Feltham v. Blunck

• Decision Date: 25 May 1921
• Citation: 34 Idaho 1,198 P. 763
• Parties: FRANK FELTHAM, Respondent, v. LOUIS A. BLUNCK, and FLORENCE M. BLUNCK, Appellants,
• Court: Idaho Supreme Court

198 P. 763

34 Idaho 1

FRANK FELTHAM, Respondent, v. LOUIS A. BLUNCK, and FLORENCE M. BLUNCK, Appellants,

Supreme Court of Idaho

May 25, 1921

DEED-MISTAKE-CORRECTION-TIME OF TAKING EFFECT-INTERVENING CREDITORS-FRAUDULENT CONVEYANCE-INADEQUATE CONSIDERATION-MARRIED WOMAN-ESTOPPEL.

1. A deed to correct a mistake in a former deed given for a valuable consideration takes effect as of the date of the original deed as against intervening judgment creditors of the grantor.

2. This is true even though the grantor is insolvent at the time of the correction deed.

3. Where a husband conveys real property to his wife for a valuable consideration, and a mistake is made in the description, she is not estopped in favor of judgment creditors of her husband, if she acts promptly to correct the mistake upon learning of it.

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Carl A. Davis, Judge.

Action to quiet title. Decree for defendant subject to lien. Defendant appeals. Reversed.

Decree reversed and case remanded with instructions. Costs awarded to appellant.

Richards & Haga, for Appellant.

A deed executed for the purpose of correcting the description in a former deed operates to convey title as of the date of the original deed. (Hutchinson v. Chicago & N.W. Ry Co., 41 Wis. 541; Hodges v. Moore (Tex. Civ.), 186 S.W. 415; Pittsburgh, C. C. & St. L. Ry. Co. v Beck, 152 Ind. 421, 53 N.E. 439; 24 Cyc. 999; Chapman v. Fields, 70 Ala. 403; Adams v Stutzman, 6 Ohio Dec. 612, 7 Am. L. Record, 76; Wyche v. Greene, 11 Ga. 159; 24 Am. & Eng. Ency. of Law, 275, sec. 2.)

Parties to a deed which does not correctly define the intention of the parties, can do voluntarily what a court of equity would compel them to do. (Hodges v. Moore, supra; Hutchinson v Chicago & N.W. Ry. Co., supra; Milby v. Regan, 16 Tex. Civ. 352, 41 S.W. 372.)

The mere fact that property stands in the name of another is not sufficient to estop the owner from setting up his title as against the creditors of the apparent owner. (12 R. C. L. 602.) Where the owner had no knowledge that the title to land stood in the name of her husband, and she acted promptly when she discovered it, she is not estopped to assert her title against creditors of her husband. (12 R. C. L. 605; Ann. Cas. 1914C, pp. 1067-1071, note; McKeehan v. Vollmer Clear Water Co., 30 Idaho 505, Ann. Cas. 1918E, 1197, 166 P. 256.)

The question of fraudulent intent is one of fact and not of law. (Sec. 5435, C. S.; Clark v. Olsen, 3 Cal. Unrep. 890, 33 P. 274; 6 Ency. of Ev. 105; 20 Cyc., p. 751.)

Under the laws of our state a debtor has the right to prefer any creditor, even though he is insolvent. (Bates v. Papesh, 30 Idaho 529, 166 P. 270; Pettengill v. Blackman, 30 Idaho 241, 164 P. 358; Wilson v. Baker Clothing Co., 25 Idaho 378, 137 P. 896, 50 L. R. A., N. S., 239; Capital Lumber Co. v. Saunders, 26 Idaho 408, 143 P. 1178.)

Elliott & Healy, for Respondent.

Conveyance of insolvent grantor in order to be valid as against existing creditors, must be for a valuable and adequate consideration. (Pettengill v. Blackman, 30 Idaho 241, 164 P. 358; Bates v. Papesh, 30 Idaho 529, 166 P. 270; Wright v. Craig, 40 Ore. 191, 66 P. 807; Brown v. Case, 41 Ore. 221, 69 P. 43; 20 Cyc. 509; Printz v. Brown, 31 Idaho 443, 174 P. 1012.)

Where transfer is from husband to wife fraud is to be presumed and it rests with the husband or wife to rebut this presumption by showing a valuable and adequate consideration. (Brown v. Case, supra; 56 L. R. A. 817-846, note; 12 R. C. L., pp. 515-517.)

No actual fraudulent intent is necessary to be shown where conveyance is made by insolvent debtor for an inadequate consideration. (Capital Lumber Co. v. Saunders, 26 Idaho 408, 143 P. 1178; Pettengill v. Blackman, supra; Bates v. Papesh, supra.)

A gift cannot be consummated after insolvency so as to be effective against existing creditors unless there was a visible change of ownership when the gift was made and all that remained to be done was to execute a deed. (20 Cyc. 461.)

