Holden v. Walker

Decision Date29 April 1933
Docket Number6065
Citation248 N.W. 318,63 N.D. 372
CourtNorth Dakota Supreme Court

Appeal from the District Court of Ramsey County, Buttz, J.


F H. Stevens and Traynor & Traynor, for appellants.

A fraudulent intent in the transfer of real estate must be made to appear in order to justify a court in setting the conveyance aside as fraudulent as to creditors. Dalrymple v. Security Loan & T. Co. 9 N.D. 306.

Merely "claiming" a lien on real property, where the pleadings show that no lien in fact exists, will not support an action to determine adverse interests, under Rev. Code 1919, § 2846, providing "an action may be maintained by any person or persons having or claiming to have an estate or interest in, or lien or incumbrance upon any real property." Fridley v. Munson (S.D.) 191 N.W. 453; Bank of Sanborn v. France, 49 N.D. 1.

It is not the debtor's actual interest in the real estate that is thus liened by attachment, but instead it is his interest as shown by the records of the register of deeds office affecting the real property attached, our statute, § 5038, changing the rule otherwise applicable. Mott v Holbrook, 28 N.D. 251, 148 N.W. 1061.

The relationship between the parties is not a badge of fraud; it creates no presumption of fraud; neither, standing alone, does it warrant a judgment based upon suspicion. First Nat. Bank v. Mensing, 46 N.D. 184, 108 N.W. 58; McDaniel v. Parish, 4 App. D.C. 213; Ford v. Brown, 54 N.D. 281, 209 N.W. 386.

The question of intent is always one of fact. It must be alleged, proved and found in order to avoid the transfer. Stevens v. Meyers, 14 N.D. 398; Murie v. Hartzell, 58 N.D. 200, 225 N.W. 310; Tomlinson v. Farmers & M. Bank, 58 N.D. 217, 225 N.W. 315; Mott v. Holbrook, 28 N.D. 251, 148 N.W. 1061; Bank of Sanborn v. France, 49 N.D. 1, 177 N.W. 375.

Under the laws of North Dakota a debtor may pay, or secure the payment of, his indebtedness to one creditor in preference to another. Page v. Steinke, 236 N.W. 261, 60 N.D. 865.

That the grantee has in good faith paid the debts which he agreed to pay as the condition of the conveyance or transfer to him is a good defense to an action brought against him by other creditors of the grantor. 27 C.J. 534.

F. T. Cuthbert and Sinness & Duffy, for respondent.

By a valid seizure of defendant's property and the giving of such notice as is required by law the court acquires jurisdiction to render judgment against the attached property. 6 C.J. 483.

A judgment obtained against a nonresident, where the jurisdiction rests only upon service by publication and the seizure of the debtor's property under a writ of attachment, has the same conclusive effect, to the extent of his interest in the property seized, as a judgment rendered upon personal service. Voorhees v. Jackson, 10 Pet. 449, 9 L. ed. 490; Cooper v. Reynolds, 10 Wall. 309, 19 L. ed. 931; Needham v. Willson (C.C.) 47 F. 97; Mosgrove v. Harris, 94 Cal. 162, 29 P. 490; Kane v. Cook, 8 Cal. 449; Eastman v. Wadleigh, 65 Me. 251, 20 Am. Rep. 695; Banta v. Wood, 32 Iowa 469; Exchange Nat. Bank v. Clement, 109 Ala. 270, 19 So. 814; Woodruff v. Taylor, 20 Vt. 65; Freeman v. Alderson, 119 U.S. 185, 30 L. ed. 372, 7 S.Ct. 165; Paulson v. Ward, 4 N.D. 100, 58 N.W. 792; Roller Mill v. Ward, 6 N.D. 317, 70 N.W. 271.

The complicity of the grantee in the fraud of the grantor deprives him of any right to relief in respect to such payment. Wood v. Hunt, 38 Barb. 302.

In support of the doctrine that the payment of a valuable consideration will not alone sustain a conveyance which is made and received with intent to delay or defraud creditors, see particularly Billings v. Russell, 101 N.Y. 226, 4 N.E. 531; May v. Walter, 56 N.Y. 8; Commercial Bank v. Bolton, 87 Hun, 547, 35 N.Y.S. 138; Fullerton v. Viall, 42 How. Pr. 294; Goodhue v. Berrien, 2 Sandf. Ch. 630; Hedges v. Payne (Sup.) 17 N.Y.S. 809; Howe v. Sommers (Sup.) 48 N.Y.S. 162; Kurtz v. Lewis Voight & Sons Co. (Mo.) 75 S.W. 386; Spuck v. Logan (Md.) 54 A. 989; Salzenstein v. Hettrick, 105 Ill.App. 99; Eickstaedt v. Moses, 105 Ill.App. 634; Colorado T. & T. Co. v. Acres (Neb.) 61 N.W. 928; Landauer v. Mack (Neb.) 61 N.W. 597; Marcus v. Leake (Neb.) 94 N.W. 100; Foley v. Doyle (Neb.) 95 N.W. 1067; Smith v. Schwed (C.C.) 9 F. 483; Union Nat. Bank v. Warner, 12 Hun, 306; Pope v. Kingman & Co. (Neb.) 96 N.W. 519; Beidler v. Crane, 135 Ill. 92, 25 N.E. 655, 25 Am. St. Rep. 349; Garland v. Rives, 4 Rand. 282, 15 Am. Dec. 756; Morley v. Stringer (Mich.) 95 N.W. 978; Davis v. Leopold, 87 N.Y. 620; Menton v. Adams, 49 Cal. 620; Stovall v. Bank, 8 Smedes & M. 305, 47 Am. Dec. 85; Pettibone v. Stevents, 15 Conn. 19, 38 Am. Dec. 57; Bump, Fraud. Conv., § 628. Solemonson v. Thompson, 13 N.D. 182.

