Merchants' Nat. Bank of Wimbledon v. Collard

• Decision Date: 11 April 1916
• Citation: 157 N.W. 488,33 N.D. 556
• Parties: MERCHANTS' NAT. BANK OF WIMBLEDON v. COLLARD et al.
• Court: North Dakota Supreme Court

33 N.D. 556

157 N.W. 488

MERCHANTS' NAT. BANK OF WIMBLEDON

v.COLLARD et al.

Supreme Court of North Dakota.

Feb. 23, 1916.

Rehearing Denied April 11, 1916.

Syllabus by the Court.

In an action by a creditor of a vendor to set aside alleged fraudulent conveyances of real property upon the ground that such conveyances were made with intent to hinder, delay, and defraud such creditor, the trial court found adversely to plaintiff's contention, and upon a trial de novo in the Supreme Court the findings of fact, as well as the conclusions of law of the lower court, are, in all things sustained.

The record discloses, by a fair preponderance of the evidence, that there was no intent on the part of either the vendors or vendees to hinder, delay, or defraud any of the vendors' creditors. In the light of such facts, the case of Paulson v. Ward, 4 N. D. 100, 58 N. W. 792, and other similar holdings cited by appellant, are held in no way applicable to the case at bar.

Following Lockren v. Rustan, 9 N. D. 43, 81 N. W. 60,held, that defendant Fried, being a creditor of the vendors, and taking the conveyances in payment of claims held by him, occupies a more favorable position than a mere volunteer purchaser, and the law would not charge him with fraud, even if to his knowledge the vendors were actuated by such fraudulent intent.

The appellant's contention that the conveyances should be adjudged to be fraudulent and void because of certain alleged fraudulent averments contained in the answer of the respondents, to the effect that they are owners in fee of the lands, and that the vendors have no interest in or lien thereon, is, for reasons stated in the opinion, held untenable.

Upon a trial de novo, the Supreme Court, in deciding the facts, acts independently of the trial court's findings, although such findings, when based upon oral testimony, are, of necessity, entitled to and will be given some weight.

The contention that Emma Collard, one of the vendors, is entitled to enforce a certain optioncontract to repurchase the property held not supported by the proof.

Appeal from District Court, Barnes County; Coffey, Judge.

Action by the Merchants' National Bank of Wimbledon against James M. Collard and others. From a judgment for defendants, plaintiff appeals. Affirmed.

F. B. Lambert, of Minot, for appellant. Knauf & Knauf, of Jamestown, for respondents.

FISK C. J.

This is an appeal from a judgment of the district court of Barnes county, and is here for trial de novo.

Plaintiff bank, as a judgment creditor of the defendant, James Collard, seeks to set aside and have adjudged void certain alleged fraudulent conveyances of real property executed and delivered by such defendant and his wife, Emma Collard, to the defendants Anton and Susan Fried. The same attorney who brought this action commenced a similar action for the Royal Elevator Company against the same defendants, which action involved the same issues, and by consent of all parties the two actions were consolidated and tried as one action in the court below, but separate findings, conclusions, and judgments were entered in each. No question is raised as to the right of these plaintiffs to maintain such actions, it being conceded, or at least not questioned, that they each had, prior to the commencement of the actions, duly acquired a lien by judgment and levy of execution upon any interest held by the Collards in the real property in controversy. The crucial, and in fact about the only, issue raised by the pleadings is as to whether the deeds from the Collards to the Frieds were void as in fraud of Collards' creditors.

[1] The learned trial court, after hearing the testimony, which was practically all oral, resolved such issue in favor of the defendants; and, after duly considering such testimony as best we can from the typewritten record, we deem such findings in accord with the preponderance of the evidence, and we adopt them as our findings on this appeal. The record is quite voluminous, and it would serve no useful purpose to attempt a review of the testimony in this opinion, and we shall refrain from so doing. We, however, deem it proper to here set forth the substance of the findings and conclusions of the trial court. They are as follows:

(1) Plaintiff is a domestic corporation.

(2) Defendants, James M. and Emma A. Collard are husband and wife, each having full authority to represent the other in all the transactions involved herein.

(3) That defendants Anton and Susan Fried are husband and wife, with like authority of each to represent the other in all such transactions.

