Peacock v. Bradshaw

• Decision Date: 08 December 1930
• Docket Number: 5508
• Citation: 293 P. 982,50 Idaho 117
• Parties: CHARLES F. PEACOCK, Trustee in Bankruptcy of R. U. BRADSHAW, Bankrupt, Respondent, v. R. U. BRADSHAW, Appellant
• Court: Idaho Supreme Court

293 P. 982

50 Idaho 117

CHARLES F. PEACOCK, Trustee in Bankruptcy of R. U. BRADSHAW, Bankrupt, Respondent, v. R. U. BRADSHAW, Appellant

No. 5508

Supreme Court of Idaho

December 8, 1930

CLAIM AND DELIVERY-OWNERSHIP OF LAND-POSSESSION BY ANOTHER-RECOVERY OF CROPS - BANKRUPTCY-TRANSFER BY BANKRUPT-RIGHTS OF TRUSTEE.

1. Trustee in bankruptcy of fraudulent grantor has cause of action for cancelation of deed given in fraud of creditors with right to recover for rents and profits.

2. Between one out of possession, though owner and entitled to possession, and one adversely in possession while crops are grown and severed, title to entire crop is in latter.

3. Owner's remedy against one wrongfully withholding possession is for such wrongful withholding, not for crop, or wrongful conversion thereof, in which land owner had no title.

4. Crops grown and severed while grantee in deed in fraud of creditors and tenant were in possession, pending appeal upon supersedeas bond from decree canceling deed were property of grantee and tenant, and bankruptcy trustee could not maintain action for conversion.

APPEAL from the District Court of the Seventh Judicial District, for Washington County. Hon. A. O. Sutton, Judge.

Action in assumpsit to recover rents alleged to have been fraudulently appropriated by defendant. Judgment for plaintiff. Reversed.

Judgment reversed, with costs to appellant.

George Donart and Wm. M. Morgan, for Appellant.

Crops grown and severed by one while in possession of land belonging to him, although his possession was without right as against the true owner. (Fritcher v. Kelley, 34 Idaho 468, 201 P. 1037; Albrethsen v. Clements, 48 Idaho 80, 279 P. 1097; Gross v. Robinson, 36 Wyo 392, 57 A. L. R. 578, 256 P. 80; Kester v. Amon, 81 Mont. 1, 261 P. 288; Fuglede v. Wenatchee District Co-operative Assn., 134 Wash. 350, 39 A. L. R. 953, and note, 235 P. 790, 792; 8 R. C. L., sec. 11, p. 366; 17 C. J. 381.)

Where the right to rents and profits could have been claimed as incidental relief in an action to set aside a conveyance, and was not, either before judgment, or thereafter in supplementary proceedings, a separate action therefor cannot be maintained after the adjudication of the first action under the rule that a party cannot split his cause of action and such subsequent claim for rents and profits is subject to the defense of res adjudicata. (Hogle v. Smith, 136 Iowa 32, 113 N.W. 556; Garbutt v. Smith, 40 Barb. (N. Y.) 22; Maasch v. Grauer, 123 A.D. 669, 108 N.Y.S. 54; see, also, C. S., sec. 6817, for relief after judgment; 1 C. J. 1106, sec. 276; 27 C. J. 671, sec. 460; 12 R. C. L. 642, 643, sec. 149.)

Ed R. Coulter and Rice & Bicknell, for Respondent.

Appellant Bradshaw collected these rents knowing that he had with the intent to defraud his creditors, fraudulently conveyed these lands, without any consideration, to his daughters; and that plaintiff and respondent was entitled to these rentals. Under these circumstances Bradshaw is liable in assumpsit for these rental moneys, regardless of whether he used same himself or paid same over to his daughters. (McDonald v. Napier, 14 Ga. 89; Perminter v. Kelly, 18 Ala. 716, 54 Am. Dec. 177; Kimball v. Billings, 55 Me. 147, 92 Am. Dec. 581; Thompson v. McLean, 57 Hun, 586, 589, 10 N.Y.S. 411; Bennett v. Ives, 30 Conn. 329; Johnson v. Barber, 10 Ill. 425, 50 Am. Dec. 416; Miller v. Wilson, 98 Ga. 567, 58 Am. St. 319, 25 S.E. 578; McNaughton v. City of Elkhart, 85 Ind. 384; Wing v. Milliken, 91 Me. 387, 64 Am. St. 238, 40 A. 138; Buis v. Cook, 60 Mo. 391; Sheffler v. Mudd, 71 Mo.App. 78; Laughlin v. Barnes, 76 Mo.App. 258.)

MCNAUGHTON, J. Givens, C. J., Budge and Lee, JJ., and Koelsch, D. J., concur. Varian, J., did not sit in this case.

OPINION

MCNAUGHTON, J.

