Kingsbury v. Christy
| Citation | 21 Ariz. 559,192 P. 1114 |
| Decision Date | 03 November 1920 |
| Docket Number | Civil 1797 |
| Parties | W. J. KINGSBURY, Appellant, v. CHARLES B. CHRISTY, Trustee of the Estate of PHOENIX HARDWARE COMPANY, a Corporation, Bankrupt, Appellee |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Maricopa. Samuel L. Pattee, Judge. Reversed.
Mr Earl Anderson, for Appellant.
Mr. J C. Forest, for Appellee.
This suit was commenced by the plaintiff, Charles B. Christy, as trustee of the estate of the Phoenix Hardware Company, a bankrupt corporation, against the defendants, M. West and W J. Kingsbury, to set aside a certain conveyance of real estate from the defendant West to the defendant Kingsbury and to declare such conveyance fraudulent and void as against the creditors of the defendant West.
The complaint in effect, intent and purpose alleges that at a date prior to the commencement of the action the plaintiff Christy, as such trustee, recovered a judgment in favor of the estate of the said bankrupt corporation against the said defendant West for the sum of $3,530.65, together with interest, and that for the purpose and with the intent of hindering and delaying the collection of said judgment the said defendant West had, before the rendition of said judgment, transferred all of her property, consisting of lots 6 and 7, block 59,in the town of Tempe, Maricopa county, to the said defendant Kingsbury, her son-in-law, without any consideration and that by such conveyance the said defendant West rendered herself wholly insolvent.
The complaint further alleges that the said defendant Kingsbury knew at the time of such pretended sale and conveyance of said real estate to him that the same was made with the intent and for the purpose of delaying, hindering and defrauding the creditors of the said defendant West. The prayer of the complaint is that the conveyance may be set aside, and that the lots be subject to the satisfaction of the plaintiff's judgment previously obtained.
The defendants, West and Kingsbury, filed a joint answer in which they admit the conveyance to the said defendant Kingsbury by the said defendant West and that such conveyance was made without any money consideration. They deny that the said West was the real owner of said lots, and allege that the defendant Kingsbury was the true owner of said premises. They deny that there was any intent to delay or hinder the collection of the plaintiff's judgment or that there was any fraud in the conveyance sought to be set aside. They furthermore affirmatively allege in the answer that the defendant Kingsbury had previously transferred the lots to the defendant West without receiving any consideration therefor, and that such conveyance was made for the purpose only of enabling the said defendant West to execute bonds at the instance of the said defendant Kingsbury in the conduct of his business as an attorney at law and in his business as a banker.
Upon the issues thus formed the cause proceeded to trial before the court sitting without a jury, which resulted in a judgment in favor of the plaintiff setting aside the conveyance of the lots to the defendant Kingsbury as fraudulent and void against the plaintiff as a creditor of the said defendant West. The defendant Kingsbury appeals.
The court of its own volition made and filed findings of facts in the case, among which is the following finding:
The defendant Kingsbury insists that this finding was erroneous in that it is unsupported by the evidence and is in fact contrary to the evidence.
The burden of proving the fraud alleged was upon the plaintiff, and, as he was opposed at the outset by the presumption of honesty and legality that prevails in favor of the ordinary business transactions among men, it was incumbent upon him to prove by clear and satisfactory evidence that the conveyance which he assailed was in reality fraudulent and void as to him. This he was required to do by direct proof of the fraud or by proof of facts and circumstances from which the fraud might reasonably be inferred. Fraud is never presumed. Bump on Fraudulent Conveyances, 3d ed., 600, 604, 605, and cases cited.
It sufficiently appears from the uncontradicted testimony that prior to any of the transactions mentioned in the complaint the defendant Kingsbury transferred to the defendant West, who was his mother-in-law, and who was living in his family, the lots described in the complaint, the conveyance to which is sought to be set aside, together with other pieces of real estate not involved in the suit; that the defendant Kingsbury, at the time of such transfers, was engaged in the practice of law, and it was necessary, or at least it was convenient, for him in the conduct of his business to procure or cause to be furnished bondsmen and sureties. He was also engaged in the banking business, and it was convenient for him in the conduct of that business to frequently cause title to real estate to be taken in the name of the defendant West, that she might execute mortgages on the property in her name, instead of the transactions being had in the name of the bank. It was proven that these transfers were made for the purpose and objects stated without any consideration being paid therefor by the defendant West and with the understanding that the property should be retransferred to the defendant Kingsbury by the said defendant West at any time upon his request. We see nothing wrong or fraudulent in these transactions. They were certainly not made to defraud the creditors of the defendant Kingsbury. The defendant West was therefore not a fraudulent grantee. The conveyances being without consideration, a resulting trust was created, and the superior right to...
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