Hutchinson v. Walton
| Citation | 196 S.E. 20,119 W.Va. 709 |
| Decision Date | 15 March 1938 |
| Docket Number | 8647. |
| Parties | HUTCHINSON v. WALTON et al. |
| Court | Supreme Court of West Virginia |
Submitted March 1, 1938.
Syllabus by the Court.
1. The burden of proving fraud rests on the party alleging it. In a deed between near relatives, kinship alone is not a badge of fraud. But when, in such a deed, the grantor is embarrassed financially and the transfer embraces all, or nearly all, of his property, leaving him insolvent, there arises a presumption of fraudulent intent. This presumption may be overcome, but fuller and stricter proof of fairness and good faith is requisite, than if the transaction had been between strangers.
2. Antecedent indebtedness may be a valid consideration for the conveyance of property by an embarrassed debtor to a kinsman "but the vendee, to repel the presumption of fraud raised against him, must clearly and fully prove the debt and the amount thereof." Speidel Grocery Co. v. Stark & Co., 62 W.Va. 512, 59 S.E. 498. Proof, consisting only of indefinite generalizations of prior loans, does not meet this test.
Appeal from Circuit Court, Doddridge County.
Suit to set aside conveyance as in fraud of creditors by W. V Hutchinson against T. F. Walton and another. Decree for plaintiff, and defendants appeal.
Affirmed in part, and reversed and remanded in part.
P. M Ireland, of West Union, for appellants.
W. S Stuart, of West Union, for appellee.
On November 2, 1928, defendant, T. Frank Walton, owing plaintiff $1,300, evidenced by notes due January 10, 1929, conveyed to his sister, Mary P. Walton, his undivided interests in the Walton heirship lands and in the "Longacre" lands, respectively. These deeds divested Frank of all substantial property interests. This suit was brought to set aside the deeds as voluntary, and made to hinder and defraud plaintiff. The circuit court granted him the relief sought.
Each deed stated a consideration of $750. Mary exhibited a check of $750, dated November 2, 1928 (the date of the deed), and paid by the bank January 15, 1929, which both she and Frank testified was the consideration for Frank's interest in the Walton lands. The consideration claimed for the interest in the Longacre lands was pre-existing indebtedness. Mary testified: "I loaned Frank money * * * at different times and then when we had our final settlement he said he was paid." Frank testified: The "final settlement" was not produced, and no details were given of the dates or the amounts of the alleged loans. The quoted testimony is all the evidence relating to the consideration for the second deed. A severe cross-examination of Mary failed to show that she could not have had sufficient money for the two considerations, though she was indefinite for the most part as to dates and sums of money she had acquired. She testified that she did not know of Frank's indebtedness to plaintiff at the time of the conveyances.
The burden of proving fraud rests on the party alleging it. Kesling v. Mick, 103 W.Va. 485, 138 S.E. 386. In a deed between near relatives, kinship alone is not a badge of fraud. But when, in such a deed, the grantor is embarrassed financially, and the transfer embraces all, or nearly all, of his property, leaving him insolvent, fraudulent intent may then be presumed, and the burden of proof shifted "from the party impeaching the transaction on to the party upholding it." Goshorn's Ex'r v Snodgrass, 17 W.Va. 717. Accord: Reilly v. Barr, 34 W.Va. 95, 104, 105, 11 S.E. 750; Butler v. Thompson, 45 W.Va. 660, 31 S.E. 960, 72 Am.St.Rep. 838; Riker v. Gwynne, 129 A.D. 112, 113 N.Y.S. 404, 406, 407; Bump, Fraud. Conv., 4th Ed., § 47; Wait, idem, 3d Ed., § 231; 27 C.J., idem, § 146; Kerr, Fraud & M., 6th Ed., pp. 561, 562. This...
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