Deering v. Holcomb

• Decision Date: 13 December 1901
• Citation: 67 P. 240,26 Wash. 588
• Parties: DEERING v. HOLCOMB. [1]
• Court: Washington Supreme Court

67 P. 240

26 Wash. 588

DEERING v. HOLCOMB. ^[1]

Supreme Court of Washington

December 13, 1901

Appeal from superior court, Pacific county; H. S. Elliott, Judge.

Suit by William Deering against Ida Holcomb and another to set aside fraudulent conveyances. From a judgment in favor of the defendant Holcomb, the plaintiff appeals. Affirmed.

H. W. B. Hewen, for appellant.

Welsh &amp Thorp, for respondent.

WHITE J.

In 1887, in Minnesota, the appellant recovered a judgment against George O. Holcomb and his father, S. Holcomb, for $445.66. On this judgment, on the 18th of November, 1893, in the superior court of Washington, for the county of Pacific judgment was recovered against said George U. Holcomb for $766.08, on which there was due and unpaid at the time this action was brought the sum of $1,142. Execution was not issued on this judgment until August 9, 1898, and it was returned unsatisfied September 13, 1898. This judgment has been renewed. Ida Holcomb was the wife of George U. Holcomb at the time said judgment was recovered against him in Minnesota, and lived there with him until April, 1886, when he abandoned her and their infant child and came to this satate. In 1889 he wrote to the respondent, Ida Holcomb that, if she would come and live with him, he would never abandon her again, but would provide for, and make suitable provision for, her and her child. Under this promise she rejoined her husband in this state in 1889. In 1889, 1890 and 1891, George U. Holcomb and respondent lived at South Bend, Wash.; and George U. was the general manager and a director of the South Bend Land Company, a corporation largely engaged in dealing in real estate and town lots. He was very influential in the management of the company, and was one of its promoters. In 1890 the value of the holdings of this company was $50,000, and on April 2lth of that year George U. Holcomb owned 699 out of 2,400 shares of the capital stock of the company. On that day he surrendered to the company the said 699 shares, and there was reissued by the company in lieu thereof 399 shares to respondent, and 300 to said George U. From that time said respondent held and claimed to own said 399 shares, with the exception of 1 share which she transferred to Mr. Stratton, who acted as her attorney from 1895 or 1896 in the affairs of the company. On July 5, 1893, George U. sold and transferred his 300 shares, except 1 share, to the First National Bank of South Bend. From March 2, 1891, to October 4, 1893, dividends on the capital stock of said company amounting to $201,300 were paid. The first three dividends amounted to $120,000, and the share of the respondent in this, as shown by the books of the company, was paid to her; and her share of the balance, as shown by the books of the company, was paid to George U., who was also paid the dividends on his own stock. In 1891, 1892, and 1893, George U. had on deposit in his own name in the banks of South Bend large sums of money, and until the latter part of 1893 he was solvent,--had more than sufficient money to pay his debts. In April, 1890, certain lots were conveyed to respondent by the South Bend Land Company for the consideration of $1,500, as expressed in the deed; and the deed for these lots was recorded in the auditor's office of Pacific county April 21, 1890. In 1890, while respondent and her husband were living together, there was constructed on this property a residence costing $6,000, in which George U. and the respondent resided until George U. left the state, in 1894. Various other lots in South Bend were conveyed to the respondent by the South Bend Land Company. The deeds for the same were recorded in the auditor's office of Pacific county immediately after the conveyances were made,--generally at the request of the South Bend Land Company. Three of these deeds were recorded April 14, 1890, one August 8, 1891, one November 12, 1891, and one September 4, 1896. Lots in South Bend by another grantor were conveyed to respondent. The deed for the same was recorded in the auditor's office of Pacific county on February 13, 1890. The residence of George U. Holcomb and wife was well and expensively furnished, the furniture being bought in 1890. In 1890 35 shares, of the par value of $100 each, of the capital stock of the First National Bank of South Bend, were issued to the respondent; and the same were in May, 1894, transferred to George U. Holcomb, who afterwards sold the same. In May, 1894, George U. Holcomb and respondent were divorced. The transfer of the bank stock was made while the divorce proceedings were pending, the said George U. then agreeing that all of the property mentioned in the complaint was the separate property of the respondent. The appellant was ignorant of