First State Bank of Durant v. Smith

• Decision Date: 14 April 1914
• Docket Number: Case Number: 3353
• Citation: 140 P. 150,43 Okla. 320,1914 OK 183
• Parties: FIRST STATE BANK OF DURANT v. SMITH.
• Court: Oklahoma Supreme Court

1914 OK 183

140 P. 150

43 Okla. 320

FIRST STATE BANK OF DURANT v. SMITH.

Case Number: 3353

Supreme Court of Oklahoma

Decided: April 14, 1914

Syllabus

¶0 1. ATTACHMENT--Grounds--Fraudulent Conveyance--Burden of Proof. In order to sustain an attachment issued upon the ground that the defendant has disposed of his property with intent to defraud, hinder, or delay his creditors, the intent to defraud must be established by the person who alleges such intent.

2. SAME--Preferring Creditor. Such fraudulent intent will not be inferred from a finding of the trial court to the effect that the defendant disposed of his property for the purpose and with the intent to prefer one creditor over the others, and with the intent to delay the collection of plaintiff's claim until after the payment of the indebtedness due the preferred claimant.

3. SAME. In the absence of statutory provisions to the contrary, a debtor, though in failing circumstances, may prefer one or more of his creditors to the exclusion of the rest, and such preference is not in itself sufficient to sustain an attachment upon the ground that the defendant has disposed of his property with the intent to defraud, hinder, or delay his creditors.

Error from District Court, Bryan County; Summers Hardy, Judge.

Action by the First State Bank of Durant against C. H. Hardin Smith. Judgment for defendant, and plaintiff brings error. Affirmed.

Utterback, Hayes & MacDonald and Burwell, Crockett & Johnson, for plaintiff in error

C. C. Hatchett, for defendant in error

KANE, J.

¶1 This was an action upon a promissory note, commenced by the plaintiff in error, plaintiff below, against the defendant in error, defendant below. Upon the commencement of the action the plaintiff caused a writ of attachment to be issued, which was levied upon certain real estate as the property of the defendant. The ground of attachment, as stated in the affidavit, is "that said defendant has assigned, removed, or disposed of, or is about to dispose of, his property, or a part thereof, with the intent to defraud, hinder, or delay his creditors."

¶2 There was no controversy over the defendant's liability on the note sued upon; but issue was joined on the attachment feature of the case by a motion to dissolve the same, upon the grounds:

"(1) That the defendant denies that he has sold, or is about to sell, transfer, and dispose of, his property, or any part thereof, with the intent to hinder, delay, and defeat his creditors in the collection of their claims against him, and denies each and every ground for attachment alleged by the plaintiff, and every part thereof. (2) Defendant says that since the filing of his first motion to dissolve the attachment sued out herein that he has ascertained that the plaintiff has had attached herein certain lands formerly owned by this defendant in Marshall county, Okla.; the same being described as follows: * * * That said property is not properly attached. Defendant says that on the 28th day of April, 1910, prior to the date of the levy of said attachment that he, by warranty deed, for a valuable consideration, conveyed the said real estate to Mrs. M. E. Stevens, of Cooke county, Tex., and that at the date of the levy of the attachment herein he had no interest in the said real estate, and therefore the same is not subject to attachment for the debts of this defendant."

¶3 After the parties had introduced all of their testimony and rested, the court made the following findings of fact and conclusions of law:

"In this case the execution of the note set out in plaintiff's petition is admitted, and there is no controversy as to the amount due on said note; at the beginning of this suit plaintiff filed an affidavit for an attachment against the property of defendant, Smith, upon the ground that said defendant had assigned, removed, or disposed of or was about to dispose of his property, or a part thereof, with the intent to defraud, hinder, and delay his creditors.

"The proof shows that defendant, C. H. Hardin Smith, was president of the Durant State Bank [Oklahoma State Bank?] of Durant, Okla., and that said bank was in a failing condition, and was in the hands of the State Bank Commissioner and that defendant, Smith, was indebted to said bank in a sum in excess of $ 35,000; that he was also indebted to the plaintiff in the amount sued for in this case, and was under liability to other persons. The proof also shows: That at said time the defendant was wholly insolvent, and was unable to pay off and discharge all of his indebtedness. That he had made promises at various times to the plaintiff in this case to pay the amount due, but had failed to make said payments according to his promise, and that on the 28th day of April, 1910, he executed a conveyance, transferring to Mrs. M. E. Stevens, who bears the relationship to said defendant of aunt by marriage, conveying to said aunt all of the real estate owned by the defendant in Bryan and Marshall counties in the state of Oklahoma. That there was an agreed value between the defendant and his said aunt of said property at $ 10,000, which said defendant received, thereupon delivering the deed. The proof also shows that said aunt, in addition to the $ 10,000 paid for the transfer of said real estate, paid in at the Oklahoma State Bank or the said bank commissioner, to be applied on the liability of the defendant, [sic] the Oklahoma State Bank, and the sum of $ 25,000 in money.

"The court finds from the testimony the facts just stated, and finds, further, that said deed was executed with the purpose and intent on the part of the defendant, Smith, to prefer the indebtedness due the Oklahoma State Bank, and

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