Oklahoma Nat. Bank v. Cobb
| Decision Date | 16 November 1915 |
| Docket Number | 5781. [a1] |
| Citation | 153 P. 134,52 Okla. 654,1915 OK 931 |
| Parties | OKLAHOMA NAT. BANK ET AL. v. COBB ET AL. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
In an action to subject land to the payment of a judgment obtained by the plaintiff on the ground that the debtor had conveyed it without consideration and in fraud of creditors, evidence is admissible on the issue of fraud and want of consideration to show what the true consideration was.
The provisions of the statute of frauds, or of uses and trusts against allowing an express trust to establish by parol, do not apply where the trust has been executed, and the object of the evidence is to show the true consideration of the deed by which it was carried out.
In an action to set aside a deed charged to be fraudulent as to creditors, it must be both alleged and proved, before the deed will be set aside, that at the time the conveyance was made the debtor was insolvent, and the fact that the insolvency exists at the time suit is brought does not raise the presumption that the debtor was insolvent some months prior to that time.
In order to set aside a deed as fraudulent as to creditors which has been made to pay an honest debt, the grantee must know of and participate in the fraudulent intent.
Commissioners' Opinion, Division No. 2. Error from District Court, Muskogee County; R. P. De Graffenreid, Judge.
Action by the Oklahoma National Bank, a corporation, and another against H. C. Cobb and others. Judgment for defendants, and plaintiffs bring error. Affirmed.
Brainerd & Davis, B. E. Nussbaum, and Leopold & Cochran, all of Muskogee, for plaintiffs in error.
Thomas H. Owen, Joseph C. Stone, and Sumner J. Lipscomb, all of Muskogee, for defendants in error.
DEVEREUX C. (after stating the facts as above).
The plaintiff in error urges that the trial court committed error in admitting parol evidence that John O. Cobb had the patent to this land issued in the name of Henry C. Cobb to hold in trust for himself and the other children of John O. Cobb by a previous marriage, on the ground that parol evidence is not admissible to prove an express trust. But the trust in this case was fully executed when Henry C. Cobb, the trustee, executed and delivered the deed to his sisters (Logan v. Brown, 20 Okl. 334, 95 P. 441, 20 L. R. A. [ N. S.] 298), and the evidence was clearly competent to rebut the allegation of fraud. The cause of action set out in the plaintiff's petition, on which they sought to subject this land to the payment of their judgments, was that Henry C. Cobb conveyed it to Mrs. McCaffrey, without consideration, and with intent to hinder and delay the plaintiffs in the collection of their claims, and that the land was received by Mrs. McCaffrey with full knowledge of such intent and to assist Henry C. Cobb in his unlawful purpose. To meet this issue, it was competent for the defendants to show what the true consideration of the deed was. In 2 Moore on Fraudulent Conveyances, p. 904, it is said:
"The recitals in a deed are not evidence as to third parties, and when a fact put at issue by the pleadings is particularly within the knowledge of the defendant, such as the consideration of a conveyance or transfer made by him, the burden of proof is on him to show the fact."
And see Bump on Fraudulent Conveyances, § 66; Wait on Fraudulent Conveyances,§§ 219 and 221, where it is said that there is a manifest tendency in the courts to admit parol evidence of the true consideration of a deed in almost any case. In Runyon v. Lear, 20 N.C. 373, it is held that matters dehors the deed may be resorted to for repelling as well as founding a presumption of fraud. And see Powell v. Heptinstall, 79 N.C. 207.
In the case at bar the uncontradicted evidence shows that J. O. Cobb had the patent issued in the name of Henry C. Cobb to hold in trust for the other children of J. O. Cobb, and at least this imposed on him the moral duty of executing the trust. In 1 Moore on Fraudulent Conveyances, p. 295, it is said that a moral obligation to perform a duty to convey property is sufficient to sustain a conveyance of the property by a debtor as against the debtor's creditors. It is true that the author points out that there is a conflict in the authorities on this question, but in our opinion the weight of reason is with the doctrine as laid down in the text.
In the case at bar the petition does not allege that Henry C. Cobb was insolvent when he executed the deed to Mrs....
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