Flynn v. Baisley

• Decision Date: 10 July 1899
• Citation: 35 Or. 268,57 P. 908
• Parties: FLYNN v. BAISLEY et al.
• Court: Oregon Supreme Court

57 P. 908

35 Or. 268

FLYNN v. BAISLEY et al.

Supreme Court of Oregon

July 10, 1899

Appeal from circuit court, Baker county; Robert Eakin, Judge.

Action by J.F. Flynn against S.B. Baisley et al. to set aside a deed, and to subject a part of the real property described therein to the lien of a judgment against the grantor. From a decree dismissing the action, plaintiff appeals. Affirmed.

This is a suit to set aside a deed, and to subject a part of the real property described therein to the lien of a judgment against the grantor. It is alleged in the complaint: That on July 1 1893, the defendant S.B. Baisley executed to the Baker City National Bank his promissory note for the sum of $3,588 payable six months after date, with interest at the rate of 10 per cent. per annum. That plaintiff thereafter became the owner thereof, and on March 6, 1898, recovered judgment thereon, upon which an execution was issued, and returned wholly unsatisfied. That at the time said note was executed Baisley was the owner in fee of the S. 1/2 of the S.E. 1/4 and the S.E. 1/4 of the S.W. 1/4 of section 15, in township 7 S., of range 38 E. of the Willamette meridian; the W. 1/2 of the S.E. 1/4 of section 25, the S. 1/2 of section 26, the E 1/2 and the N.W. 1/4 of section 35, in township 8 S., of range 39 E., of said meridian, in Baker county,--containing 1,000 acres, more or less. That on December 1, 1894, Baisley and wife, for the expressed consideration of $6,000, executed to their sons, Perry A. and J.H. Baisley, a general warranty deed of said property. That no consideration was paid for the conveyance. That it was executed with intent to hinder delay, and defraud the creditors of S.B. Baisley. That the premises therein described were then of the reasonable value of $10,000; and that Baisley had no other property out of which plaintiff's judgment, or any part thereof, can be satisfied. The answer denies the material allegations of the complaint, and avers that S.B. Baisley, on December 1, 1894, was indebted to Perry A. and J.H. Baisley in the sums of $500 and $125, respectively, in consideration of which, and of their payment of the sum of $25, and agreement to discharge the principal of two mortgages to secure the sums of $3,350 and $2,000, executed to them a deed of the north half of lot 3 and the south 30 feet of lot 4 in block 4 in the United States town site of Baker City, the E. 1/2 of section 35, in township 8 S., of range 39 E., and an undivided one-tenth in fee and a dower interest in the other property described in the complaint, for which he received an adequate consideration. The reply having put in issue the allegations of new matter in the answer, a trial was had, resulting in a decree dismissing the suit, and plaintiff appeals.

John L. Rand, for appellant.

W.F. Butcher, for respondents.

MOORE J. (after stating the facts).

It is contended by plaintiff's counsel that the evidence shows that the conveyance was voluntary, and that, Baisley being indebted to plaintiff's assignor at the time it was executed, the court erred in dismissing the suit. The evidence shows that on December 1, 1894, said lots in Baker City, together with a building thereon, known as "Meier's Hotel," were incumbered with a mortgage executed by Baisley and wife to the Baker City National Bank, to secure the sum of $3,350 that the E. 1/2 of section 35 in township 8 S. of range 39 E., was subject to a mortgage executed by them to the Lombard Investment Company, to secure the sum of $2,000, and that such incumbrance on the hotel property was also a second lien thereon, but that the undivided one-tenth of the other tracts, equivalent to 68 acres, was unincumbered; that the grantees in said deed sold the lots in Baker City some time in 1896, for the sum of $3,000, in consideration of which, and the further sum of $50, said bank entered satisfaction in full of its mortgage, thereby relinquishing the sum of $757.58, and releasing the E. 1/2 of said section 35 from the lien thereof; that they paid the interest and $300 of the principal due upon said Lombard Investment Company's mortgage, and secured an extension of two years for the payment of the remainder; that when said deed was executed to them they were aged 21 and 19 years, respectively; that Perry, being permitted by his father to labor on his own account during the latter years of his minority, and to retain his earnings, operated a boarding house at the gold mines in said county, and was thereafter employed as a bookkeeper in the Baker City National Bank, whereby he accumulated the sum of $500, which he loaned to his father prior to the execution of the deed; that J.H. Baisley labored under the same privileges and conditions as his brother, and earned $125 during his minority, which he loaned to his father, and which the latter owed him at the time the deed was executed. It is argued by plaintiff's counsel that this money belonged to the father, and that his being indebted at that time constituted it a trust fund for the benefit of his creditors, and, this being so, the conveyance, as to that part of the consideration, was voluntary. This must depend upon whether Baisley had in good faith emancipated his sons before they earned the money. A conveyance of lands without a valuable consideration, by one who is indebted at the time, is presumptively a fraud upon his creditors, who have an equitable right to set it aside or to avoid it, at least to the extent of the debts due them. Elfelt v. Hinch, 5 Or. 255; Davis v. Davis, 20 Or. 78, 25 P. 140; Sterry v. Arden, 1 Johns.Ch. 261. It being the duty of an infant to labor for his parent in consideration of the latter's furnishing him maintenance and education, it has been held that a deed of land executed by an insolvent parent to his infant child in consideration of services rendered or to be rendered during his minority is voluntary, and void as to creditors of the grantor. Swartz v. Hazlett, 8 Cal. 118; Stumbaugh v. Anderson, 46 Kan. 541, 26 P. 1045. A father, who was insolvent, having made a deed to his minor son in consideration of wages earned and a note executed by him, it was held that the conveyance was voluntary, and void as to the grantor's creditors. Winchester v. Reid, 53 N.C. 377. In Bell v. Hallenback, Wright, 752, it is held that if a father, who at the time is indebted, invests the earnings of the minor children in real estate, and takes the title in their names, the premises will be charged with the debts he then owed. In Jolly v. Kyle, 27 Or. 95, 39 P. 999, it is said: "Conveyances from one relative to another, when attacked by the creditors of the grantor, will always be closely scrutinized, for from the very relation of the parties it is scarcely to be supposed that the circumstances and intention of the grantor were not known to the grantee." To the same effect, see, also, Burt v. Timmons (W.Va.) 2 S.E. 780; Shober v. Wheeler, 113 N.C. 370, 18 S.E. 328. Where, however, the parent has in good faith emancipated his minor child, and...