First National Bank v. Pressley

• Decision Date: 05 September 1940
• Docket Number: Record No. 2281.
• Parties: FIRST NATIONAL BANK OF BLUEFIELD, AND RECEIVERS FOR DICKENSON COUNTY BANK v. W. W. PRESSLEY, ET ALS.
• Court: Virginia Supreme Court

Page 25

176 Va. 25

FIRST NATIONAL BANK OF BLUEFIELD, AND RECEIVERS FOR DICKENSON COUNTY BANK v. W. W. PRESSLEY, ET ALS.

Record No. 2281.

Supreme Court of Virginia, Staunton.

September 5, 1940.

Present, Campbell, C.J., and Holt, Hudgins, Gregory, Eggleston and Spratley, JJ.

1. FRAUDULENT AND VOLUNTARY CONVEYANCES — Power of Insolvent to Dispose of Property — Fraudulent Intent of Grantor, Consideration and Good Faith of Purchaser. — Insolvency does not deprive the owner of the right to dispose of his property, unless the sale or transfer is made with the intent to delay, hinder, or defraud his creditors; and the law does not then invalidate the title of the purchaser or transferee if the sale or transfer is for valuable consideration, and the purchaser or transferee has no notice of the fraudulent intent of the grantor.

2. FRAUDULENT AND VOLUNTARY CONVEYANCES — Badges of Fraud — Relationship of Parties and Insolvency of Grantor. — The relationship of the parties and the insolvency of the grantor in a deed do not of themselves constitute badges of fraud and relieve the creditors of the grantor from the burden of proving the charges of fraud set forth in their pleadings.

3. FRAUDULENT AND VOLUNTARY CONVEYANCES — Fraud Not Presumed — Burden of Proof. — In an action to set aside a fraudulent conveyance fraud is never presumed, but must be clearly and distinctly proved. Yet, when a prima facie case of fraud has been shown, the burden shifts and the defendant must establish the bona fides of the transaction.

4. FRAUD AND DECEIT — Burden of Proof — Fraud Need Not Be Expressly Shown. — While fraud must be clearly proved by the person who alleges it, it is not necessary that it should be expressly shown.

5. FRAUD AND DECEIT — Evidence — Transaction Itself as Proof of Fraud. — A transaction may, of itself, and by itself, furnish the most satisfactory proof of fraud, so conclusive as to outweigh the answer of the defendants, and even the evidence of witnesses.

6. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Scruting of Transactions — Presumptions and Burden of Proof. — Transactions between husband and wife must be closely scrutinized to see that they are fair and honest, and not merely contrivances resorted to for the purpose of placing the husband's property beyond the reach of his creditors. In a contest between the wife and her husband's creditors, the burden of proof is upon her to show satisfactorily the bona fides of the transaction. While in all such cases the presumptions are against the wife, and in favor of the creditors, the presumptions may be repelled.

7. FRAUDULENT AND VOLUNTARY CONVEYANCES — In General — Decision in Particular Case Dependent upon Facts Adduced. — While the rule of law involved in a suit to set aside a conveyance as fraudulent is well settled, the decision in the particular case depends in a large measure upon the facts adduced.

8. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Sufficiency of Evidence to Sustain Burden of Proof as to Fraud — Case at Bar. — In the instant case, an action to set aside a conveyance from a husband to his wife as fraudulent, evidence was adduced to show that the husband was insolvent at the date of the conveyance to his wife, but the evidence on this point was conflicting.

Held: That proof that the husband was involved financially did not meet the requirement of law that one who alleges fraud must sustain the allegation by proof which is clear and convincing.

9. FRAUDULENT AND VOLUNTARY CONVEYANCES — Appeal — Weight to Be Given Decision of Trial Court upon Conflicting Evidence — Case at Bar. — In the instant case, an action to set aside a conveyance from a husband to his wife as fraudulent, evidence as to the solvency of the husband at the time of the conveyance was conflicting and the conflict was determined by the trial court in favor of the husband.

Held: That while the holding of the trial court was not conclusively binding upon the Supreme Court of Appeals, it was most persuasive, especially in view of the fact that appellants did not show by "clear, cogent and convincing" evidence that appellees were guilty of fraud in the execution and acceptance of the deed in question.

10. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Evidence of Consideration for Transfer — Case at Bar. — In the instant case, an action to set aside a conveyance from a husband to his wife as fraudulent, appellants contended that the consideration of $8,000, recited in the deed of conveyance, was fictitious. The record disclosed that the wife had a checking account and that two checks for the sums of $5,500 and $2,500, respectively, payable to her husband, were charged to the account, and that these checks were turned over by the husband to the bank and that he received credit for them on his indebtedness to the bank, and that she had also paid $1,000 to her husband for the furniture in the house, and that the bank received the proceeds from this sale from the husband.

Held: That since the bank profited by the purchase of the house and lot by the wife, and since the indebtedness of the husband to the bank would have been $9,000 larger without this transaction, the decree of the lower court refusing to set aside the transaction was plainly right.

Appeal from a decree of the Circuit Court of Dickenson county. Hon. A. A. Skeen, judge presiding.

The opinion states the case.

A. M. Phipps and W. L. Rush, for the appellants.

Roland E. Chase, for the appellees.

CAMPBELL, C.J., delivered the opinion of the court.

This suit was instituted by appellant to set aside as fraudulent a deed executed by W. W. Pressley conveying to his wife, Julia C. Pressley, a house and lot situated in the town of Clintwood, Virginia. A final decree was pronounced in favor of appellees and the bill of complaint was dismissed.

The material allegations of the bill of complaint are, that W. W. Pressley, president of the Dickenson County Bank, was indebted to the bank in a large sum of money, and that while so indebted, he, in fraud of the rights of the bank, conveyed certain property to his wife, Julia C. Pressley, for a fictitious consideration of $8,000.

Appellees filed their answer to the bill, denying specifically the allegations of fraud, and setting up the defense that the purchase of the house and lot was a bona fide transaction, and that the consideration of $8,000, recited in the deed of conveyance, was a valid consideration, being money belonging to the wife and actually paid to the husband for the property conveyed to her.

The sole issue in the case is whether or not the conveyance from W. W. Pressley to ...