McGuigan v. Heuer
| Decision Date | 08 August 1936 |
| Docket Number | 6415 |
| Citation | 268 N.W. 679,66 N.D. 710 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Cass County; P. G. Swenson, Judge.
Action by James McGuigan, as administrator of the estate of Carl Heuer, deceased, against Ottilia Heuer and others. From an adverse judgment, plaintiff appeals.
Affirmed.
Syllabus by the Court.
1. Whether there was a delivery of a deed depends upon the intention of the grantor, which is mainly a question of fact.
2. Where a grantor executes and acknowledges a deed for the purpose of passing title to land and hands the deed to the grantee unconditionally so that the grantor shows he parts with all control of the deed, the delivery is absolute.
3. In order to establish delivery, it is not necessary to show the grant was actually delivered into the possession of the grantee if the deed is delivered to a third person for the benefit of the grantee and the assent of the grantee is shown, or may be presumed.
4. A grant takes effect upon the delivery of the instrument.
5. Before a deed can be set aside as a fraudulent conveyance, a fraudulent intent, actual or constructive, must be shown, and such fraud must exist at the time the transfer is made.
6. In the case at bar the evidence is examined, and it is held that at the time the deeds involved were executed and delivered the creditor alleging fraud had ample security for his debt, the grantor did not render himself insolvent by the transfers, and the deeds were executed in good faith and without an intent to defraud creditors.
Burnett Bergesen & Haakenstad and Shure & Murphy, for appellants.
A creditor as defined by the laws of this state includes the holder of every possible claim that may be discharged by the payment of money and that may be made the basis of a judgment for money. Griffin v. Allis-Chalmers Mfg. Co. 65 N.D. 379, 259 N.W. 89; Soly v. Aasen, 10 N.D. 108, 86 N.W 108.
It is not the consideration but the intent that determines whether the transfer is valid as to creditors. Sheridan v. McCormick, 39 N.D. 641, 168 N.W. 59, 8 A.L.R. 523.
Even an adequate consideration will not sustain a transfer made with intent to defraud, nevertheless, the lack of such consideration is in itself a fact to be considered in ascertaining the nature of the intent. Salemonson v. Thompson, 13 N.D. 182, 101 N.W. 320; Holden v. Walker, 63 N.D. 372, 248 N.W. 318; Johnson v. Rutherford, 28 N.D. 87, 147 N.W. 390; Bank v. Mensing, 46 N.D. 184, 180 N.W. 58; Dalrymple v. Trust Co. 9 N.D. 306, 83 N.W. 245; Rasmussen v. Chambers, 52 N.D. 648, 204 N.W. 178; Bank v. Armstrong, 54 N.D. 35, 208 N.W. 847; Harvester Co. v. Hecker, 36 N.D. 91, 161 N.W. 1007.
The fact that the transactions were separated by intervals of time does not necessarily make them isolated and distinct. Gwillim v. Asher (Colo.) 204 P. 609; Graham Grocery Co. v. Chase, 75 W.Va. 775, 84 S.E. 785.
A clear and unmistakable intention on the part of the donor to make a gift of his property is an essential requisite of a gift inter vivos. 28 C.J. 627.
Burdick & Burdick and Nilles, Oehlert & Nilles, for respondents.
In a suit to set aside an alleged fraudulent conveyance, the burden of proof is upon the plaintiff and the alleged fraud must be proved by clear and convincing evidence. Strampher v. Hupe, 60 N.D. 692, 236 N.W. 247; McKillip v. Farmers Bank, 29 N.D. 541, 151 N.W. 287, Ann. Cas. 1917C, 993; Bernauer v. McCaull-Webster Elevator Co. 41 N.D. 561, 171 N.W. 282; Union Nat. Bank v. Person, 48 N.D. 478, 185 N.W. 266; Finch, Van Slyke & McConville v. Styer, 51 N.D. 148, 199 N.W. 444.
A conveyance, valid in its inception, does not become invalid by reason of the fact that the debtor subsequently becomes insolvent. 27 C.J. 466; Strampher v. Hupe, 60 N.D. 692, 236 N.W. 247.
Where the creditor seeks to set aside a transfer of property on the ground that the transfer is fraudulent, it must appear, not only that the debtor fraudulently transferred the same, but, as well, it must appear the transferee co-operated and acted with the debtor to consummate the fraud. Bank of Sanborn v. France, 49 N.D. 1, 177 N.W. 375.
