Platte County State Bank v. Frantz

• Decision Date: 22 September 1925
• Docket Number: 1190
• Citation: 239 P. 531,33 Wyo. 326
• Parties: PLATTE COUNTY STATE BANK v. FRANTZ ET AL [*]
• Court: Wyoming Supreme Court

239 P. 531

33 Wyo. 326

PLATTE COUNTY STATE BANK v. FRANTZ ET AL ^[*]

No. 1190

Supreme Court of Wyoming

September 22, 1925

APPEAL from District Court, Platte County; VOLNEY J. TIDBALL, Judge.

Action by the Platte County State Bank against Thomas U. Frantz and others, in the nature of a creditor's bill. Decree was rendered in favor of plaintiff from which defendants appeal.

Affirmed.

M. A Kline, O. O. Natwick and H. J. Ferguson for appellants.

The petition did not state a cause of action; Ackerman v Middleby (N. H.) 78 A. 615; Stonebreaker v Littleton (Me.) 86 A. 150; Bank v. School Dist. (Okla.) 162 P. 809; Phelps v. Palmer, 81 Mass. 499; Mariana R. R. Co. v. Maurel (Fla.) 56 So. 670; Wadley, Jones & Co. v. Jones, 55 Ga. 176; a party must reduce his claim to a judgment before he can maintain a creditor's bill; Jenks v. Horton (Mich.) 72 N.W. 20; Baxter v. Moses (Me.) 1 A. 350; Gilbert v. Stockman (Wis.) 51 N.W. 1076; Ladd v. Judson (Ill.) 51 N.E. 838; Trotter v. Lisman (N. Y.) 92 N.E. 1052; Jones v. Green, 17 L. ed. 553; Moyer v. Riggs, (Kans.) 55 P. 495; Fein v. Fein, 3 Wyo. 163; plaintiff must first exhaust his legal remedies; a mere attachment lien is insufficient to support the creditor's bill; Tennant v. Beatty, 18 Kans. 324; Clark v. Raymond (Ia.) 50 N.W. 1068; Whitney v. Davis (N. Y.) 42 N.E. 661; Artman-Co. v. Giles, (Pa.) 26 A. 668; Lyden v. Co. (Cal.) 100 P. 236; Talbott v. Randall (N. Mex.) 5 P. 533; Mills v. Ledwidge (Ill.) 44 N.E. 751; McMinn v. Whelan, 27 Cal. 300; Dodge v. Co., 69 Ga. 665; Weil v. Lankins, 3 Nebr. 384; Martin v. Michael, 23 Mo. 50; Melville v. Brown (N. J.) 1 Harris 367; Bigelow v. Andress, 31 Ill. 322; Morton v. Grafflin (Md.) 13 A. 341; Weinland v. Cochran (Nebr.) 4 N.W. 67; Hart v. Clarke (N. Y.) 87 N.E. 808; a judgment must be obtained; 6056 C. S.; Moyer v. Riggs, 55 P. 495; plaintiff's claim was an excess loan and unlawful 5146 C. S.; 21 C. J. 191; Kahn v. Walton (O) 20 N.E. 203; Unckles v. Colgate (N. Y.) 43 N.E. 61; Teoli v. Nardolillo (R. I.) 49 A. 489; Downey v. Co. (Mass.) 87 N.E. 597; Greer v. Payne (Kan.) 46 P. 193; Nester v. Co. (Pa.) 29 A. 102; plaintiff's acts being illegal a Court of Equity will not grant relief; Miller v. Ammon, 145 U.S. 421; McMullen v. Hoffman, 174 U.S. 639; Connolly v. Co., 184 U.S. 548; Gunter v. Lecky, 30 Ala. 591; Wald v. Wheelon (N. Dak.) 147 N.W. 402; Roby v. West, 4 N.H. 285; Pike v. King, 16 Ia. 49; West. Un. Co. v. Yopst (Ind.) 20 N.E. 222; Jemison v. R. Co., 125 Ala. 378; Martin v. Hodge, 47 Ark. 378; Howell v. Fountain, 3 Ga. 176; Phalen v. Clark, 19 Conn. 421; Gregg v. Wyman, 4 Cush. 322; Fowler v. Scully, 72 Pa. 456; Fitzgerald v. R. R. Co., 63 Vt. 169; DeWitt, v. Lander, 72 Wis. 120; Buck v. Albee, 26 Vt. 184; Keith v. Fountain (Tex.) 22 S.W. 191; nor could plaintiff recover at law; Beecher v. Co. (Ind.) 97 N.E. 23; Van Meter v. Spurrier, 94 Ky. 22; Allen v. Pearce, 84 Ga. 606; Hill v. Ward (Ind.) 91 N.E. 38; Williams v. Turnbull (Okla.) 162 P. 770; Ewert v. Bluejacket (U. S.) 66 L. ed. 489; Waskey v. Hammer, 223 U.S. 85; Harris v. Runnels, 12 How. 79; Pullman Car Co. v. Co., 171 U.S. 151; the burden of proving fraud was upon plaintiff; Am. Co. v. Hall (Ill.) 70 N.E. 581; Johnson v. Abbott, 25 Wyo. 133; Ball v. Danton (Ore.) 129 P. 1032; Kerns v. Co. (Idaho) 135 P. 70; Parkinson Bros. Co. v. Figel (Cal.) 142 P. 135; Grisier v. Farmers Bank (Kan.) 169 P. 215; Vogt. v. Co. (Ore.) 172 P. 123; Rohrer v. Snyder (Wash.) 69 P. 748; Larch v. Holz (Ind.) 101 N.E. 127; Bank v. Barber (Ill.) 122 N.E. 533; a debtor may prefer one creditor to another; Johnson v. Abbott, supra; the evidence of fraud must be clear; Power Co. v. Pederson, 184 P. 317; the court erred in admitting the record of another suit.

