Hunt v. Holmes
| Decision Date | 15 January 1934 |
| Docket Number | 6213 |
| Citation | 252 N.W. 376,64 N.D. 389 |
| Court | North Dakota Supreme Court |
Rehearing Denied February 3, 1934.
Appeal from the District Court of Burke County, Lowe, J.
Reversed.
Hanson & Hanson, for appellant.
While transactions between parties nearly related should be carefully scrutinized they are not presumptively fraudulent. Hohaus v. Argersinger, 58 N.D. 704, 227 N.W. 197; Finch, Van Slyke & McConville v. Styer, 51 N.D. 148, 199 N.W 444.
Any one challenging the validity of a transaction must show it to be fraudulent and the burden of proof is not sustained merely by proof of circumstances which give rise to suspicion. First Nat. Bank v. Mensing, 46 N.D. 184, 180 N.W 58; First Nat. Bank v. Sullivan, 60 N.D. 391, 234 N.W. 658; 2 C.J. 1274, 1277.
The legal presumption, prima facie, is that alterations appearing upon written instruments were made before delivery. Bank v. Laughlin, 4 N.D. 391, 61 N.W. 473; Cass County v. American Exch. State Bank, 9 N.D. 263, 83 N.W. 12.
Palda, Brace & Palda, for respondent.
If a deed is altered fraudulently after delivery by the grantee, substituting the name of another for his own, it is void. Beugh v. Mitchell, 3 App. D.C. 321, L.R.A.1917E, 816.
No alteration of a deed after it has once been delivered will have any effect upon the grantee's title. L.R.A.1917E, 817 annotation.
A deed is merely the medium for the transfer of the title from the grantor to the grantee, and when its purpose is once fully accomplished its subsequent disposition cannot affect the title it has conveyed. Clark v. Creswell, 112 Md. 339, 76 A. 579, 21 Ann. Cas. 338.
If any suspicion is raised as to the genuineness of an altered instrument, whether it be apparent upon inspection or is made so by extrinsic evidence, the party producing it, and claiming under it, is bound to remove the suspicion by accounting for the alteration. Alabama State Land Co. v. Thompson, 104 Ala. 570, 53 Am. St. Rep. 80; Galland v. Jackman, 20 Cal. 79, 85 Am. Dec. 172; Magoffin v. Watros, 45 N.D. 406, 178 N.W. 134; Perry v. Erdelt, 59 N.D. 741, 231 N.W. 888.
A wife relying upon a gift from her husband must show that, at the time, his liabilities were not out of proportion to his assets. People's Sav. Bank v. Scott, 303 Pa. 294, 154 A. 489, 79 A.L.R. 129; Arthur v. Morrow, 131 Md. 59, 101 A. 777, L.R.A.1918A, 450.
Against existing creditors, a voluntary conveyance by a debtor is in law per se fraudulent and void, without regard to the intention of the debtor. Lehman v. Gunn, 124 Ala. 213, 27 So. 475, 51 L.R.A. 112.
A voluntary conveyance made to hinder, delay or defraud creditors is void as to them where the grantor was insolvent without the property so conveyed. Campbell v. Ponds, 52 Ark. 493, 12 S.W. 1016, 6 L.R.A. 783; National Bank v. Appel Clothing Co. 35 Colo. 149, 83 P. 905, 4 L.R.A.(N.S.) 456; Ludlow Sav. Bank & T. Co. v. Knight, 92 Vt. 171, 102 A. 51, 2 A.L.R. 1433; Levi v. Levi, 156 Iowa 297, 136 N.W. 696.
Legal demands of creditors must be satisfied before a debtor can make gifts of unexempt property. Murphy v. Casey, 151 Minn. 480, 187 N.W. 416; Chamberlain v. Foy, 205 Iowa 662, 216 N.W. 700.
A debtor's conveyance without consideration is fraud as to existing creditors. King v. Comstock, 245 Mich. 156, 222 N.W. 74.
Conveyance, if voluntary gift by insolvent grantor, may be successfully attacked in equity by creditors. Lietz v. Grieme (Iowa) 236 N.W. 395.
Voluntary conveyance by debtor to defraud creditors may be set aside at suit of creditors. Johnson v. Warrington (Iowa) 240 N.W. 668; Soly v. Aasen, 10 N.D. 108, 86 N.W. 108.
A husband cannot give property to his wife without consideration to the detriment of those having valid claims against him. 27 C.J. 565; Braffman v. Glover, 35 S.C. 431, 14 S.E. 935; Green v. Mobley, 112 S.C. 275, 99 S.E. 814; Olpe St. Bank v. Bolz (Kan.) 12 P.2d 787; Montalbano v. Mazziatta, 260 N.Y.S. 224; Hatcher-Powers Shoe Co. v. Sparks, 35 S.W.2d 564.
