Horton v. Kelly
| Decision Date | 05 March 1889 |
| Parties | HIRAM T. HORTON <I>vs.</I> JOHN B. KELLY and another. |
| Court | Minnesota Supreme Court |
Plaintiff, a judgment creditor of the defendant John B. Kelly, brought this action in the district court for Olmsted county, to avoid as fraudulent a voluntary conveyance of the N. ½ of the S. E. ¼ of section 9, town 105, range 14, in that county, made by the judgment debtor and his wife to their son, the defendant Joseph Kelly. The action was tried by Start, J., who found these facts: On May 21, 1879, the defendant John B. was indebted to plaintiff in the sum of $1,300, for a balance of which the plaintiff, on May 23, 1885, recovered and docketed a judgment against him, on which there remains due $650.90, with interest from its date. On May 21, 1879, the defendant John B. owned the tract above described (the N. ½ of the S. E. ¼) and also the E. ½ of the N. E. ¼ of the same section, the whole being an improved farm worth $2,200, and he continued to own both tracts until April 17, 1880, when he mortgaged them (his wife joining) to one Linton, to secure payment of a just debt of $2,000 in five years from that date, with interest at 8 per cent. per annum. The E. ½ of the N. E. ¼ had for several years been John B.'s homestead and was such when, on February 4, 1882, being insolvent, he, with his wife, executed and delivered to the defendant a conveyance in fee of the N. ½ of the S. E. ¼. At that time there was due on the mortgage to Linton the principal sum of $2,000, and interest from April 17, 1881. The consideration expressed in the deed was Joseph's agreement to pay, as the purchase price, one-half the mortgage debt, and to release certain alleged claims against his father for services. The court also made part of its findings the findings of the jury on issues submitted to it, to the effect that John B. intended by the conveyance to defraud his creditors, that Joseph had notice of such intent, and that the 80 acres conveyed were of the market value of $1,400 at the time of the conveyance, the court, however, upon the admissions in the answer, finding the value to be $1,600. As conclusions of law the court held that defendant John B. had the right in equity to have the 80 acres not his homestead first applied in payment of the mortgage debt, and as that was more than $400 over and above the value of the 80 acres so conveyed, the conveyance could not actually defraud creditors. Judgment was accordingly ordered and entered for defendants, and the plaintiff appealed.
Burt W. Eaton and Davis, Kellogg & Severance, for appellant.
Chas. C. Willson, for respondents.
The debtor John B. Kelly was, as between him and his mortgagee, entitled to have the non-exempt 80-acre tract first applied in satisfaction of the mortgage mentioned in the findings of the trial court. McArthur v. Martin, 23 Minn. 74. The mortgage, which covers an entire quarter-section, including the homestead of the mortgagors and the 80 acres in question, is overdue, and the amount due thereon exceeds the value of the non-exempt 80-acre tract by more than $400. This tract, it appears, was transferred by deed by John B. Kelly and wife to their son, the defendant Joseph Kelly, subsequent to the...
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