J. E. Jacobson and Kinkead, Ellery & Henderson for respondent.

The conveyances were a fraud upon the bank; 12 R. C. L. 475; an attachment lien will support a creditors bill; 12 R. C. L. 629; Quarl v. Abbott, (Ind.) 1 N.E. 476; Tappan v. Evans, 11 N.H. 327; Robert v. Hodges, 16 N. J. E. 304; Henham v. Hamm (Wash.) 31 P. 459; Simonton v. Simonton, (Ida.) 193 P. 387; Koopman v. Mansolf (Mont.) 149 P. 494; Grunsfield Bros. v. Brownell, (N.M.) 76 P. 310; Bank v. France (N.D.) 177 N.W. 375; Hahn v. Salmon (Ore.) 20 F. 801; Dawson v. Sims (Ore.) 13 P. 506; recovery of judgment is no longer indispensable; 2 Pom. Eq. Rem. 1430; it is true that the authorities are not unanimous in supporting bills resting upon attachments; Iron Co. v. Goodale, 39 N.H. 223; Bank v. Ankum, (Mo.) 177 S.W. 778; Kantz v. Sheridan (Me.) 105 A. 401; F. S. Ass'n. v. Rees (S. D.) 171 N.W. 812; Vail v. Hammond (Conn.) 22 A. 954; Bank v. Harris, 84 N.C. 206; Miller v. Hughes (S. C.) 12 S.E. 419; Shirley v. Waco (Texas) 10 S.W. 543; Co. v. Auto (N. J.) 54 A. 425; Abramson v. Horner (Md.) 80 A. 907; Cogburn v. Pollack, 54 Miss. 639; Bennett v. Minott, (Ore.) 39 P. 997; plaintiff's action is for the purpose of impressing certain real estate with a trust and is not governed solely by the rule applicable to a creditor's bill; 223 L. R. A. (N. S.) 104; and note; Chautauque v. White, 57 Am. Dec. 442; Case v. Co., 101 U.S. 688; 15 C. J. 1388; Williams v. Co., 227 F. 372; the old rule requiring a judgment as a prerequisite to an action for the vacation of a fraudulent conveyance, was procedural and has been abolished by the code; Bank v. McDonough (Ariz.) 168 P. 635; 6056 C. S. is not applicable; 6 C. J. 205; Westevelt v. Hagge (Nebr.) 85 N.W. 853; that the claim represents an excess loan is not available as a defense; Minn Threshing Co. v. Jones (Minn.) 103 N.W. 1017; Ia. Bank v. Bank (Nebr.) 183 N.W. 982; Thompson v. Bank, 164 U.S. 240; Bank v. Pierce (Mich.) 75 N.W. 1054; Morse on Banks & Banking Secs. 750-54; Benton Co. Bank v. Boddicker (Iowa) 75 N.W. 632; in this case the burden of showing bona fide consideration was on defendants; 12 R. C. L. 174; Carson v. Stevens (Nebr.) 112 N.W. 58; Martin v. Remington (Wis.) 76 N.W. 615; Seitz v. Mitchell, 94 U.S. 580; Russell v. Davis (Ala.) 91 A. S. R. 56; Culver v. Graham, 3 Wyo. 211; Puple v. Toughenbaugh (Colo.) 210 P. 72; Goldberg v. Parker (Conn.) 87 A. 555; Gaar v. Hart (Ia.) 42 N.W. 452; Bank v. Hollowell (Nebr.) 88 N.W. 558; a judgment based upon conflicting evidence will not be disturbed; Stahley Co. v. Beckstead, 27 Wyo. 177.

