Hayes v. Rodgers

• Decision Date: 21 November 1969
• Citation: 447 S.W.2d 597
• Parties: B. H. HAYES and his wife, Leah S. Hayes, appellants, v. R. E. RODGERS and Maude Rodgers, doing business as Rodgers and Rodgers, Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 597

447 S.W.2d 597

B. H. HAYES and his wife, Leah S. Hayes, appellants, v. R. E. RODGERS and Maude Rodgers, doing business as Rodgers and Rodgers, Appellees.

Court of Appeals of Kentucky.

Nov. 21, 1969.

James E. Story, Eddyville, for appellants.

B. M. Westberry, J. Wendell Roberts, Marion, for appellees.

NEIKIRK, Judge.

This appeal is from a judgment setting aside, as in fraud of creditors, a deed from husband to wife.

B. H. Hayes, by a deed dated January 9, 1963, conveyed two tracts of land in Lyon County to his wife, Leah S. Hayes. One tract contained 180 acres, more or less, the larger tract 227 1/4 acres, more or less. The deed recited that it was executed 'for and in consideration of the sum of $1.00 cash in hand paid, and other good and valuable considerations, the receipt of all of which is hereby acknowledged, and for the further consideration of the love and affection which the party of the first part holds for his wife, the party of the second part.' The deed was recorded on August 29, 1966.

R. E. Rodgers and Maude Rodgers, doing business as Rodgers and Rodgers, who were judgment creditors of B. H. Hayes, on April 24, 1967, filed their complaint seeking to have the deed from B. H. Hayes to his wife, Leah S. Hayes, declared a nullity as to the 180-acre tract. Answer was filed and Leah filed a counterclaim for libel and slander. Pursuant to the judgment which the Rodgerses had obtained against B. H. Hayes in the litigation to enforce their original claim against him, the sheriff had published notice of sale of the 180-acre tract of land. Leah, in her counterclaim, alleged that she was the owner of this tract of land, and not being a party to the former litigation she had been libeled and slandered by the publication of notice of sale.

R. E. Rodgers died on February 4, 1968. Maude Rodgers died on August 6, 1968. The present Civil Action No. 549 was revived and is being prosecuted by their respective executors. We shall use the names 'R. E. Rodgers and Maude Rodgers' for purposes of identity.

On September 10, 1968, appellees, R. E. Rodgers and Maude Rodgers, were granted summary judgment in the instant action. The deed from B. H. Hayes purporting to convey the tract of 180 acres, more or less, to his wife Leah was 'canceled, annulled, and set aside.' Leah's counterclaim was dismissed and 'forever barred.'

From this judgment B. H. Hayes and Leah appeal. We affirm.

We find no genuine issue of any material fact on the counterclaim of Leah.

The notice of sale of which Leah complains was not published by R. E. Rodgers and Maude Rodgers. The publication was made by the sheriff pursuant to order of the Lyon Circuit Court.

Judicial proceedings are privileged from actions for libel and slander. Schmitt v. Mann, 291 Ky. 80, 163 S.W.2d 281. In that case this court followed a statement from Cooley on Torts, 4th Edition, Section 156:

'The general rule may be stated to be that pertinent matter in pleadings, motions, affidavits, and other papers in any judicial proceeding, is absolutely privileged, though false and malicious * * *.'

Prosser on Torts, 3rd Edition, Section 109 at Page 100, cites the Schmitt case, among other authorities, in support of the general rule of immunity in holding judicial proceedings privileged from actions for libel and slander.

Furthermore, a claim for libel and slander ceases or dies with the death of the person injured or the person injuring. KRS 411.140. During the pendency of the counterclaim of Leah S. Hayes, both R. E. Rodgers and Maude Rodgers died.

We find the trial court properly dismissed by summary judgment the counterclaim of Leah S. Hayes.

The claim of the Rodgerses in the instant action grew out of a loan of $3,669.03 which they made to B. H. Hayes on June 2, 1960. To secure this debt, B. H. Hayes executed and delivered to them his promissory demand note bearing interest at the rate of six per cent per annum. Hayes defaulted though demand was made. The Rodgerses filed Civil Action No. 388 on December 12, 1963, to enforce payment. Hayes did not answer, and on March 16, 1966, the Rodgerses were granted default judgment. In an effort to collect the judgment, execution was issued on April 9, 1966, and returned 'no property found.' A general order of attachment was issued against all of the property of B. H. Hayes. By amended complaint Leah S. Hayes and the Citizens State Bank of Eddyville, Kentucky, were named and served as garnishees to answer and disclose any money, choses in action, or other property owned by B. H. Hayes held by them or in which B. H. Hayes had any interest whatsoever. Lis pendens was filed. All of this on August 18, 1966. Leah S. Hayes answered that she held 'no property or money in which B. H. Hayes had an interest.' Other legal proceedings led up to January 8, 1967, when the trial court entered an order directing the Lyon County sheriff to sell the 180-acre tract of land belonging to B. H. Hayes in satisfaction of the Rodgers judgment. After publication of the sale in the newspaper, counsel for the Rodgerses was notified that B. H. Hayes had sold the 180-acre tract of land to his wife Leah. No further action was taken in Civil Action No. 388.

On April 24, 1967, the Rodgerses filed the instant action, setting forth all of the happenings in Civil Action No. 388. In addition, they alleged the indebtedness of B. H. Hayes and sought to have the deed from B. H. Hayes to his wife Leah for the 180-acre tract of land 'canceled, annulled, and set aside.' They claimed the conveyance was in violation of sections of Chapter 378, Kentucky Revised Statutes, and demanded that so much of the land as necessary be subjected to the satisfaction of their prior judgment.

Without our detailing the many proceedings between the filing of the complaint, April 24, 1967, and the entry of summary judgment, September 10, 1968, suffice it to say that issues were joined, interrogatories were filed and answered, motion and affidavits in support of summary judgment and counteraffidavit were made, briefs submitted, and oral arguments heard by the trial court.

The trial court properly held that the deed of conveyance from B. H. Hayes to his wife Leah should be set aside.

In actions to set aside a conveyance for fraud, the fraud must be established by clear and convincing evidence. However, there are exceptions. Between persons closely related, such as husband and wife, the transaction must be closely examined to see that no subterfuge is employed. It is a badge of fraud for a debtor to transfer all or any appreciable part of his property when he is insolvent or financially embarrassed. Pope v. Cawood, 293 Ky. 660, 170 S.W.2d 55. Inadequacy of consideration is another badge. Trent v. Carroll, Ky., 380 S.W.2d 87. The deed to Leah S. Hayes...