In 1923 defendant, appellant here, was the owner in possession of three tracts of land in Washington county. He was financially embarrassed, really insolvent. In August, 1923, he executed deeds to this property, deeding part to his daughter, Mrs. Mae Shirley, and the balance to another daughter, Mrs. Della Fairbairn. After the Weiser National Bank failure, and in June, 1924, these deeds were filed for record.

In November, 1924, the defendant was adjudged an involuntary bankrupt, and Charles F. Peacock, the plaintiff and respondent, was appointed trustee in bankruptcy. Plaintiff trustee instituted independent and separate actions in the state court against the daughters to set aside said deeds as given in fraud of creditors. Upon the trial of these actions decrees were entered on the thirteenth day of September, 1926, adjudging said deeds to be without consideration and in fraud of creditors and canceling them and finding and decreeing title to said lands to be in the plaintiff as trustee. The defendant in each action gave statutory appeal bond and appealed the cases to the supreme court. In April, 1928, the supreme court affirmed the district court decrees. (45 Idaho 628, 264 P. 231.)

On the first day of September, 1928, this action was instituted by the trustee against R. U. Bradshaw to recover as for conversion, what was designated as the landlord's portion of crops grown upon the land and severed between the date of the district court's decree and the date of its affirmance in the supreme court. The action is in two counts which are the same except the first has reference to the crop grown upon the lands fraudulently transferred to Mae B. Shirley, and the other to the crops grown upon the land so transferred to Della Fairbairn.

The complaint sets forth the adjudications in the state courts, charges the defendant with full knowledge thereof, which is admitted in the answer, and states the action is in assumpsit. Attachment issued. The theory, form and gist of the causes of action are disclosed by the first paragraph of paragraph four of each cause of action, which are the same except as to descriptions and names, and in the first cause of action it is as follows:

"That during the course of said litigation and in the trial thereof, and in the appeal to the Supreme Court of the State of Idaho, R. U. Bradshaw had full knowledge of all of the matters and things in connection with said lawsuit, trial thereof, rendition of judgment of the lower court, appeal to the Supreme Court and affirmation of the lower court by the Supreme Court as hereinbefore set forth; and that during all of said times and, especially during the years of 1927 and 1928, said Bradshaw was in possession of said land either in his own behalf or as ostensible agent of his daughter, Mae B. Shirley, to whom the court had found that R. U. Bradshaw had conveyed said lands by said deed, aforesaid, with the fraudulent intent, design and purpose to hinder, delay and defraud his creditors; and during the year of 1927 said defendant did unlawfully, fraudulently and wrongfully and with the knowledge that they belonged to the plaintiff appropriated same to the use and benefit of his said daughter, Mae B. Shirley, as aforesaid; and that said conversion of said rentals of said property by the defendant was made with the knowledge on the part of the defendant that all of same were the property of and belonged to this plaintiff."

Upon trial of the cause the court found for the plaintiff upon each count. The defendant appealed to this court upon the assignments which challenge mainly the right to a cause of action such as that set forth under the facts of this case.

It appears from the authorities, and is not seriously disputed by appellant, that when a deed is given in fraud of creditors, a trustee in bankruptcy of the estate of the fraudulent grantor, as a result of such deed, has a good cause of action for the cancelation of it, with right to recover from the grantee for rents and profits. (In re Zerbersky, 287 F. 600; Salt Springs Nat. Bank v. Fancher, 92 Hun 327, 36 N.Y.S. 742.) And this relief may be had in the main action. (Furlong v. Cooney, 72 Cal. 322, 14 P. 12; Sullivan v. Davis, 4 Cal. 291.)

Appellant contends, however, that respondent has misconceived his remedy; further, that the proper remedy, which is for mesne profits, could and should be had in the main action, and that a separate and independent action may not be brought for such relief. This issue of res judicata is not raised by answer, and the point of splitting demands is mainly stressed by appellant in his reply brief on the claim that the pleadings by plaintiff, and his position in his brief, raise the question. We deem it unnecessary to examine the law on this point because we do not think the question is here. This is not an action against a fraudulent grantee for mesne profits. This is an action in assumpsit as for a conversion of personal property claimed to have been the property of plaintiff. The action is based upon the theory that the trustee had a property right in the personal property sold by the defendant.

If this crop was the property of the trustee, and the defendant wrongfully converted it by sale for his own benefit, or as agent with full knowledge, for the benefit of his principal, then he is liable, otherwise not.

It will be noticed that plaintiff is not claiming he was the owner of the whole crop grown upon these lands. But he claims he was the owner of the landlord's share. On this account it is claimed the general doctrine of fructus industriales does not apply.

The serious, and we think the decisive, question in this case is whether or not the trustee in a case of this kind has a property interest in any part of a crop grown and severed while a grantee and his tenant are in possession, that is crops grown and severed between the dates of a decree in the district court adjudging the grantee's deed void and the affirmance of that...