Douglas-Guardian Warehouse Corporation v. Jones

• Decision Date: 22 January 1969
• Docket Number: No. 10191.,10191.
• Citation: 405 F.2d 427
• Parties: DOUGLAS-GUARDIAN WAREHOUSE CORPORATION, Appellee, v. George W. JONES and Bess A. Jones, Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

405 F.2d 427 (1969)

DOUGLAS-GUARDIAN WAREHOUSE CORPORATION, Appellee, v. George W. JONES and Bess A. Jones, Appellant.

No. 10191.

United States Court of Appeals Tenth Circuit.

January 22, 1969.

Don A. Smith, Fort Smith, Ark. (Thomas Harper, Fort Smith, Ark., on the brief), for appellant.

Gene H. Hemry, Oklahoma City, Okl., and Owen C. Pearce, Fort Smith, Ark. (David A. Stewart and Hemry & Hemry, Oklahoma City, Okl., on the brief), for appellee.

Before MURRAH, Chief Judge, PICKETT and HOLLOWAY, Circuit Judges.

MURRAH, Chief Judge.

Douglas-Guardian Warehouse Corporation, a judgment creditor, brought this diversity suit in Oklahoma to set aside conveyances of approximately 1,000 acres of land by its debtor, George W. Jones, to his wife, Bess A. Jones. Warehouse Corporation contends that these conveyances were made without any consideration for the purpose of hindering, delaying or defrauding Warehouse in its claim against Jones and were therefore fraudulent conveyances. In defense, the Joneses denied fraud, asserting that in any event Warehouse was barred by the statute of limitations. The trial court found that the conveyances were fraudulent and that the suit was brought within the statutory time. We affirm the trial court.

In the order of things, we look at the statute of limitations as the first line of defense. The relevant facts and important dates are undisputed: In 1960, Mr. Jones became individually liable on a note to Warehouse; in August, 1963, and January, 1964, Mr. Jones made the subject conveyances to Mrs. Jones; on January 30, 1965, Warehouse obtained judgment on the 1960 note; this suit to set aside the conveyances was commenced on January 25, 1967, within two years of the judgment date. The disputed question is whether 12 Okla.Stat. 95(3) (1961) with its two year limitation on fraud actions commenced to run when the conveyances were made, which would bar the suit, or not until the judgment was obtained, bringing the suit within the two year period.

There is general case law to support six different rules governing the commencement of the statute of limitations in fraudulent conveyance cases: (1) date of discovery of fraud; (2) date fraudulent conveyance was recorded; (3) date creditor's claim for debt reduced to judgment; (4) date judgment execution returned unsatisfied; (5) date fraudulent act was perpetrated; and (6) date creditor's right to enforce debt accrued. See 76 A.L.R. 864 (1932); 100 A.L.R.2d 1094 (1965); and 1 Glenn, Fraudulent Conveyances and Preferences §§ 63-89 (1940).

There is Oklahoma case law tending to support four of these rules, namely: (1) date of discovery of fraud: Martin v. Gassert, 40 Okl. 608, 139 P. 1141 (1914); White v. Exchange Nat. Bank, 172 Okl. 331, 44 P.2d 935 (1935); Brazelton v. Lewis, 192 Okl. 568, 137 P.2d 905 (1943). (2) date fraudulent conveyance was recorded: Paxton v. Hyer, 184 Okl. 407, 87 P.2d 938 (1939). (3) date creditor's claim for debt reduced to judgment: Ziska v. Ziska, 20 Okl. 634, 95 P. 254, 23 L.R.A.,N.S., 1 (1908); Indian Land & Trust Co. v. Owen, 63 Okl. 127, 162 P. 818 (1917); Rye v. McReynolds, 170 Okl. 640, 47 P.2d 897 (1935). And (4) date judgment execution returned unsatisfied: Blackwell v. Hatch, 13 Okl. 169, 73 P. 933 (1903); Akers v. Rennie, 182 Okl. 378, 77 P.2d 1112 (1938).

No case is cited to us nor have we found an Oklahoma case undertaking to reconcile the various inconsistent rules. And it is not the province of this court to undertake to settle the uncertainties and inconsistencies in Oklahoma case law. It is sufficient for our purposes that the Oklahoma federal trial judge held the statute commences to run from the date of judgment and that his view of the Oklahoma law is squarely supported by Oklahoma decisions which have been neither overruled nor distinguished. See Ziska v. Ziska, supra; Indian Land & Trust Co. v. Owen, supra; Rye v. McReynolds, supra. Indeed, this court has construed the Oklahoma cases to hold that although a suit of this nature might have been brought within two years without obtaining a judgment, the limitation is not operative until the judgment is rendered. See Dykes v. Little, 31 F.2d 742 (8th Cir.1928), affirmed on this point, Keaton v. Little, 34 F.2d 396 (10th Cir.1929)....