(4) That on July 16, 1914, plaintiff bank duly recovered and caused to be docketed in Barnes county a judgment by confession against James M. Collard for the sum of $869.79, which judgment is of record and wholly unsatisfied, and which judgment was for an indebtedness incurred more than three years prior thereto.

(5) That on or about August 31, 1914, an execution was duly issued on such judgment, and on or about September 2, 1914, the same was returned nulla bona. On September 4, 1914, an alias execution was duly issued, and after indorsing thereon his inability to find any personal property upon which to levy, the sheriff in due form levied upon all the real property in controversy, giving due notice thereof to defendant James Collard, which levy is still in full force.

(6) That on June 22, 1911, the Collards, for a good and valuable consideration, executed and delivered to defendant Anton Fried a warranty deed to a portion of the land in controversy, to wit, the W. 1/2 of the E. 1/2 of section 6, township 143, range 60, in Barnes county, which deed was duly recorded on July 12, 1911. Such deed was given subject to a mortgage for $1,800 and a commission mortgage for $90, running to one Charles H. Smith. At the time this deed was executed and delivered, and as a part of the same transaction, defendant Anton Fried gave to the Collards a contract, agreeing to reconvey said land to them upon the payment of $4,050, with interest on $1,800 thereof at 7 per cent., and the balance of said sum of $4,050 was represented by a note for $2,250 in favor of Anton Fried. Defendant Collard retained possession of the land under such contract. Thereafter, and on August 2, 1913, the Collards transferred by warranty deed the other lands described in the complaint, consisting of three quarters owned by James M. Collard, to the defendant Susan Fried, for an expressed consideration of $1. Such deed contained a covenant that such land was free from incumbrance, except a mortgage to the Middlesex Banking Company, one to Moore Bros., and one to Anton Fried. This deed was duly recorded on August 6, 1913. As a part of such transaction the Collards on said date delivered up for cancellation to the Frieds the contract for the purchase of the quarter first described, the consideration for the surrender of such contract and the giving of the two deeds above described transferring all right, title, and interest of the Collards to the lands described in such deeds to Anton and Susan Fried, respectively, being the agreed price of $30 per acre, or a total of $19,200, it being then and there agreed between the defendants that Susan and Anton Fried would assume the incumbrances against said land as a part of the purchase price, and would deduct from such purchase price, in addition to such incumbrances, all accounts owing by the Collards to them, or either of them, paying any balance found to be due on such purchase price to James M. Collard. Upon an accounting, it was found that the amount of such incumbrances thus assumed, together with the amount owing on account to Anton Fried, aggregated the sum of $17,418.24, leaving a balance still due on such purchase price of $1,881.76, and that to this extent, with interest thereon at the rate of 7 per cent. per annum from the date of such sale, the defendant James M. Collard, at the time of the commencement of this action, had and ever since has retained an equity in such land, and the Frieds hold title to such land in fee subject only to such equity in James M. Collard.

(7) That by virtue of the execution and levy hereinbefore mentioned the plaintiff has a lien upon all such land for the sum of $80.09, being the balance of Collard's equity aforesaid after satisfying the prior lien held by the Royal Elevator Company, the plaintiff in the companion action, and that upon the payment of such sum, the defendants Anton and Susan Fried, respectively, shall be adjudged to be the fee owners of such lands free and clear of all claims asserted by the plaintiff bank.

From the foregoing findings of fact the trial court made conclusions of law, to the effect that the plaintiff bank is entitled to judgment against the defendants Anton and Susan Fried for the sum of $80.09, the balance thus due on the purchase price of such land, and that such sum be made a specific lien thereon, and, when paid, the same shall be applied upon the judgment against the Collards. Further, adjudging that Anton Fried and Susan Fried, respectively, are the owners in fee simple of the lands in controversy, subject only to the incumbrances of record and the balance thus found to be due on the purchase price, as against this plaintiff, and that when the provisions of this judgment are carried out by the defendants Anton and Susan Fried, the title to such lands shall be adjudged to be in said Frieds, respectively, in accordance with their deeds, free and clear of all claim made by the other parties to this action.

In the light of the facts thus found by the trial court and which, as before stated, we deem fully established by a preponderance of the testimony, we entertain no doubt as to the correctness of the...