the whereabouts of George U. Holcomb after he left Minnesota until October, 1891. When, in October, 1891, he found out that George U. Holcomb was at South Bend, he at once commenced efforts to realize on the Minnesota judgment, and made arrangements with M. D. Egbert, an attorney at South Bend, to look after his interests; and since 1891 M. D. Egbert and Hewen & Stratton, attorneys at South Bend, under the employment of appellant, have been looking after the interest of the appellant in his claim against George U. Holcomb. The attorneys named were the attorneys who recovered the judgment in 1893 in the superior court of Pacific county. The present action was commenced October 18, 1898, by H. W. B. Hewen, Esq., of Hewen & Stratton, as attorney for the appellant. The appellant alleged in his complaint that respondent claims all of the above-mentioned property as her separate property, and not as community property. This the respondent admits in her answer. The appellant further avers that, after the contraction of the debt on which the aforesaid judgments were recovered, George U. Holcomb and the respondent fraudulently confederated and conspired together for the purpose of hindering, delaying, and defrauding the appellant in the collection of his said debt, and for the purpose of defeating and preventing its collection, by the transfer, without any consideration, of said property to said respondent, and that all of the aforesaid property, in pursuance of said conspiracy, was put in the name of the respondent, but that at all times George U. Holcomb was, and still is, the true and beneficial owner of said property. Appellant further alleges in his complaint that he was ignorant of the fraudulent agreement and the frauds alleged in making said conveyances until about July, 1897, and he has used and needed the time since July, 1897, in fully investigating the same. It is further alleged that he was ignorant of the whereabouts of said George U. Holcomb from 1887 until 1891, although he made diligent efforts to discover the same. The appellant prays that the aforementioned shares of stock in the South Bend Land Company, the real estate conveyed to the respondent, and the furniture and house, be charged with the payment of his judgment. The answer denies the frauds alleged, and alleges that the property mentioned in the complaint was and is the separate property of the said respondent. Respondent claims to have paid her husband in 1890 $1,000 for the 399 shares of stock in the South Bend Land Company, and for the five lots where the residence was erected; and she further claims that the other property was property purchased with the dividends from the stock of the South Bend Land Company owned by her, and--a small portion of it--out of the allowance made for family support. She claims to have earned part of the money with which she bought the stock as a school teacher in Minnesota when she was abandoned by her husband, and to have received a part of it as a gift from her mother and brother. She further pleads that the debt upon which the judgment was recovered was the separate debt of George U. Holcomb, and not a community debt. She also alleged that in 1894 she was divorced from George U. Holcomb, and that pending said divorce it was agreed between her and George U. that the property in controversy was her separate property. She further pleads 'that the cause of action set forth in appellant's complaint did not accrue within three years before the commencement of the action, and that for more than three years prior to the commencement of the action appellant personally, and also by and through his agents and attorneys, knew all of the things which he alleged in his complaint where the facts which constituted the fraud and fraudulent agreement on the part of the respondent, Ida Holcomb, and George U. Holcomb, and each of them, and others, and said cause of action is barred by the statute of limitations.' The appellant denied the allegations of the answer relative to the statute of limitations, and in other particulars. The court found on all the issues in favor of the respondent, and dismissed the action.

We will first consider the evidence in support of the statute of limitations, and the rule of law applicable to the same. The statute of limitations, which the appellant seeks to avoid by the averment in his complaint that he was ignorant until 1897 of the fraudulent agreement therein alleged between respondent and George U. Holcomb, and which is relied upon by the respondent, is as follows: 'Within three years: * * * (4) An act for relief upon the ground of fraud, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.' 2 Ballinger's Ann Codes & St. § 4800. The statute of limitations is not an unconscionable defense. Morgan v. Morgan, 10 Wash. 99, 38 P. 1054. 'Statutes of limitation are vital to the welfare of society, and are favored in the law. They are...