds, R. S., ch. 37, is a substantial adoption of the statutes of 13th and 27th Eliz., but these latter are so far modified by the 20th and 21st sections of our statute as to affect both the mode and extent of proof required to avoid a conveyance on the ground of fraud. By these sections the fraudulent intent is to be deemed a question of fact and not of law; a conveyance shall not be considered fraudulent for want of consideration alone, nor shall the title of a purchaser for a valuable consideration be impaired unless it appear that he had notice of the fraudulent intent of his grantor.

In this case the conveyance not having been shown to be a voluntary conveyance, it was essential to show that the grantee had notice of the fraud of his grantor. Johnson v. Johnson, 3 Metc. 65; Myers v. Kinzie, 26 Ill. 38.

There is another point which is also fatal to appellant's case. There is no averment in the bill of insolvency of the defendant debtor, or that there was not property other than that alleged to be fraudulently transferred, out of which the judgment at law could have been satisfied. The bill is in the nature of a creditor's bill, and to entitle the complainant to maintain a bill of this character, he is usually required to show not only a judgment obtained, but an execution sued out with a return of nulla bona, or that the writ is unsatisfied in whole or in part. Alexander v. Tams, 13 Ill. 224; Heacock v. Durand, 42 id. 233; Child v. Brace, 4 Paige, 315.

To this general rule there are some exceptions (Steere v. Hoagland, 39 Ill. 265), but, even where such return is not necessary, the complainant must, by proper averment, lay sufficient ground for the relief he seeks in a court of equity.

The bill should show not only that the debtor has made a fraudulent disposition of his property, but that such disposition embarrasses him in obtaining satisfaction of his debt or judgment; there must be an averment of want of property sufficient to satisfy such debt other than the property which is alleged to have been fraudulently conveyed, for if there be other property sufficient, then the resort to equity is unnecessary. Harris v. Taylor, 15 Cal. 348; Dunham v. Cox, 2 Stockton (N. J. Eq.), 467; Thomas v. Mackey, 3 Col. 293; Crockett v. Lee, 7 Wheat. 527.

In the case of Dunham v. Cox, supra, this doctrine is clearly laid down and assented to unanimously by the whole bench...