Rice v. Allen

• Citation: 95 N.W. 704,69 Neb. 349
• Decision Date: 03 June 1903
• Docket Number: 12,725
• Parties: BURTON RICE, APPELLANT, v. HUGH A. ALLEN ET AL., APPELLEES
• Court: Supreme Court of Nebraska

95 N.W. 704

69 Neb. 349

BURTON RICE, APPELLANT, v. HUGH A. ALLEN ET AL., APPELLEES

No. 12,725

Supreme Court of Nebraska

June 3, 1903

APPEAL from the district court for Holt county: WILLIAM H. WESTOVER DISTRICT JUDGE. Affirmed.

AFFIRMED.

E. H Benedict, for appellant.

Michael F. Harrington and R. R. Dickson, contra.

KIRKPATRICK C. HASTINGS and LOBINGIER, CC., concur.

OPINION

KIRKPATRICK, C.

This suit grows out of the following matters: In 1887, appellant, Burton Rice, resided in Holt county, and gave a mortgage on a one-half section of land owned by him for $ 1,400. The loan was negotiated by Hugh A. Allen, appellee, who was acting as the agent of some investment company. Some months after the loan was negotiated, appellee, Allen, examined the land and found it to be of very little value. About this time appellant removed from the land and located in South Omaha, and about the same time, and on September 20, 1887, he and his wife executed a quitclaim deed in blank for the premises, with an expressed consideration of $ 3,000. This deed was delivered to appellee, Hugh A. Allen, with the understanding that he was to sell or trade the premises for whatever he could get above the amount of the mortgage, and whatever he obtained was to be divided with appellant, Rice. Some time after appellee, being unable to dispose of the land, sent the quitclaim deed to one Lusk, in Omaha, for Lusk to attempt to dispose of the land. Lusk, it appears, traded the quitclaim deed for an equity in some lots in the outskirts of Omaha which were incumbered for much more than they were worth. Subsequently, appellant agreed to make a trade of the land to Herman E. Cochran and Elbert H. Cochran, who were real estate dealers in Omaha, and doing business under the firm name of Cochran Brothers. On writing to Holt county to get an abstract, appellant ascertained that the land had been disposed of, and in the fall of 1888 he commenced a suit in the district court for Douglas county, making the Cochrans and Hugh A. Allen, appellee, defendants. The record discloses that a summons for appellee, Allen, was sent to the sheriff of Holt county for service, and was duly returned showing personal service upon Allen. It is further disclosed that an attorney, by the name of Williams, appeared in the action claiming to represent Allen. Such proceedings were afterwards had that on the 13th of March, 1890, a judgment was rendered against Allen, for $ 3,400 and costs, and shortly afterwards the action was dismissed as to the Cochrans. Subsequently, and in September of the same year, a transcript of this judgment was filed in the district court for Holt county. No execution having been issued, the judgment became dormant, and in the fall of 1900 application was made in the district court for Douglas county, to revive it. Upon this application a conditional order of revivor was made, and personal service upon Allen had, who, however, made no appearance, and on December 10, 1900, an order of revivor was duly entered.

In January, 1901, this suit, in the nature of a creditor's bill, was instituted in the district court for Holt county against Hugh A. Allen, his wife and other persons, appellees, to set aside, as fraudulent, deeds made by third parties to Mrs. Allen for a large amount of land in Holt county, upon the ground that the land was in reality the land of Hugh A. Allen and that title had been taken in the name of Mrs. Allen to prevent the collection of the judgment of appellant. The petition is in the usual form, and in additional allegations the revivor of the judgment is set out. Separate answers were filed by Hugh A. Allen and Mary E. Allen, his wife, each denying all allegations in the petition not expressly admitted. The answer set out the proceedings in the district court for Douglas county, alleging that the same were a fraudulent conspiracy between appellant, Rice, and the Cochrans; alleged that no service or summons was ever made on appellant Allen; that the proceedings were void; and that the appearance made in the case by Williams was a part of the conspiracy; that he was unknown to appellee, Hugh A. Allen, and had never been employed or authorized to appear in any way by him. The answers also alleged, that the judgment and lis pendens notices that had been filed in Holt and some other counties were a cloud upon the title to the land owned by Mrs. Allen; that Rice intended and was about to institute other suits to collect the judgment. The answers closed with a prayer for an injunction, and a decree removing the cloud and quieting the title.

To the answers of Hugh A. Allen and his wife, there was filed a reply, which among other things pleaded that Hugh A. Allen should have appeared in the revivor proceedings and set up the invalidity of the judgment, and having failed to do this, he was concluded by the judgment of revivor; that it was res adjudicata as to these proceedings, and that any relief he might otherwise have been entitled to, was barred by the statute of limitations. Trial was had resulting in a finding and judgment for appellee, perpetually enjoining any attempt to collect the judgment, removing the cloud cast by the judgment from the title of appellee, and that appellant pay the costs. From this judgment an appeal is prosecuted to this court. It is disclosed by the record that the conveyances which are alleged to be fraudulent, were conveyances made by third parties to Mary E. Allen, the title to such land never having been in the husband, Hugh A. Allen. Under this state of the record, appellant contends that the burden of proof is upon the wife to show the good faith of such conveyances. The trial court held otherwise, and placed the burden of proof upon appellant to show that the conveyances were in fraud of creditors. This is the first error assigned. The rule is well settled in this state, that:

"Transactions between husband and wife in regard to the transfer of property from him to her, by reason of which creditors are prevented from collecting their just dues, will be scrutinized very closely, and it must clearly appear that such transfers were made in good faith...