Moores v. Tomlinson
| Decision Date | 10 April 1916 |
| Court | North Dakota Supreme Court |
From a judgment of the District Court of Steele County, Pollock, J defendants appeal.
Affirmed.
W. J Courtney, for appellants.
Fraud is a question of fact in this jurisdiction, and must be pleaded. The bill of sale upon which appellants relied could only be impeached for fraud, and since this was not pleaded the court's ruling thereon was error. Harkins v Cooley, 5 S.D. 227, 58 N.W. 560; Cobb v. Cole, 55 Minn. 235, 56 N.W. 828, 51 Minn. 48, 52 N.W. 985; 8 Enc. Pl. & Pr. p. 945, notes 1 and 2; State ex rel. Dorgan v. Fiske, 15 N.D. 219, 107 N.W. 191; Dalrymple v. Security Land & T. Co. 9 N.D. 306, 83 N.W. 245; Paulson v. Ward, 4 N.D. 103, 58 N.W. 792; Rundle v. Delaware & R. Canal Co. 14 How. 100, 14 L.Ed. 343; Patton v. Taylor, 7 How. 132, 12 L.Ed. 637; Voorhees v. Bonesteel, 16 Wall. 16, 32, 21 L.Ed. 268, 271.
A bill of sale as security is good. McCormick Harvester Mach. Co. v. Caldwell, 15 N.D. 132, 106 N.W. 122.
A creditor cannot attack any transaction for fraud, unless the property transferred was such as he could seize to satisfy his claim. Cresswell v. McCaig, 11 Neb. 222, 9 N.W. 52; Simon v. Levy, 36 Fla. 438, 18 So. 777; Perisho v. Perisho, 71 Ill.App. 222; Pell v. Tredwell, 5 Wend. 661; McDonald v. O'Neil, 161 Pa. 245, 28 A. 1081; Zuver v. Clark, 104 Pa. 222; Oul Nat. Bank v. Heckman, 148 Ind. 490, 47 N.E. 953.
The plaintiff's mortgage was made and accepted by plaintiff subject to Tomlinson's $ 2,000 mortgage, and the plaintiff is not in any position now to question the validity of such mortgage. Perrine v. First Nat. Bank, 55 N.J.L. 402, 27 A. 640; Tuite v. Stevens, 98 Mass. 305; Howard v. Chase, 104 Mass. 249.
The presumption that the findings of the trial court are right does not prevail in a trial de novo in an equity case on appeal. Englert v. Dale, 25 N.D. 587, 142 N.W. 169.
A general objection to evidence of the same class is sufficient. American Mortg. Co. v. Mouse River Live Stock Co. 10 N.D. 291, 86 N.W. 965.
C. S. Shippy and H. R. Turner, for respondents.
No reply was here necessary to enable plaintiffs to prove fraud on the trial. No counterclaim is pleaded by answer, and no request for or order by the court for a reply was made. American Case & Register Co. v. Walton & D. Co. 22 N.D. 187, 133 N.W. 309.
The property mentioned in the bill of sale was at all times thereafter in the possession of the vendor, just the same as before the bill of sale. It was in fraud of the vendor's creditors, and void. Comp. Laws 1913, § 7221.
In this case there is much testimony in support of the findings of the trial court, and they will not therefore be disturbed on appeal. Dammann v. Schibsby Implement Co. 30 N.D. 15, 151 N.W. 985; Steidl v. Aitken, 30 N.D. 281, L.R.A.1915E, 192, 152 N.W. 276; Krause v. Krause, 30 N.D. 54, 151 N.W. 991.
The general rule is, in actions where the fact of fraudulent conveyances is an issue, that statements made by the grantor after the transaction, and not made in the presence of the grantee, are not binding on the grantee and therefore not admissible. But, the exception is that where a common purpose or design to hinder, delay, or defraud creditors is claimed, then such statements become admissible. Hartman v. Diller, 62 Pa. 37; Boyer v. Weimer, 204 Pa. 295, 54 A. 21; Souder v. Schechterly, 91 Pa. 83; 6 Enc. Ev. 156, P D. note, 33; Murch v. Swensen, 40 Minn. 421, 42 N.W. 290; Banks v. McCandless, 119 Ga. 793, 47 S.E. 332; Moore v. Tearney, 62 W.Va. 72, 57 S.E. 263.
This is an action for the foreclosure of a certain chattel mortgage executed and delivered by the defendant Glen E. Tomlinson to the plaintiffs on March 30, 1911. The execution of the notes and mortgages and the amount due thereon is admitted, but the defendant Charles Tomlinson in his answer claims to be the absolute owner of all of the property described in the mortgage which plaintiffs seek to foreclose by virtue of a bill of sale executed and delivered to him by the defendant Glen E. Tomlinson on January 26, 1911.
