Fousek v. De Forest

• Decision Date: 20 October 1931
• Docket Number: 6804.
• Parties: FOUSEK v. DE FOREST et al.
• Court: Montana Supreme Court

4 P.2d 472

90 Mont. 448

FOUSEK v. DE FOREST et al.

No. 6804.

Supreme Court of Montana

October 20, 1931

Rehearing Denied Nov. 10, 1931.

Appeal from District Court, Cascade County; Edgar J. Baker Presiding Judge.

Action by Albert J. Fousek, trustee, against Byron De Forest and another. From a judgment for defendants, plaintiff appeals.

Reversed and remanded with direction.

A. H Gray, J. H. Corcoran, McKenzie & McKenzie, Frank Polutnik Jr., and Loy Molumby, all of Great Falls, for appellant.

Hurd Hall & McCabe, of Great Falls, for respondents.

ANGSTMAN J.

On March 21, 1928, plaintiff obtained a judgment in the district court of Cascade county against Byron De Forest and Josef Ortopan in the sum of $344.75 and costs. On August 17, 1928, execution was issued and subsequently returned wholly unsatisfied. Later another execution was issued and placed in the hands of the sheriff, who levied on the right, title, and interest of Byron De Forest in and to thirty shares of fully paid stock in the Great Falls Building & Loan Association of the par value of $3,000, and in and to certain shares of stock in the Mountain States Building & Loan Association. Notice of attachment under the writ of execution was served on the Great Falls Building & Loan Association, and it made answer that Byron De Forest has no stock in the association, but that Florence De Forest has thirty shares. About $22 was paid on the judgment as a result of the sale of some property under execution sale, but the balance due on the judgment remains unpaid and unsatisfied.

On proceedings supplementary to execution it was developed that in April, 1928, defendant Byron De Forest transferred the thirty shares of stock in the Great Falls Building & Loan Association to his wife, the defendant Florence De Forest, and this action was brought to have the transfer set aside upon the ground that it was without consideration and fraudulent, and made for the alleged purpose of hindering and delaying plaintiff in the collection of his judgment. The action was tried to the court without a jury, resulting in findings and a decree for defendants, from which plaintiff appealed.

The court found that Florence De Forest was at all times the owner of the thirty shares of stock, that the transfer was for a valuable and sufficient consideration, and that it did not render Byron De Forest insolvent. The correctness of these findings is challenged by plaintiff, and it is contended by him that the court erred in rejecting his requested findings to the effect that Byron De Forest was the owner of the stock, that the transfer was voluntary, that he did not retain sufficient property out of which the judgment might be satisfied, and that the transfer rendered him insolvent.

The rule is firmly established thatfindings of the trial court in an equity case will not be disturbed unless the evidence clearly preponderates against them (National Bank of Anaconda v. Yegen, 83 Mont. 265, 271 P. 612), and due allowance must be made for the more advantageous position occupied by the trial judge who observed the conduct and appearance of the witnesses. Barnard Realty Co. v. City of Butte, 55 Mont. 384, 177 P. 402. But where the attendant circumstances are such as to cast suspicion upon the transaction as narrated by interested parties ( Security State Bank v. McIntyre, 71 Mont. 186, 228 P. 618), or where the conditions and circumstances leave no room for a contrary conclusion, this court will not hesitate to overturn the findings of the trial court. Piersky v. Hocking, 88 Mont. 358, 292 P. 725.

In Edenfield v. C. V. Seal Co.,Inc., 83 Mont. 49, 270 P. 642, 646, it was aptly said: "This court and other courts have said, on many occasions, that a court cannot scrutinize too closely the relation between husband and wife with respect to business dealings between them where creditors are concerned. Keller v. Flanagan, 66 Mont. 144, 158, 213 P. 222, 225. The marital relation is often a convenient means for the perpetration of a fraud, and when claims of indebtedness are made between husband and wife, they must be subjected to the most searching examination, if not, indeed, suspicion. Lambrecht v. Patten, 15 Mont. 260, 38 P. 1063; Koopman v. Mansolf, 51 Mont. 48, 149 P. 491."

Plaintiff proved by the records of the Great Falls Building & Loan Association that ten shares of stock were issued to Byron De Forest on July 10, 1926, and twenty shares on July 5, 1927; that the certificates were assigned by him to Florence De Forest on April 16, 1928, who was at that time in California, and no further transfer has been made; the first payment made on the ten shares of stock was on August 1, 1925, and the last on July 10, 1926; the first payment on the twenty shares was made January 26, 1926, and the last payment on July 1, 1927; the stock accounts were carried in the name of Byron De Forest. There was evidence that Byron De Forest had testified in the supplementary proceedings that he transferred all of his property to his wife, including his shotgun and rifle, retaining in his name an interest in some judgments which were shown to have been sold on execution sale for $25 and the proceeds applied to plaintiff's judgment; that he then said there was no consideration for the transfer and gave as his reason for the transfer that he was in the collecting business and was out of town a great deal. Each of defendants testified in this action that the money that was used to pay for the stock belonged to Florence De Forest.

Defendant Byron De Forest, when asked on cross-examination in this case if he had not testified in the supplementary proceedings that he had "turned over his property of every kind, including his shotgun and rifle, to his wife, said 'I think I did."' When asked whether in those proceedings he had testified that there was no money consideration for the transfer of the stock, he replied, "I don't recollect what I testified to." Mrs. De Forest testified on the trial of this action that in 1917 she was the owner of a ranch about eleven miles south of Great Falls; that she owned the ranch until the spring of 1926, when it was sold on a contract calling for installment payments; that during the time when she owned the ranch she lived on it in 1922, 1923, and 1924, during which time it produced an income which she thought amounted to more than $3,000; and that the income was applied and used for the payment of the stock certificates in question. She said she thought at all times they were carried in her name. During the year 1922 she thought they sold something over a thousand bushels of wheat. She said, "It would be impossible for me to remember back six or seven years the price of wheat," but that "there was something over a thousand dollars." The expense of raising the wheat was paid out of the office, but she did not know how much that expense was. The wheat, she said, was probably sold in the early winter months of 1922 and the money was thereupon paid to the Great Falls Building & Loan Association. The next year she sold between three and four hundred bushels, receiving something around a dollar per bushel for it. The expenses, the amount of which was not shown, were again paid by Mr. De Forest. Aside from wheat there was derived as income from the ranch that year "approximately around one hundred dollars." This, she said, was likewise paid into the Great Falls Building & Loan Association. She admitted, however, that so far as her statements as to the income for 1923 were concerned, they might be more in the nature of guesses than with any idea of approaching accuracy.

In 1924 there were about 200 bushels of wheat and $250 worth of turkeys raised and sold, the proceeds of which, she said were paid into the building and loan association. Sometimes she paid the money to the building and loan association, and sometimes Mr. De Forest did. She said she had no checking account, but most of the money was put in the bank in Mr. De Forest's agency checking account and then paid to the building and...