In a fraudulent conveyance case the burden of showing want of consideration rests upon him who seeks to invalidate the instrument. Franck v. Moran (Cal.) 171 P. 841; Waterbury Lumber Co. v. Hinckley, 75 Conn. 187; Re Brigham, 144 Iowa 71, 120 N.W. 1054; Tyner v. Johnson, 119 Md. 627, 87 A. 266; Kipp v. Lamoreaux, 81 Mich. 299, 45 N.W. 1002; Columbus Watch Co. v. Hodenpyl, 135 N.Y. 430, 32 N.E. 239.
Prior lien creditors cannot complain of a subsequent fraudulent conveyance or encumbrance of the property since their rights cannot be affected thereby. 27 C.J. 474.
The delivery of a deed by the grantor to a third person to be held by him and delivered to the grantee upon the grantor's death will operate as a valid delivery, where there is no reservation on the part of the latter of any control over the instrument. 18 C.J. 208.
Where a grantee is in possession of a deed which has been duly executed, the presumption arises that it has been duly delivered, and the burden of proof rests upon the party disputing the presumption. 18 C.J. 418.
If the grantor parts with all control over the deed at the time of its delivery to the third person, the delivery is good, and the title passes to the grantee, although the delivery to him is not to take place until after the grantor's death. Arnegaard v. Arnegaard, 7 N.D. 475, 75 N.W. 797; Souverbye v. Arden, 1 Johns. Ch. 240; Wallace v. Berdell, 97 N.Y. 13; 2 Jones, Real Prop. § 1277; Hunt v. Holmes, 64 N.D. 389, 252 N.W. 376; Hulet v. Northern P.R. Co. 14 N.D. 209, 103 N.W. 628; Dalrymple v. Security L. & T. Co. 9 N.D. 306, 83 N.W. 245.
Carl Heuer, deceased, was the husband of the defendant Ottilia Heuer, and Adolph Heuer and Walter Heuer are their children. Carl Heuer and his wife deeded a half section of land to Adolph Heuer and a half section of land, including the homestead, to Walter Heuer; and Carl Heuer deeded three and one-half quarters of land to his wife, two quarters being mortgaged at that time, -- all deeds being dated May 10, 1926, and recorded some six months after the death of the grantor.
Carl Heuer died May 9, 1930. On March 14, 1934, on the application of one Henry Heuer, a brother of Carl Heuer, the plaintiff was appointed administrator of the estate of Carl Heuer.
There is no question but what Henry Heuer is a creditor of the estate, with a valid claim exceeding $ 10,000.00; and unless the land involved be subjected to this claim there is no estate from which he may realize on his claim. The county court authorized the bringing of this action for the benefit of the creditor, and the administrator seeks to set aside the deeds, alleging, in Paragraph 10 of the complaint:
After the death of the father some of the lands involved were deeded to other of the defendants.
The trial court found that these three original deeds "were good and valid transfers made in good faith and without the intent to defraud creditors or hinder or delay creditors in the collection of their debts; said transfers and conveyances were not fraudulently made and that the said Carl Heuer by the making, execution and delivery of said conveyance, did not thereby render himself insolvent; that there was a valid delivery of said deeds on or about May 10th, 1926, and title to said conveyed property passed on or about said date; that at said time the said creditor Henry Heuer had security for his said indebtedness in an amount equal to or greater than the amount of his said indebtedness and that the said Carl Heuer retained assets of substantial value, both real and personal."
Judgment was entered in conformity with the findings and the plaintiff appeals, demanding a trial de novo.
It is now claimed by the plaintiff there was no delivery of these deeds, and it is asserted the grantor attempted to make gifts and that the transactions are shown to be largely, if not entirely, a testamentary disposition of his property -- that is, the grantor did not intend to pass title until after his death and that the inference is he took this means of disposing of his real estate in order to avoid probate proceedings.
Both contentions are disposed of by the fact of delivery of the deeds, and cannot be sustained. In the first place the question of delivery is not raised in the pleadings; in fact, the complaint charges the deeds were executed and accepted by the grantees.
Again, the instruments involved are grants of property and under the provisions of § 5522 of the Comp. Laws such grants are "conclusive against the grantor and every one subsequently claiming under him, except a purchaser or incumbrancer who in good faith and for a valuable consideration, acquires a title or lien by an instrument that is first duly recorded."
The grant is presumed to have been delivered at its date. Comp Laws, §...
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