The action came on for trial upon the issues as framed by these pleadings, and resulted in a judgment in favor of the plaintiffs for the relief prayed for in the complaint. The defendants have appealed from this judgment, and demanded a trial anew in this court.
The defendants are father and son, and the evidence shows that Charles Tomlinson, the father, in 1905 became the owner of considerable land in Steele county in this state. Both defendants were at that time residents of Geneseo, Illinois. In 1906 the defendant Charles Tomlinson placed his son, Glen E. Tomlinson, upon the Steele county farm, and he continued to reside upon and farm this land from that time on, and was permitted to exercise apparent dominion over the farm and all personal property thereon. He sold the produce, and purchased the necessary supplies, horses, and machinery. The defendants testified that Charles Tomlinson in the first place owned a one-half interest in such personal property, but that he afterwards sold the same to Glen E. Tomlinson and retained a $ 2,000 interest. The defendant Charles Tomlinson did not reside on the farm, but continued to reside at Geneseo, Illinois, and later at Minneapolis, Minnesota. He came up to the farm at various times, however, and at times stayed for a considerable length of time. The testimony shows that at one of such times at least he made trips to town and purchased supplies from the various merchants and dealers, and had the same charged to his son. This condition continued from 1906 up to the fall of 1913. On January 26, 1911, the defendant Glen E. Tomlinson executed and delivered to his father, Charles Tomlinson, a bill of sale of all the personal property on the farm. The bill of sale was recorded in the office of the register of deeds of Steele county on January 30, 1911. The defendant Glen E. Tomlinson, however, continued to possess and use the personal property as before, and on March 30, 1911, he executed and delivered a chattel mortgage thereon to the plaintiffs. Glen E. Tomlinson continued to retain possession of and exercise full control over the personal property in question until the fall of 1913, when Charles Tomlinson claims that he took possession thereof, but the evidence shows that even after this time Glen E. Tomlinson continued to reside upon the farm and use the personal property much as before. The trial court found that the bill of sale to Charles Tomlinson was fraudulent and void as against plaintiffs' mortgage. And the principal, and practically the only, question on this appeal is whether this finding is justified under the pleadings and the evidence in the case.
(1) Defendants contend that the question of fraud was not pleaded, and that therefore it was error for the trial court to admit evidence tending to establish fraud and render judgment upon such evidence. Defendants' counsel says:
Defendants' counsel raised this question in the trial court by a motion for judgment on the pleadings, and by objections to the introduction of evidence offered by plaintiffs tending to prove that the bill of sale was fraudulent and void. In this court these rulings of the trial court are vigorously assailed, and defendants' counsel has cited numerous authorities in support of the contention that such rulings were erroneous. An examination of the authorities cited, however, shows that they were cases wherein the plaintiff sought to set aside instruments on the ground of fraud, and wherein the courts affirmed the well-known rule that a party asserting fraud must both plead and prove facts sufficient to establish it. The rule announced in these authorities is uniformly recognized by the courts of this country, but is not applicable to the pleadings in the case at bar. It is conceded that the answer of Charles Tomlinson did not contain a counterclaim, but set forth defensive matter only. The defense set forth in the answer was that Charles Tomlinson was the absolute owner of the property, and that consequently Glen E. Tomlinson had no mortgagable interest therein. It was not necessary for plaintiffs to reply to the new matter in the answer, because, under the express provisions of our Code of Civil Procedure, such new matter was "deemed controverted by the adverse party as upon a direct denial or avoidance, as the case may be." Comp. Laws 1913, §§ 7467-7477. See also Comp. Laws 1913, § 7452. By virtue of these statutory provisions the allegations of the answer were controverted "as upon a direct denial or avoidance" by operation of law, "and the plaintiff might prove in response thereto any fact by way of denial or of confession and avoidance." Pom. Code Rem. § 588; American Case & Register Co. v. Walton & D. Co. 22 N.D. 187, 133 N.W. 309; Erickson v. Elliott, 17 N.D. 389, 117 N.W. 361; Scott v. Northwestern Port Huron Co. 17 N.D. 91, 115 N.W. 192; Koester v. Northwestern Port Huron Co. 24 S.D. 546, 124 N.W. 740; McCarthy Bros. Co. v. Hanskutt, 29 S.D. 535, 137 N.W. 286, Ann. Cas. 1914D, 889.
(2) Defendants' counsel next contends that plaintiffs have failed to establish the fraudulent character of the bill of sale by sufficient competent proof. Under the laws of this state: "Every sale made by a vendor of personal property in his possession or under his control and every assignment of personal property,...
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