Farmers' & Merchants' Bank v. Daiker
| Decision Date | 06 October 1914 |
| Docket Number | No. 29405.,29405. |
| Citation | 148 N.W. 1020,166 Iowa 728 |
| Court | Iowa Supreme Court |
| Parties | FARMERS' & MERCHANTS' BANK v. DAIKER ET AL. |
OPINION TEXT STARTS HERE
Appeal from District Court, Carroll County; F. M. Powers, Judge.
Action in equity in the nature of a creditor's bill to subject certain land to the payment of a judgment obtained by plaintiff against F. W. Daiker and Theresa Daiker. There was a decree for plaintiff, and defendants appeal. Reversed.George G. Bowen and Brown McCrary, both of Carroll, for appellants.
E. A. Wissler and Lee & Robb, all of Carroll, for appellee.
On October 28, 1910, plaintiff obtained a judgment against F. W. Daiker and his mother, Theresa Daiker, in the district court of Carroll county. On the same day execution was issued thereon, and immediately or very soon returned unsatisfied. On October 31, 1910, this action was begun; the plaintiff alleging that, shortly before the entry of said judgment, the defendant Theresa Daiker fraudulently and without consideration conveyed a valuable tract of land owned by her in said county to her son Peter Daiker, and that such conveyance was made by her and received by said grantee with intent to defraud, hinder, and delay the plaintiff in collecting its said debt. Upon these allegations it was prayed that the conveyance be set aside and plaintiff's judgment be enforced by a sale of the land. Defendants admit the rendition of the judgment, admit the prior conveyance of the land to Peter Daiker, and deny all charges of wrong and fraud made against them in the petition. They further allege that said judgment defendants had appealed from said judgment to the Supreme Court, and had filed a good and sufficient supersedeas bond in said cause, and the bond had been duly approved. Issue having thus been joined, it appears that the case was continued upon the docket without further action therein for several terms; meanwhile the appeal in the original case was prosecuted to completion, and the judgment was reversed on the ground that the debt sued upon was not due when that action was begun. It further appears that, after the reversal, further proceedings were had in the district court, where on October 28, 1912, another judgment was rendered against F. W. Daiker and Theresa Daiker for the amount of the same alleged debt. Thereafter plaintiff filed in this case what is denominated a supplemental petition, though it is in fact an amendment by which the allegations of the original petition are so changed as to make its reference to a judgment against F. W. Daiker and Theresa Daiker apply to the judgment last rendered instead of to the first. The defendants answer separately.
To avoid repetition, it may be said that the several defenses present substantially the following alleged facts: The defendants John Daiker and Theresa Daiker, husband and wife, are persons of advanced age, and F. W. Daiker and Peter Daiker are their children. It is claimed that about the time Peter Daiker became of age, and many years before the creation of the debt, which plaintiff seeks to enforce, was contracted, he entered into an agreement with his parents by which he was to have the land in consideration of his undertaking to care for and maintain them during the remainder of their lives. It is further claimed that, acting upon such agreement, Peter took possession, management, and control of said land and for 28 years has continued therein openly and notoriously, thus imparting to plaintiff and the world constructive notice of his rights in the premises, and that the services he has so rendered in consideration of said land is equal to or more than its market value at that date, and that the conveyance made to him was given and received in good faith and in consummation of the agreement in fulfillment of which he has given all the time and labor of his adult years.
The foregoing is a sufficient statement of the issues upon which the merits of the case must turn.
[1] I. Passing the many technical and collateral questions of pleading and practice which have been argued by counsel, we take up the vital inquiry whether the transfer of the land to Peter Daiker was either actually or constructively fraudulent. Of the soundness of the legal proposition on which appellee relies, that a conveyance of all one's property liable to execution, upon consideration that the grantee will maintain the grantor in the future or during life, is at least constructively fraudulent as against creditors, there can be no doubt. It is equally well settled in this and many other states that the term “creditors,” as used in the statement of the rule, has reference only to existing creditors, and this is true even though a disposition of property, upon promise of future support, be treated as purely voluntary. The subject was discussed and the precedents reviewed by this court in Brundag v. Cheneworth, 101 Iowa, 256, 70 N. W. 211, 63 Am. St. Rep. 382, and the conclusion therefrom stated as follows:
The foregoing quotation states the rule so clearly and unequivocally as to render unnecessary further reference to authorities upon the fundamental proposition that, generally speaking, only existing creditors can successfully avoid a voluntary conveyance, gift, or other disposition of property.
[2] II. Whether the appellee herein is entitled to be classed as an existing creditor depends entirely upon the further question whether the rights of Peter Daiker, as against the creditors of his mother, are held to date from the actual making and delivery of her deed to him, or from the time the agreement between them was made and he took possession and control of the land.
Counsel for appellee assume in argument that we must look alone to the deed, and, as this was confessedly made after the creation of the indebtedness which is sought to be enforced against the land, appellee was therefore clearly an existing creditor. To this we are unable to agree. It is shown so clearly as to be beyond fair question that very soon after Peter Daiker reached his majority there was an agreement between him and his parents that he was to have the land in consideration of his undertaking to remain upon it, control and manage it, and support and maintain his parents during the remainder of their lives. It is true that the testimony is somewhat involved and somewhat awkwardly stated, and that, upon examination and cross-examination of the parties, the words “wages” and “rent” are sometimes employed. The parents are of foreign birth, the mother still speaks only in her native tongue, and all of them use words apparently without full and clear comprehension of their exact technical import; yet taking the evidence as a whole, including that given by disinterested witnesses, we can come to but one conclusion, that Peter was to have the land upon the consideration above mentioned. It is shown without dispute that he did then assume charge of the land, and that ever since, and for a period of 28 years, he has used it in all respects as his own, rendering no account to his parents, but has supported and cared for them and supplied their needs as occasion has required. This situation was open and notorious to their neighbors and to the public, and plaintiff admits, by the testimony of its officers, that, when the mother's name was obtained upon the notes of F. W. Daiker, it knew that Peter was in possession, farming the land. Such possession and control were notice to the world of the right or claim of right under which they were exercised, and only those who were creditors when such transaction was had and such possession taken are entitled to rank as existing creditors, and the date of the deed subsequently made in pursuance of or consummation of the original agreement is not a matter of decisive importance. Stated in other words, the contract being valid between the parties themselves, and the rights of no existing creditor being involved, and notice of such contract having been given to the world by Peter's assumption of possession and exclusive control, it follows of necessity that, in the absence of elements of estoppel against him, his rights in the premises cannot be defeated or destroyed by subsequent creditors of his parent.
A somewhat similar question was before this court in Cloud v. Malvin, 108 Iowa, 52, 75 N. W. 645, 78 N. W. 791, 45 L. R. A. 209. Where an action was brought in the nature of a creditor's bill to subject certain tracts of land to payment of a judgment against Sarah Malvin. Before she contracted the debt on which the judgment was rendered, Sarah Malvin had agreed with three of her sons that, if they would stay at home and operate the farm, she would leave them a specified tract of 60 acres. In pursuance of...
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