In this action the plaintiff, in substance, alleges in his complaint that prior to the 6th day of November, 1930, one Ralph v. Carter was indebted to Charles T. Holmes and to secure the payment of said indebtedness executed a mortgage on lots 5 and 6, block 22 of the townsite of Portal, Burke county, North Dakota; that on or about the 6th day of November, 1930, said Ralph Carter and Mrs. Carter, in payment of said indebtedness, made, executed and delivered to the said Charles T. Holmes, a warranty deed, conveying said premises; that the name of Hazel L. Holmes was inserted in the deed above described, as grantee at the express request and direction of the said Charles T. Holmes for the purpose of concealing the fact that said property belonged to the said Charles T. Holmes; that at the time of said conveyance Charles T. Holmes was indebted to this plaintiff and an action was then pending in the district court of Burke county which resulted in a judgment of $ 5,575.79 and costs taxed at $ 25.55, and it was further adjudged in said action that the defendant, H. W. Gill, as executor of Charles T. Holmes, deceased, pay the said judgment with costs out of the estate of said Charles T. Holmes in the regular course of administration thereof; that a transcript of said judgment was filed in the county court of Burke county as a claim against said estate and was allowed and ordered paid; that there are other creditors of said estate having claims allowed and ordered paid, but there is not sufficient assets in the hands of the executor for the payment thereof, and the plaintiff brings this suit in his own name for himself and on behalf of the other creditors; that there was no consideration for the deed to Hazel L. Holmes and the deed was never delivered; plaintiff alleges that the said property is, in equity, a part of the estate of Charles T. Holmes and prays that the same be subjected by said executor to the payment of claims against said estate; that the title of said estate be quieted as against the defendant Hazel L. Holmes.
Hazel L. Holmes, appearing by Ida Holmes, her guardian ad litem, for her answer alleges, in substance, that since the 6th day of November, 1930, she has been the owner in fee simple of the said premises; that Charles T. Holmes had the said land conveyed to her as a gift and did direct and procure Ralph V. Carter and Mary V. Carter to issue and give said deed to said premises to Hazel L. Holmes as grantee for her use and benefit; that Ida Holmes, for the use and benefit of the said Hazel L. Holmes, paid past due delinquent taxes against said premises for the years 1928, 1929, 1930, 1931, amounting to $ 393.76, and the further sum of $ 120.00 due on a real estate mortgage against said premises and $ 30.00 for repairs. Answering, the defendant further alleges that Hazel L. Holmes is the owner in fee of said premises and prays to have the title quieted in her.
There is a stipulation of facts in the case wherein it appears that Charles T. Holmes died on the 10th day of November, 1931. The 5th paragraph of the stipulation states that on the 6th day of November, 1931 (this is evidently a clerical error, as the deed is dated November 6th, 1930), Ralph V. Carter and Mary V. Carter for the purpose of making payment of said indebtedness to Charles T. Holmes made, executed and delivered to said Charles T. Holmes their certain deed, conveying the property above described, and that said Hazel L. Holmes was named as grantee in said deed at the request of said Charles T. Holmes and with the consent of the said Ralph V. Carter and Mary V. Carter; that at the time of said conveyance Charles T. Holmes was indebted to the plaintiff and there was an action then pending which resulted in a judgment in favor of the plaintiff for the sum of $ 5,575.79, which judgment the executor of Charles T. Holmes was ordered to pay and on the filing of the said judgment against the said estate of Charles T. Holmes in the county court, it was allowed and ordered paid by the county judge; that the deed was delivered by the said Charles T. Holmes to William Metzger, who filed the deed for record in the office of the register of deeds, April 15, 1932, and the same was duly recorded. That at the time of the execution of the deed to Hazel L. Holmes she was fifteen years of age and that at said time the said Ralph V. Carter and Mary V. Carter, his wife, for the purpose of paying and satisfying the indebtedness to the said Charles T. Holmes, as set forth in paragraph three of the complaint, agreed to convey said premises to the said Charles T. Holmes and thereupon the said Charles T. Holmes, desiring and intending to convey the said premises as a gift to his daughter, the said Hazel L. Holmes, and in furtherance of said desire and intent, the said Charles T. Holmes did then direct and procure the said Ralph V. Carter and Mary V. Carter, his wife, to issue and give said deed to said premises in the name of said Hazel L. Holmes, as grantee.
There is some oral testimony from which it appears that shortly after the execution of the deed, Charles T. Holmes delivered the deed to William Metzger, who states that at the time of handing him the deed he said he was giving the property to Hazel and that if anything happened to him he would want the girl to have some -- (witness interrupted); that it was impossible to put the deed on record as the taxes were not paid for the year 1928 and from then on. As soon as the taxes were paid he had the deed recorded....
To continue reading
Request your trial