Butler v. Thompson.
| Decision Date | 14 December 1898 |
| Citation | 45 W.Va. 660 |
| Parties | Butler v. Thompson. |
| Court | West Virginia Supreme Court |
Where a suit is brought by a creditor assailing a transfer of property by his debtor as fraudulent and made with intent to hinder, delay, and defraud him in the collection of his debt, the proof of fraud rests on the party who alleges it, but circumstances may exist which will shift the burden of proof from the party impeaching the transaction onto the party upholding it. (p. 667).
A conveyance made by a party of his entire property during the pendency of a suit brought to recover judgment against him on a debt is a badge of fraud. (p. 668).
Where the creditor of a grantor assails in a chancery suit a. deed made by a grantor as voluntary and fraudulent, the recitals of the deed that the grantee had paid the grantor a valuable consideration are not evidence against the creditor of such payment, and the burden of proving that a valuable consideration was paid by the grantee to the grantor is upon the grantee, but the burden of proving that the deed was fraudulent in fact is upon the creditor. (p. 666).
Where a creditor files a bill to set aside as fraudulent a deed executed by his debtor which recites the payment of a valuable consideration, and such creditor's debts are older than the deed, the burden is on the grantee to prove the payment of the purchase money, or, if the deed was executed for the payment of existing debts, to prove the validity of such debts. (p. 667).
Where a conveyance of property by an uncle to his nephew is assailed as fraudulent as to creditors, the parties are held to a fuller and stricter proof of the consideration and of the fairness of the transaction than if the conveyance was between strangers. (p. 608).
Appeal from Circuit Court, Tucker County.
Bill by J. P. Butler against J. F. Thompson to set aside a fraudulent conveyance from a decree dismissing the bill, complainant appeals.
Reversed.
W. B. Maxwell and C. O. Strieby, for appellant. Dayton & Dayton and Fred O. Blue, for appellee.
On the 27th day of December, 1892, J. P. Butler obtained a judgment against John F. Thompson for the sum of four hundred and ten dollars and sixty cents, before a justice of the peace of Tucker County, on which an execution was issued and placed in the hands of a constable, and returned by him, "Money not made, and no property found." Said Butler thereupon filed his bill in the circuit court of said county, alleging therein that at the time he brought his suit before the justice said Thompson owned a very valuable shingle and board mill worth about one thousand and five hundred dollars situated in said county, and alsoowned another saw mill worth about one thousand dollars situated in the town of Davis, and other valuable personal property, such as saw logs, shingles, boards, lath, and other lumber, and lumbermen's tools, of the probable value of two thousand dollars; and, in addition to said property. Thompson and his wife were joint owners of a valuable house and lot in the said town of Davis, known as lot No. 305 on the plat of said town; that, during the pendency of said suit before the justice, Thompson, on the 15th of December, 1892, pretends to have sold the whole of said property to his nephew Frank E. Thompson, receiving six hundred dollars cash for said house and lot in Davis; that he is not informed what said F. E. Thompson claims to have paid for said personal property, but that he now claims the whole thereof by the terms of his purchase; that the pretended transfer of said property, which was intended to cover all the property both real and personal owned by said John F. Thompson, was made for the purpose of hindering, delaying, and defrauding the creditors of of said J. F. Thompson, and especially for the purpose of defrauding the plaintiff, and that said Frank E. Thompson had full notice and knowledge of his fraudulent intent and assisted and participated therein, and is now endeavoring to assist in the consummation of said fraudulent intent, and is endeavoring to prevent the plaintiff from recovering the amount of his said judgment; that J. F. Thompson and his family yet have possession of the house, and occupy the same, which was conveyed to F. E. Thompson as aforesaid; that said J. F. Thompson still manages and controls as his own the mills and personal property transferred by him to F. E. Thompson, and, so far as any visible sign of change of ownership goes, there has been none, except that F. E. Thompson claims the property as his, and J. F. Thompson claims to have sold the same; that, in their hurry to make transfers of all the property owned by said J. F. Thompson, a one-seventh