Cahill-Mooney Const. Co. v. Ayres, CAHILL-MOONEY

• Decision Date: 06 August 1962
• Docket Number: No. 10354,CAHILL-MOONEY,10354
• Citation: 373 P.2d 703,140 Mont. 464
• Parties: CONSTRUCTION COMPANY, a Corporation, Plaintiff and Appellant, v. Roy R. AYRES and Verna H. Ayres, his wife, and C. E. Ayres and Oneita Ayres, his wife, Defendants and Respondents.
• Court: Montana Supreme Court

Page 703

373 P.2d 703

140 Mont. 464

CAHILL-MOONEY CONSTRUCTION COMPANY, a Corporation, Plaintiff and Appellant, v. Roy R. AYRES and Verna H. Ayres, his wife, and C. E. Ayres and Oneita Ayres, his wife, Defendants and Respondents.

No. 10354.

Supreme Court of Montana.

Submitted April 3, 1962.

Decided Aug. 6, 1962.

Morrow & Nash, Bozeman, Corette, Smith & Dean, Butte, John E. Corette, III (argued orally), Butte, for appellant.

Lovelace, Horken & Berg, Bozeman, Ben E. Berg, Jr. (argued orally), Charles F. Angel (argued orally), Bozeman, for respondents.

JAMES T. HARRISON, Chief Justice.

Appeal from a judgment of dismissal entered in the district court of the eighteenth judicial district, Gallatin County, following an order of the court sustaining special demurrers filed by the defendants and the refusal of the plaintiff to further plead.

The complaint herein set forth three causes of action. The first alleged that the defendant Roy R. Ayres was indebted to the plaintiff in a specified sum of money.

The second cause of action set forth the allegations as to the execution of certain mortgages upon the described property by the defendant Roy R. Ayres to the defendants C. E. and Oneita Ayres, and a conveyance of the same property by defendant Roy R. Ayres to his wife, Verna H. Ayres, and that by reason of the mortgages and deed the defendant Roy R. Ayres became insolvent, and that each of the mortgages and the deed was made without a fair consideration.

The third cause of action, after certain reallegations of matters contained in the previous two causes of action, alleged that the defendant Roy R. Ayres at the time of each of the mortgages was engaged in business and that after their execution he had an unreasonably small capital in his business.

The prayer sought judgment against Roy R. Ayres for the amount of the indebtedness; that the mortgages be set aside, annulled and held for naught; that the deed be set aside, annulled and held for naught; and for costs and such other and further relief as may be just and proper in the premises.

Separate and special demurrers were filed by Roy R. Ayres, by C. E. Ayres and Oneita Ayres, and by Verna H. Ayres, all upon the ground that the causes of action were improperly united in that they belonged to different classes enumerated in section 93-3203, R.C.M.1947, and for the further reason that the first cause of action affected only Roy R. Ayres and did not affect all of the parties defendant.

These separate and special demurrers were each sustained and plaintiff granted time in which to further plead. To this order plaintiff filed exception and stated it would not amend its complaint and would stand upon it. Thereafter judgment was entered from which this appeal is taken.

In this court respondents have filed a motion to dismiss, predicated upon two grounds. The first is that the judgment was not appealable because it was a voluntary one based on the order sustaining the special demurrers, and secondly, that the appeal is not taken from such a judgment or order as is enumerated in section 93-8003, R.C.M.1947.

Respondents in support of their motion contend that the dismissal was a voluntary one, but we are not inclined to adopt such view. They further contend that the judgment is simply an intermediate ruling and is not a final judgment, and seek to differentiate between the general demurrers and special demurrers.

It has long been the rule in Montana that a judgment entered following the sustaining of a demurrer, when the appellant has elected to stand upon his pleading, is appealable under section 93-8003, R.C.M.1947. See McLean v. Dickson, 58 Mont. 203, 190 [140 Mont. 467] P. 924; Sorrels v. Ryan, 129 Mont. 29, 30, 281 P.2d 1028; Monarch Lumber Co. v. Haggard, Mont., 360 P.2d 794.

We hold the motion to dismiss is without merit and the same is denied.

As to the merits of the appeal it is respondents' contention that section 93-3203, R.C.M.1947, which provides in part that, 'The causes of action so united must all appear on the face of the complaint to belong to one only of these classes, and must affect all the parties to the action' is controlling and that there is a misjoinder where one of the causes of action does not affect all of the parties.

Appellant, on the other hand, contends that the type of action and joinder of the causes of action here involved are authorized by the specific provisions of the Uniform Fraudulent Conveyance Act, being section 29-101 et seq., R.C.M.1947.

We have not previously considered the Uniform Fraudulent Conveyance Act so far as the contentions here present are concerned.

