Johnson v. Gardner

• Decision Date: 10 April 1950
• Docket Number: No. 12244.,12244.
• Parties: JOHNSON et al. v. GARDNER.
• Court: U.S. Court of Appeals — Ninth Circuit

179 F.2d 114 (1949)

JOHNSON et al. v. GARDNER.

No. 12244.

United States Court of Appeals, Ninth Circuit.

December 28, 1949.

Writ of Certiorari Denied April 10, 1950.

Morris Lavine and Hiram E. Casey, Los Angeles, Cal., for appellants.

Thomas S. Tobin, Los Angeles, Cal., for appellee.

Before STEPHENS and POPE, Circuit Judges, and McCORMICK, District Judge.

McCORMICK, District Judge.

George Gardner, the appellee, as trustee in bankruptcy for the Estate of Ruth Vena Johnson, also known as Ruth Boyce, a voluntary bankrupt, conformable to provisions of the National Bankruptcy Act¹ and the Uniform Fraudulent Conveyance Act² brought suit in the District Court to avoid certain purported transfers of real property situate in Los Angeles, California.

The bankrupt, a resident of Los Angeles; her daughter, a resident and citizen of Scotch Plains, New Jersey, and her three minor grandchildren, also residing with their mother and who are represented by their mother as guardian ad litem, were made defendants in the court below, and they are named as appellants in this appeal.

The amended complaint averred substantially that the transfers and the conveyances from Ruth Vena Johnson to the other defendants by which such transfers were to be effectuated were without a fair consideration and were intended to hinder, delay and defraud creditors, both present and future, as of the respective times of such conveyances. It was also alleged that under a general power of attorney which Ruth Vena Johnson obtained from her daughter, defendant Gladys Venes, she has been collecting the rentals from the real property in suit.

The relief prayed for in the amended complaint by the trustee in bankruptcy was a decree that the conveyances were fraudulent and void as to the trustee and as to the creditors of defendant Ruth Vena Johnson; that the recorded deeds purporting to convey the real property in suit be ordered cancelled of record, and the record title of such real property be vested in the trustee in bankruptcy for the estate of Ruth Vena Johnson, also known as Ruth Boyce; that defendant Ruth Vena Johnson be required to account to the plaintiff trustee in bankruptcy for all rents, issues and profits collected from such real property and used by her, and that a money judgment be rendered against her in favor of plaintiff trustee in bankruptcy as may be determined by the court below to have been so wrongfully used by defendant Ruth Vena Johnson; that plaintiff recover costs of suit and be accorded such further relief as the court deemed just and equitable in the premises.

The defendants all duly appeared, and through their employed attorney, Rupert B. Turnbull, Esq., on February 10, 1948, filed a joint answer to the amended complaint, which answer was verified by defendant Ruth Vena Johnson. All allegations of fraud or of the insufficiency of consideration relative to the transfers or the conveyances of the real property in controversy were substantially denied and the validity and good faith of the questioned transfers and conveyances by Ruth Vena Johnson to the other defendants was averred.

The answering defendants, other than Ruth Vena Johnson, prayed that the District Court determine and decree the title to the real property in suit to be vested in the defendants other than Ruth Vena Johnson, and all of the defendants demanded that the plaintiff trustee in bankruptcy take nothing by his action and that defendants have judgment for their respective costs.

Upon the call of the case for trial on November 23, 1948, under the issues of the amended complaint and answer, for the first time the question of the right or advisability of a jury trial of the suit was presented in the District Court. At that time a panel of jurors was in attendance as the result of a recent demand made subsequent to the period prescribed in Rule 38 of the Federal Rules of Civil Procedure by defendant Ruth Vena Johnson in person and on behalf of all defendants for a jury trial of the action. The defendant Gladys Venes had through a misapprehension shortly prior to the day of the commencement of the trial sent $48.00 by telegram to the court as a deposit for jury fees assuming such was required in the United States District Court as in State Courts of California. This money was returned to the Telegraph Company by order of the trial judge. Other than these two incidents, at no time during the pendency of the action had there been any demand whatever by any of the defendants or their attorney for a trial by jury of any of the issues in the case.

On the contrary, Attorney Turnbull, an experienced lawyer, who was fully informed as to the rules pertaining to jury trials in the District Court³ stated positively at the opening of the trial that at no time while he acted as the attorney for any of the defendants did he demand or intend to demand a jury for the trial of the action and that the defendant Ruth Vena Johnson knew such to be his attitude but that he had "noticed" the morning of the commencement of the trial that "Mrs. Johnson said she wanted a jury." However, no compliance with the requirements of Rule 38 (d), F.R.C.P., appears to have been made.

It appears that Attorney Turnbull and the bankrupt had some disagreement concerning the case and that Mr. Turnbull prior to the commencement of the trial in the District Court had been discharged by her as her attorney and had returned "all of the papers to Mrs. Johnson," and under her general power of attorney from her daughter Mrs. Johnson at the opening of the trial in the court below had also discharged Mr. Turnbull as attorney for all other defendants and, with the permission of the trial judge, he withdrew as an attorney in the action.

The plaintiff trustee in bankruptcy through his attorney contended in the court below that the action was of equitable cognizance, that is to say, it was a suit in equity to avoid a fraudulent conveyance and for an accounting and as such was not a jury case unless the trial judge desired to impanel a jury and render an advisory verdict.

The trial judge having considered the situation as to the nature of the suit, the character of the issues under the pleadings, the relief sought by the parties and the respective action of the suitors, ruled that the jury had been waived in the case and excused the members of the jury panel who were in attendance. The defendant Ruth Vena Johnson thereupon proceeded to try and conduct the case herself and did so throughout all subsequent sessions and proceedings to the entry of final judgment in the court below.

Appropriate findings of fact and conclusions of law were made and entered upon the evidence introduced in the action, and the judgment from which this appeal has been taken was entered on February 10, 1949. No questions are raised in this appeal as to the sufficiency of the evidence to sustain the findings of fact, conclusions of law or the judgment.

The court decreed that two questioned transfers of real property situate in Los Angeles, California, are fraudulent and void as to creditors of Ruth Vena Johnson, a bankrupt, and as to her trustee in bankruptcy and should be canceled of record, annulled and set aside. The judgment also decreed the trustee in bankruptcy to be the owner and entitled to the immediate possession of the real property in suit, and further adjudged that neither Gladys Venes nor any of her children appearing through her as their guardian ad litem have any title, interest, lien or claim whatever to such real property. As to the trustee's demand for an accounting by Ruth Vena Johnson for the rents, issues and profits of the real property in controversy, the decree required none to be made. Plainti...