interest in lot No. 20 in Davis was overlooked, and said J. F. Thompson is the owner thereof, as shown by deed from S. Maude Thompson to said J. F. Thompson and others; that the plaintiff caused his said judgment to be promptly docketed in said county, and the same is a lien upon the one-seventh undivided interest in said lot No. 20; that the rents and profits of the interest of said J. F. Thompson in lot No. 20 would not satisfy plaintiff's judgment in five years; that there are no other liens by judgment or otherwise against said lot No. 20, and no reference would be necessary to ascertain the liens and priorities; that no part of said judgment has even been paid; and he prayed that the interest of John F. Thompson in said lot might be sold to satisfy said lien, and in case it did not sell for enough to satisfy said judgment and costs that then the deed from John F. Thompson and wife to Frank E. Thompson be annulled, set aside, and canceled as fraudulent as to the one-half interest of said J. F. Thompson therein, and that the pretended sale and transfer of his personal prop- erty to Frank E. Thompson be set aside as fraudulent, the interest of J. F. Thompson in said lot sold, and F. E. Thompson required to account for the value of said personal property, or a sufficient amount to satify the plaintiff's demands and costs. The defendant, J. F. Thompson, answered the plaintiff's bill, suggesting that he should amend it and make the Davis Hardware & Furniture Company, a corporation, an additional party, for the reason that, at the time the lot mentioned in plaintiff's bill as No. 20 in Davis was purchased by respondent and six others, it was the purpose and intention of said parties to form said corporation for the purpose of carring on a merchantile business, and respondent and six others were the promoters of said corporation, and said lot was purchased by them for said corporation before the charter was granted; that it was paid for by the promoters, but as soon as said charter was granted the same was by verbal contract turned over to said corporation, and said promoters were paid for their outlay in purchasing it; that said corporation took possession of said lot and improved it by the erection of valuable buildings thereon, and from that time, long before the recovery of plaintiff's judgment, said property has been in possession of said corporation, and respondent has no interest therein; that the conveyance to respondent and six others was nothing but a trust for said corporation; that the possession and notorious claim of title by said corporation to the property was notice to said plaintiff, and no decree can be entered in this case affecting said property until said corporation is made a party. At February rules, 1894, the plaintiff filed an amended bill making said corporation a party, and repeated his allegation as to his being a creditor of said John F. Thompson, and his right to have his interest in said land subjected to sale to satisfy his judgment; and alleged that, while it might be true that said real estate was purchased for and intended to be used by said corporation, it was never the intention that said real estate was to be conveyed to said corporation, but was intended to be held by the grantees; that while the agreement to form said corporation was made March 21, 1892 and recorded the 24th of March, the certificate was issued on April 2, and recorded May 11, 1892, and the deed to J. F. Thompson and others was acknowledged on the same day and was not delivered for more than forty days thereafter, and was not recorded until June 22d, and said J. F. Thompson has never conveyed his interest in said land to said corporation, and he has the right to have the same sold to satisfy his judgment. Said corporation filed its answer denying that J. F. Thompson had any interest in said lot No 20, and. adopted the answer of J. F. Thompson thereto; and J. E. Thompson in his answer to said amended bill claimed that he made a bona fide sale to Frank E. Thompson for the purpose of paying his debts, and offered plaintiff his pro rata share, which he declined to receive; denied any interest in said lot, and claimed that he was only a trustee for said company. Frank E. Thompson also answered, denying the allegations of the bill as to himself, and denying that J. F. Thompson remained in possession of the property after the sale to him. These answers were replied to generally, depositions were taken on behalf of the defen dant J. F. Thompson, and on March 14, 1895, the cause was heard, and the bill dismissed. The plaintiff obtained this appeal.
The only error assigned is as to the action of the court in...
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