Gwillim v. Asher

• Decision Date: 09 January 1922
• Docket Number: 10231.
• Citation: 204 P. 609,71 Colo. 143
• Parties: GWILLIM et al. v. ASHER.
• Court: Colorado Supreme Court

204 P. 609

71 Colo. 143

GWILLIM et al. v. ASHER.

No. 10231.

Supreme Court of Colorado

January 9, 1922

Rehearing Denied March 6, 1922.

Department 2.

Error to District Court, El Paso County; Arthur Cornforth, Judge.

Action by William D. Asher against R. J. Gwillim, Janet Gwillim, and others. Judgment for plaintiff, and defendants Janet Gwillim and others bring error, and move for supersedeas.

Supersedeas denied, and judgment affirmed.

Samuel H. Kinsley and Leon H. Snyder, both of Colorado Springs, for plaintiffs in error.

W. D Lombard, C. B. Horn, Willis L. Strachan, and Eugene D Preston, all of Colorado Springs, for defendant in error.

DENISON J.

The defendant in error, a judgment creditor of R J. Gwillim, brought suit against him, Janet, his wife, and Gwladys and Gwendolin, his daughters, to set aside two certain conveyances of land from said R. J. Gwillim to his said relatives. The plaintiff had a decree, and the wife and daughters bring error, and move for supersedeas. They attack the complaint on two grounds: (1) That two causes are stated in one count; (2) that the facts stated are insufficient. They also claim that the evidence is insufficient to support the decree.

1. The complaint alleges that on December 1, 1919, plaintiff began suit against R. J. Gwillim, and on August 4, 1920, recovered a judgment therein; that December 1, 1919, Gwillim was owner of record of two parcels of real estate, viz., a ranch and a house in Colorado Springs; that December 13, 1919, he filed or caused to be filed for record a deed of the ranch, dated November 9, 1917, from himself to Janet, his wife, and July 8, 1920, a deed of the house, dated September 24, 1918, from himself to his two daughters; that said deeds were without consideration, and for the purpose of defrauding his creditors, particularly the plaintiff, and 'were executed with a view to contracting future obligations,' and 'with fraudulent intent * * * to the contracting of future obligations,' and left Gwillim without property to satisfy plaintiff's judgment and rendered him insolvent; that while said deeds remained unrecorded Gwillim retained the property and represented himself to be the sole owner; that he was, and is, the equitable owner, and that said grantees hold in trust for him, and that said trust was created with fraudulent intent on his part to the contracting of future obligations, which was known to his grantees.

We think this states but one cause of action. The substance of the pleading is clear, though its expression is confused. Gwillim conveyed all his property to his wife and daughters to prevent plaintiff from collecting his judgment. That the conveyances were far apart in date and record, and to different grantees, in immaterial, since it appears that they constitute one fraudulent transaction on the part of the grantor, and, because they knew his intent, on the part of the grantees also.

If we test this by Mr. Pomeroy's rule we get the same result; there is but one primary right in plaintiff and one corresponding duty in defendants--that is, to hold Gwillim's property for application to his debts--and but one violation thereof--that is the transfer by defendants with a common purpose to avoid that duty. Pom. Rem. & Rem'l Rights, §§ 1, 452-459, 518-522; Farmers' High Line Canal & Res. Co. v. Webber (Colo. Sup.) 201 P. 555.

2. Does the complaint state a cause of action? We think it does.

Plaintiffs in error say that, since Gwillim is not shown to have been indebted at the date of the deed to the wife, and since it left him solvent, with property in his name and control, that deed was valid, and her knowledge of his fraudulent intent to incur future obligations and escape them by means of these deeds was immaterial, and so no cause is stated against the wife. We do not agree with this argument. If the wife accepted a gift of land from her husband knowing such intent she had no equity in the land as against his creditors. The effect of the allegations is to make the two deeds part of one fraudulent transaction.

True, as this court has held, a solvent man may give his wife property to protect her against his future misfortunes, but, if the gift is part of a scheme to dispose of all his property by unrecorded deeds, and then to incur obligations and escape them, and she knows it, the case is different.

The allegation that the grantor was still the equitable owner may be a conclusion of law, though in this jurisdiction it would seem not (Rice v. Bush et al., 16 Colo. 484, 27 P. 720); but the alleged fraudulent purpose and acts show him to be the equitable owner so far as his creditor's rights are concerned. So of the allegation of a secret trust. The trust results from the conveyance without consideration for a fraudulent purpose known to the grantee; sufficient facts, therefore, and alleged to support the legal conclusions, and thus the allegations of such conclusions become surplusage. The fraudulent purpose vitiates the whole transaction; the doctrine of trust and equitable title is but equity's method of righting the...