Henry v. Yost

• Decision Date: 12 November 1915
• Docket Number: 12312.
• Citation: 152 P. 714,88 Wash. 93
• Parties: HENRY v. YOST et al.
• Court: Washington Supreme Court

152 P. 714

88 Wash. 93

HENRY v. YOST et al.

No. 12312.

Supreme Court of Washington

November 12, 1915

Department 2. Appeal from Superior Court, Yakima County; E. B. Preble Judge.

Action by James Henry against Albert H. Yost and others. Judgment for defendants, dismissing the action with prejudice. Motions for a new trial and for a modification making the dismissal without prejudice denied, and plaintiff appeals. Affirmed.

John E Ryan, of Seattle, and Englehart & Rigg, of North Yakima, for appellant.

H. J Snively, of North Yakima, for respondents.

ELLIS, J.

In February, 1911, A. H. Yost and J. W. Day, sheriff of Yakima county, wrongfully seized and converted a band of sheep belonging to James Henry. On August 30, 1912, Yost and wife were indebted to the Outlook State Bank in the amount of $3,300. On that day they executed to H. E. Schroeder, cashier of the bank and wife, a chattel mortgage covering their personal property, and a quitclaim to their farm near Outlook, and received from him a trust agreement, which declared that the property was deeded to Schroeder, to be held by him in trust for Mrs. Yost, and covenanted that upon demand the property would be reconveyed to her, or to whomever she should direct, for her separate estate. Subsequently Henry sued Day and Yost for the conversion of the sheep seized by them, and on February 25, 1913, the jury in that action returned a verdict in favor of Henry for the value of the sheep. Judgment upon this verdict was entered by the clerk, but no formal judgment was ever signed and entered. An execution was issued upon this judgment directed against the property of Yost, and returned by the sheriff nulla bona.

On July 10, 1913, Henry commenced this action against Yost and wife and Schroeder and wife. The complaint alleged the institution of the action by Henry against Yost and Day, service on and appearance of Yost, the trial of the cause, resulting in the verdict against Yost, the entry of a judgment thereon, and the absence of an appeal therefrom or modification thereof; alleged that the judgment was on account of a community obligation; alleged that the conveyance by Yost and wife to Schroeder was made with intent to defraud plaintiff in the collection of any judgment he might obtain, that the conveyance to Schroeder was made without consideration, and that Schroeder had no claim to the property, and further that Yost and wife had no other property out of which the judgment might be satisfied. Plaintiff prayed that the conveyance be declared void and the property subjected to the lien of his judgment.

Upon the trial of the cause counsel for Henry introduced, over objection, the summons, complaint, and proof of service, the verdict, the clerk's minute entry of the judgment, and the execution in the case of Henry v. Yost. Schroeder testified that the quitclaim deed was given to secure the indebtedness to the bank, since reduced to $2,835 by various payments, and that, when this was paid in full, the understanding was that Schroeder should reconvey the property to Yost. Having proved the entry of the judgment in the Henry v. Yost action, the conveyance to Schroeder, and that the claim of Henry had not been paid, the plaintiff rested. The defendant thereupon moved for dismissal on the ground that the plaintiff had not proved a lien against the defendants, and that he had proved no fraud. The case was reopened to permit evidence of the value of the property, and at the close of this testimony defendant renewed his motion for dismissal, which was refused. The trial judge gave a written opinion, in which he concluded that Henry had failed to prove that he was a creditor of Yost when the quitclaim deed and trust agreement were executed and delivered to Schroeder; therefore the burden was on him to prove that Yost executed the deed to defraud subsequent creditors, and that, as he had failed to do so, the action should be dismissed, and a judgment of dismissal with prejudice was accordingly entered. A timely motion for new trial was made by the plaintiff and denied by the court. A motion to modify the judgment, to make the dismissal without prejudice, was likewise denied. This appeal is from the order denying the motion for a new trial, or, in the alternative, for a modification of the judgment, and from the judgment as entered.

The right to have conveyances made with intent to hinder, delay and defraud creditors set aside has long been recognized as a part of the common law of this state. Wagner v. Law, 3 Wash. 500, 28 P. 1109, 29 P. 927, 15 L. R. A. 784, 28 Am. St. Rep. 56. To attack the validity of a conveyance, the person asserting the fraud must be one who has been injured by the fraud; and accordingly a creditor of the debtor may so attack the conveyance. A conveyance made without consideration is presumptively fraudulent as to existing creditors of the grantor. However there is no presumption that such a transfer was made with a view to defraud subsequent creditors. It becomes material, then, to determine whether Henry was a creditor of...