Morris v. Blossom
| Decision Date | 27 June 1930 |
| Docket Number | 27,927 |
| Citation | 231 N.W. 397,181 Minn. 71 |
| Parties | R. E. MORRIS AND OTHERS v. DONALD N. BLOSSOM AND OTHERS |
| Court | Minnesota Supreme Court |
Plaintiffs appealed from an order of the district court for Hennepin county, Waite, J. denying their motion for a new trial. Affirmed.
Reopening case for more evidence within court's discretion.
1. Vacating original findings and opening the case for further evidence was within the discretion of the court.
Father's conveyance to daughter not in fraud of creditors.
2. The finding that a conveyance from father to daughter of his interest in a parcel of real estate was not in fraud of creditors is sustained by the evidence.
Daughter subrogated to rights of bank as accommodation surety for father's indebtedness.
3. The finding that the father caused certain other real estate to be conveyed to a bank as security for a loan, and that the daughter was an accommodation surety for the indebtedness and had paid it and thereby became subrogated to the rights of the bank in the security, is also sustained by the evidence.
Daughter not chargeable with inequitable conduct.
4. Having paid the indebtedness, the daughter was entitled to a transfer of the security and is not chargeable with inequitable conduct because she procured a conveyance thereof from the bank.
Order for sale and application of proceeds proper.
5. The court correctly directed the sale of the property and the application of the proceeds thereof.
R. E Plankerton, for appellant R. E. Morris.
J. J. Truax and J. B. Barker, pro se as appealing administrators of the estate of Edward M. Foster.
H. W. Volk, for respondent Dorothy Blossom.
D. F. Nordstrom, for respondent A. J. Veigel.
Appeal by plaintiffs from an order denying their motion for a new trial.
The action is in the nature of a creditor's bill to reach property formerly belonging to Edward M. Foster, deceased. It was originally brought by a simple contract creditor, but the administrators of Foster's estate were subsequently joined as plaintiffs. The right to maintain the action is not questioned. The evidence is voluminous and gives the details of numerous transactions. The findings cover 17 printed pages and are full and definite. An examination of the record satisfies us that they are all sustained by the evidence. We shall merely refer to a few of the salient facts without giving the details of particular transactions and with little or no discussion of the evidence relating to particular findings. The controversy is between the plaintiffs and the defendant Dorothy Blossom. She is the daughter of Edward M. Foster, deceased, and was married to the defendant Donald Blossom after her father's death. She will be referred to as Dorothy hereafter.
On April 21, 1929, the court made findings and an order for judgment which were filed on April 22, 1929. On May 16, 1929, on motion of defendant Dorothy, the court made an order vacating the findings and order of April 21, 1929, and opening the case for the presentation of further evidence. Thereafter both parties presented further evidence, and on July 1, 1929, the court made and filed new findings and an order for judgment in place of those previously set aside. Thereafter both parties made motions to amend these findings, which motions were denied except in certain minor particulars. Plaintiffs insist that the court erred in setting aside the original findings and order and opening the case for further evidence. To do so was within the discretion of the trial court. Smith v. Kurtzenacker, 147 Minn. 398, 180 N.W. 243.
Four parcels of real estate are involved, which for convenience will be designated as the Lyndale avenue property, the Hennepin avenue property, the Glen Lake property, and the Minnetonka property. The court made findings to the effect that defendant Dorothy was the owner in fee of the Lyndale avenue property; that the other three parcels had been conveyed to the Continental State Bank as security for an indebtedness owed by Foster to the bank for which indebtedness defendant Dorothy was an accommodation surety; and that she had paid in full the balance due on this indebtedness and was entitled to be subrogated to the rights of the bank in the security to the extent of the amount so paid.
We will take up first the matter of the Lyndale avenue property. Orel Foster, Dorothy's mother, was the owner of this property and also of certain personal property. She died intestate in 1914 leaving her husband and Dorothy as her sole heirs. Under the statute an undivided two-thirds of this property passed to Dorothy and an undivided one-third to her father. She was then 11 years old and continued to reside with her father. He was appointed administrator of the mother's estate. He proceeded to handle it as if it were his own property and appropriated the personal property and the rentals from the real estate to his own use. In July, 1920, he conveyed his one-third interest in the Lyndale avenue property to Dorothy, then 17 years of age, by a deed which was duly recorded. He was responsible to Dorothy for her share of the personal property and rentals which he had appropriated. Whether this conveyance was made for the purpose of satisfying that obligation does not directly appear, but he never made any other payment or settlement therefor. In its final decree the probate court assigned an undivided two-thirds of both the real estate and the personal property to Dorothy and an undivided one-third thereof to her father, and fixed the value of the personal property so assigned at the sum of $11,805. The plaintiffs claim that Foster made the conveyance to Dorothy for the purpose of concealing his interest in the property from creditors.
He had operated on an extensive scale in oil lands in Texas and other states, and a few months before making this conveyance a judgment for a large amount had been recovered against him in Texas. But this judgment had been immediately satisfied and did not render him insolvent although it swept away nearly all of his property. The evidence fails to show that he owed any debts at the time of the conveyance. He became ill in September, 1927, and died June 5, 1928. Claims aggregating about $10,000 were filed against his estate, but the earliest of them did not arise until a year after the conveyance in question. The finding to the effect that the conveyance was not made or received for the purpose of defrauding creditors and that Dorothy became the absolute owner of the property is amply sustained by the evidence.
At the same time that Foster conveyed the Lyndale avenue property to Dorothy he conveyed the other three parcels to Nellie McNeill, with the understanding that if he repaid the money and notes received for them she would reconvey them to him or as he directed. In May, 1922, having been repaid, she executed and delivered to Foster a quitclaim deed of the property with the name of the grantee left blank. In July 1922, Foster inserted the name of the Continental State Bank as grantee in this deed and delivered it to the bank as collateral security for a loan of $14,000 which he obtained from the bank. The promissory note which he gave for the loan refers to this deed and provides that it shall be security for any and all liabilities to the bank or the holder of the note then existing or thereafter arising. Dorothy signed this note, and the court finds on sufficient evidence that she signed it solely for the accommodation of her father. For present purposes it is not necessary to follow the indebtedness for which the deed was held as collateral security through the various changes which subsequently took place therein. It is sufficient to say that Dorothy signed the subsequent notes representing such indebtedness and was liable therefor; and that the court found on sufficient evidence that her liability therefor was incurred solely as accommodation surety for her father. On January 15, 1924, she paid...
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