A personal intent upon the part of the grantor to defraud his creditors is not necessary. If the result of the conveyance is actually to defraud or delay creditors the law implies the intent. Johnson v. Rutherford, 28 N.D. 87, 147 N.W. 390; Dalrymple v. Security Loan & T. Co. 9 N.D. 306, 83 N.W. 245; Daisy Roller Mills v. Ward, 6 N.D. 317.

Burr, J. Nuessle, Ch. J., and Christianson, Birdzell and Burke, JJ., concur.


The issue involved in this case is largely one of fact and involves title to the west half of the southeast quarter and the east half of the southwest quarter of section 2 in township 152, range 62; the northeast quarter of section 19, in township 155, range 61; the southeast quarter of section 17 in township 154, range 62; and the north half of the northwest quarter of section 24 and the south half of the southwest quarter of section 13, township 155, range 62; in Ramsey county.

Defendant Eva S. Walker is the daughter of defendant Smith, and the record indicates she and her children are his only heirs. Defendant Smith was born in 1846. In 1885 he came to Ramsey county and maintained his home in Crary until the year 1929 when he removed permanently to California, in the meantime having spent many winters in California at the home of his daughter. In Ramsey county, Smith became interested in the banking and mercantile business, and by 1929 owned forty quarters of land in Ramsey county and one in Cavalier county, valued by the trial court at $ 200,000, with encumbrances of $ 30,000 to $ 40,000 (seven quarters of the land being clear of encumbrance), two quarters in McKenzie county and one in McLean county, valued at $ 12,000, owned notes and other securities of face value of $ 10,000 -- valued at that time at $ 7,500 -- some town lots in Crary with a store building, the rear of which was used by and owned by a bank, shares of stock in the First National Bank of Crary of the par value of $ 15,000 and other personal property.

By 1929 the bank required assessments on stock to maintain its credit and to protect the bank. Smith made contributions from time to time amounting to $ 30,000. He was also a surety and guarantor on bonds, undertakings and notes to various banks amounting to over $ 30,000, owed doctors' bills amounting to $ 6,600, an account of $ 400 and plaintiff's claim.

Until a few years ago he gave his personal attention to his own business, and then for some time he relied upon one H. S. Pond, who was associated with him in the banking business. In 1929 he employed the defendant Morris to take charge of his business. At this time he knew that he was liable also to the creditors of the bank for additional $ 15,000 on his stock and determined, because of his advancing age and the distance he lived from his property, to arrange his affairs in such a way that he would be able to pay all of his debts -- approximately $ 60,000 -- secure enough to sustain him for the remainder of his life and leave some property to his daughter and her children.

The defendant Walker has resided in Southern California for many years. While there she accumulated some property, her father assisting her in the purchase of a residence. Upon the death of her mother she received half of the mother's estate. The record shows that in the estate of the mother the property involved in the final distribution consisted of cash in the bank, $ 9,678.31, certificates of deposit, totaling $ 4,183.74, shares of stock in the bank appraised at $ 1,000, 59 shares of stock in the Northern States Power Company appraised at $ 5,900, one share of stock in the Empire Gas and Fuel Company appraised at $ 1,100, promissory notes appraised at $ 2,000, real estate mortgages exceeding $ 2,200; and $ 4,000 distributed prior thereto. Defendant Walker was entitled to one-half of this and all was turned over to her father. When a child, friends gave her various sums amounting in all to four or five hundred dollars, and from time to time prior to her marriage she received small gifts from her father, all being invested in a half section near Crary which she owned. Upon divorce from her husband she was awarded $ 600 per month alimony and got from him five thousand dollars through the sale of oil equipment. The amount of alimony paid is not shown. By 1929 she owned property real and personal which she valued at $ 20,000, all of which, except the land, she turned over to her father to be paid back to her later out of his property. Her claim is that her father owed her $ 20,000.

The defendant Morris has resided in southern California all his life and for many years was engaged in the real estate and other business. In 1929 he became acquainted with the defendant Smith. His testimony is that his annual income from his business at the time Smith employed him was $ 7,500.

In May 1929, there was a conference between the...

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