Lane v. Gugsell

• Decision Date: 05 April 1943
• Docket Number: 16866.
• Citation: 47 N.E.2d 835,113 Ind.App. 676
• Parties: LANE v. GUGSELL
• Court: Indiana Appellate Court

47 N.E.2d 835

113 Ind.App. 676

LANE v. GUGSELL

No. 16866.

Appellate Court of Indiana, in Banc.

April 5, 1943

Rogers & Waller, of Washington, Lane & Lane, of Jasper, and Samuel A. Lambdin, of English, for appellant.

Louis A. Savage, of Jasper, for appellee.

DRAPER Judge.

The appellee filed this action to recapture a piece of real estate which he had previously deeded to the appellant. The complaint was in two paragraphs, a demurrer to each of which was overruled with exceptions to the appellant. The Court found for the appellee and appointed a commissioner to reconvey the property to him. The assigned errors are the overruling of the demurrer to each paragraph of the complaint, the exclusion of certain additional evidence offered by appellant at the time of the ruling on the motion for new trial, and the overruling of the motion for new trial.

The evidence most favorable to the appellee discloses that he is a medical doctor. Upon the death of his mother he inherited the property in question and shortly thereafter employed the appellant, an attorney-at-law, to attend to the estate matter and to defend a suit on a note which was filed against appellee within a day or two after his mother's death. The suit on the note resulted in a judgment against the appellee but a new trial was granted and on the same day and while said suit was pending for retrial, he deeded the property to the appellant. The conveyance was at the appellant's suggestion, and without consideration, but upon appellant's promise to reconvey after the final settlement of the litigation. The appellee had confidence in and trusted the appellant to reconvey as promised. The conveyance was suggested and made for the purpose of "saving" the property to the appellee, or in other words to cheat, delay and defraud the appellee's creditors and was in direct violation of § 10-2117 Burns' 1940 Replacement, which provides a penalty of fine and imprisonment for one to make or aid in making a conveyance of land or any interest therein for such purpose. Some time after the transfer of the property the appellant suggested that he should begin collecting the rents so that the transaction would not have the appearance of a "crooked" deal. This was assented to by appellee and for a time the appellant did collect the rents. At a conditional examination taken in connection with the suit on the note, and after the conveyance of the property, the appellee and his wife gave perjured testimony to the effect that the appellant had paid $1,300 cash for the property and assumed a mortgage against it. This false testimony was suggested by the appellant and he coached the witnesses in it before they testified. The note liability was later compromised and settled by part payment of it and the appellee demanded reconveyance, which was refused.

The evidence was conflicting. The appellant denied wrongdoing and insisted that he paid $1,300 cash for the deed. His version of the transaction, however, does not seem to us to be in accord with the probabilities and there is abundant evidence to support the finding of the Court.

It is contended by the appellant that the evidence most favorable to the appellee discloses such fraud and wrongful conduct on his part as to place the parties in pari delicto, and that the law will leave the appellee where it finds him.

It is the general rule that one who vests the legal title to his property in another, for the purpose of putting it out of the reach of and defrauding his creditors, cannot recover the property on the theory that there was no consideration for the conveyance or that there was an agreement to reconvey. Bellin v. Bloom et ux., 1940, 217 Ind. 656, 28 N.E.2d 53.

An exception to the rule is that when a relation of trust and confidence exists, and the party in whom trust is reposed has obtained a benefit, the burden will be upon him to show that the transaction was fair and proper, and relief will not be denied the one least at fault if he has been led into the illegal transaction because of ignorance and reliance upon and trust in the other. Novak et al. v. Nowak, 1940 216 Ind. 673, 25 N.E.2d 993, and where it appears that the public interests will be better promoted by granting relief to the plaintiff than by denying it, courts of equity, acting with proper caution, may intervene even though the parties are equally guilty. Gilchrist et al. v. Hatch, 1915 183 Ind. 371, 106 N.E. 694, Ann.Cas. 1917E, 1030.

It must be admitted that the appellee was not misled by reason of ignorance, illiteracy or lack of understanding, for he was a man of intelligence and education and understood the impropriety of his conduct. Nevertheless we are of the opinion that under the facts in this case, while the parties are in...