The Act was adopted in Montana in 1945. The Act had been approved by the National Conference of Commissioners on Uniform State Laws in 1918 and submitted to the various state legislatures for consideration. The following year, 1919, it was adopted by several states including South Dakota, Michigan and New Jersey. Minnesota followed in 1921, New York in 1925, and California in 1939, to mention a few of the states in which it had been in effect prior to our adoption.

We have long observed in our decisions that where a statute is similar to one in a sister state that we should give consideration to the construction which it had received by the courts of the state where it had been previously adopted. Roberts v. Roberts, 135 Mont. 149, 338 P.2d 719, and cases cited therein. That such construction is not binding upon this court is likewise true. Kujich v. Lillie, 127 Mont. 125, 260 P.2d 383.

In 1929 in the case of the American Surety Co. v. Conner, 251 N.Y. 1, 4, 5, 6, 7, 166 N.E. 783, 65 A.L.R. 244, in an opinion written by Chief Justice Cardozo, that court stated:

'A question of procedure confronts us at the threshold. Neither the bank nor its assignee, the plaintiff, had recovered judgment against Conner when this action was begun. In the absence of enabling statute, it has been the practice of equity to refuse relief against a conveyance in fraud of creditors till the suitor has recovered a judgment at law establishing the debt. [Citing cases]. * * *

'* * * Article 10 of the Debtor and Creditor Law is substantially the same as the Uniform Fraudulent Conveyance Act, prepared by the Commissioners for the Promotion of Uniformity of Legislation in the United States, and is to 'be so interpreted and construed as to effectuate its general purpose to make uniform the laws of those states which enact it' [Citing cases.]. * * *

'We think the effect of these provisions is to abrogate the ancient rule whereby a judgment and a lien were essential preliminaries to equitable relief against a fraudulent conveyance. The Uniform Act has been so read in other states. [Citing cases.]. Decisions cited to the contrary were made without reference to the statute and without professing to construe it. See e. g., Lipman v. Manger, 185 Wis. 63, 200 N.W. 663. The reading seems to be inevitable, aside from any precedent. The act is explicit that a creditor may now maintain a suit in equity to annul a fraudulent conveyance, though his debt has not matured. It is not believable that a creditor with a debt already due was to be placed in a less favorable position, or beset by greater obstacles. For the one as for the other, the path is to be cleared of harassing impediments to the swift pursuit of justice. The act in its definition of a creditor seeks a rule of uniformity, and in so doing levels distinctions that at times had been the refuge of the dilatory debtor. It did not level them at the beginning to restore them later on. Certainty would, indeed, have been promoted if it had said in so many words that judgment and a lien should no longer be essential. We think it said as much, however, by fair and natural implication. The creditor may reject the aid of equity, and levy attachment or execution at law (section 278, subd. b), as he might before the statute. He may seek the aid of equity, and without attachment or execution, may establish his debt, whether matured or unmatured, and challenge the conveyance in the compass of a single suit. This he might do, even before the statute, if the debtor waived compliance with the preliminary conditions [Citing cases.] What once he might do of favor, he now may do of right. Questions may arise hereafter as to the proper mode of trial where the debt is in dispute [Citing cases.] or as to the proper form of judgment in the event that there are successive suits or several and competing creditors [Citing cases.]. The creditor who acts under section 278 is to set aside the conveyance 'to the extent necessary to satisfy his claim,' but when he acts under section 279, the restriction, if it exists, is implied and not expressed. The solution of these difficulties and others of like order may be postponed till they develop. Enough for present purposes that the plaintiff has a standing to challenge the conveyance.'

Later decisions in New York followed the principle that the right to seek a money judgment is merely collateral to the primary right to set aside the conveyance. Shugerman v. Sohn, 255 App.Div. 866, 7 N.Y.S.2d 587; Home Indemnity Co. v. Filyork Holding Corp., 258 App.Div 962, 16 N.Y.S.2d 726; Henry v. The First Nat. Bank of Ardsley, [Sup.] 110 N.Y.S.2d 115.

The Supreme Court of Minnesota in 1938 in Lind v. O. N. Johnson Co., 204 Minn. 30, 38, 39, 282 N.W. 661, 119 A.L.R. 940, followed the reasoning set forth in the American Surety Co. case, supra [251 N.Y. 1, 166 N.E. 783], when it stated:

'In connection with the problem here presented the uniform act brings for solution the following questions: (1) Could plaintiff have assailed the 1928 transfer before he obtained a judgment, and, if so, was he obliged to pursue such a course under penalty of the statute of limitations running from the time the transfer could first be impeached? (2) Does the act abolish the time-honored practice of securing judgment and having execution...