BLUME, Justice. POTTER, C. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action in the nature of a creditor's bill. A summary of the facts is as follows: In October, 1920, Thomas U. Frantz borrowed of the Platte County State Bank, hereinafter referred to as the bank, the sum of $ 19,000, at interest. The notes given therefor became due early in January, 1921, and the officers of the bank held a meeting with Frantz on January 12, 1921, at which, as the testimony shows, Frantz agreed to make to the bank a mortgage on the equity in his real property, in order to secure his said indebtedness. This promise was not carried out. Frantz went to Iowa and Illinois immediately after the last mentioned dates, and soon after his return and on January 24, 1921, he conveyed certain land in Platte county, Wyoming, to his sister, Dora E. Wonsor of Wheatland, Wyoming, and certain other land to F. J. Elliott, his brother-in-law, and made a mortgage to one H. J. Ferguson, his attorney, on still other lands owned by said Frantz. These conveyances disposed of all of the real estate owned by Frantz, except some South Dakota property, which was also subsequently transferred to said Ferguson. About the same time or immediately thereafter, he also gave certain chattel mortgages to secure other creditors, not including said bank, however. And by these transfers and mortgages Frantz disposed of all or substantially all of his real and personal property. On January 29, 1921 said bank commenced an action in the District Court of Platte county, Wyoming, to recover judgment on the notes hereinbefore mentioned. An affidavit for attachment was filed on the ground that Frantz had assigned, removed and disposed of his property with intent to defraud his creditors. A bond was given, a writ of attachment was issued and the real estate in Platte county transferred, as aforesaid, was levied upon by the sheriff of Platte county, Wyoming. Judgment in said action was rendered on December 14, 1921, in favor of said bank for the sum of $ 22,258.65--the amount then due upon said notes. The present action, in the nature of a creditor's bill, was commenced on January 31, 1921, soon after the levy of the writ of attachment aforesaid, and was brought against Thomas U. Frantz, Dora E. Wonsor, F. J. Elliott and H. J. Ferguson, as defendants. A decree was entered on February 28, 1923, setting aside the transfers of real property in Platte county, made as aforesaid to said defendants by said Frantz, declaring said attachment levy and said judgment to be a lien upon said lands superior to any right of defendants, and ordering so much of said lands to be sold as would be necessary to satisfy said judgment against Thomas U. Frantz, under an execution to be issued on said judgment. From this decree said defendants have appealed. It appears, however, that the lands transferred to Elliott and Ferguson have been sold under prior mortgages and that neither of them have now any further interest in this appeal, which is accordingly prosecuted only on behalf of said Dora E. Wonsor, who will hereafter, at times, be referred to as the appellant.

1. Counsel for appellant cite us to section 5146 of the Wyo. C. S. 1920, which provides in substance that no loan may be made by a bank to any person, firm or corporation in excess of one-fifth of the unimpaired capital stock of the bank. The capital stock of the bank in question was $ 20,000, and hence by loaning $ 19,000 to Frantz the...