A wife who negligently or carelessly permits her separate property to remain on the records in the name of her husband and he obtains credit on the strength of his ownership, will be estopped to assert her title as against a creditor who has been deceived by the husband. (Chaney v. Gauld Co., 28 Idaho 76, 152 P. 468; McKeehan v. Vollmer Clear Water Co., 30 Idaho 505, Ann. Cas. 1918E, 1197, 166 P. 256; Goldberg v. Parker, 87 Conn. 99, Ann. Cas. 1914C, 1059, 87 A. 555, 46 L. R. A., N. S., 1097; 12 R. C. L. 605.)

MCCARTHY, J. Rice, C. J., and Budge, Dunn and Lee, JJ., concur.

OPINION

MCCARTHY, J.

Respondent brought this action to quiet his title to forty acres described as the S. 1/2 of the SW. 1/4 of the NW. 1/4 and the S. 1/2 of the SE. 1/4 of the NW. 1/4 of section 17, T. 3 S., R. 1 W., B. M., relying on a sheriff's deed issued by virtue of a sale under execution, after judgment recovered, May 16, 1914, against appellant's former husband, Louis A. Blunck, in the sum of $ 468.60, for work which respondent had done for Blunck upon the NW. 1/4 of the NE. 1/4 of said section 17. He alleges in his complaint that the deed to the land in suit, made March 3, 1913, by Blunck to appellant, then his wife, was made to hinder, delay and defraud creditors, and prays that it be set aside.

Defendant Louis A. Blunck filed a disclaimer of any interest in said land, and did not join in the appeal to this court.

Appellant, Florence M. Blunck, answering alleges title in herself to the forty in question under a deed of March 3, 1913, which deed she claims to be merely a correction deed of a deed made to her March 25, 1912, in which the intent was to convey it to her, but which, through a mistake in the description, described other land, not owned by the grantor. There is no evidence that the mistake was other than an honest one, or that there was any collusion between Blunck and appellant. The consideration for the deed of March 25, 1912, was her act of deeding, on the same date, the NW. 1/4 of the NE. 1/4 of said section 17, to Jas. L. Northrop and Charles W. Northrop, in the dissolution settlement of a partnership between Blunck and the Northrops. She had acquired this last-mentioned forty acres as a prenuptial gift from Blunck, by deed of November 1, 1910.

At the beginning of 1911 Blunck and Charles Northrop formed a partnership for the development of 200 acres of sagebrush land--the NW. 1/4 of the NW. 1/4 of the NE. 1/4 of said section 17--into orchard. This land included the gift forty and the forty in suit. By the terms of an agreement dissolving said partnership on March 26, 1912, the Northrops were to get 100 acres including the gift forty, and Blunck 100 acres including the forty in suit. Appellant conveyed the gift forty to the Northrops. To induce her to do this, Blunck agreed to convey to her the forty in suit, and with this intention executed the conveyance of March 25, 1912, in which the mistake in description occurred. The gift forty was at that time in sagebrush, except for a few acres that had been cleared. Under the terms of the dissolution agreement Blunck was to clear, level and put this forty into orchard. On April 12, 1912, respondent entered into a written agreement with Blunck to do this work, performed it, was not paid, brought suit, recovered judgment, levied on the forty in suit and so obtained the sheriff's deed under which he claims.

The trial court found that at the time appellant conveyed her gift forty to the Northrops, and Blunck made the conveyance of March 25, 1912, the value of the gift forty was about $ 2,000, and the value of the forty in suit was about $ 8,000; also that the conveyance of the land in suit, March 3, 1913, left Blunck insolvent.

Appellant testified that she had the mistake in the deed corrected within a week after she discovered it, that she did not know respondent performed the work for Blunck upon which the judgment claim was based, nor that Blunck had agreed to put the gift forty in orchard as part consideration of the dissolution agreement. In 1911 Blunck and Northrop took care of the original gift forty the same as all the rest of the land, treating it as one body. The land in suit was put in orchard in 1911 by Blunck and Northrop operating as the Blunck Northrop Orchard Company. Appellant admitted she knew that respondent was working on the land at that time. The claim for that particular labor was placed in judgment by respondent and paid by Northrop. Appellant was on the land only once in 1912. She did not superintend the orchard or any part of it in 1912, but Blunck looked after all of it. She had no knowledge of what Blunck told others about the forty acres in suit. Blunck did not talk business with her. Respondent testified that in 1911 he plowed, leveled and put in orchard 160 acres of the partnership tract for the Blunck Northrop Orchard Company. In 1912 Blunck told respondent that he owned the land in suit and asked him for an estimate on certain buildings to be erected on it, saying that he was going to make it his home. Respondent did not know about the arrangements between Blunck and appellant and believed be could hold the land which Blunck claimed to own. He would not have done the work on the gift forty otherwise, because he regarded Blunck as poor pay for the reason that he could not get his money from him for the work done for the company. Respondent knew what land Blunck got on the dissolution agreement with Northrop. He did not testify that he examined the record or knew or relied upon what the record showed as to the title of the land in suit.

The trial court found that appellant was negligent in failing to discover the mistake in the deed of ...