Shoemaker v. Chapman Drug Co

• Decision Date: 14 September 1911
• Citation: 72 S.E. 121,112 Va. 612
• Court: Virginia Supreme Court
• Parties: SHOEMAKER v. CHAPMAN DRUG CO. et al.

72 S.E. 121

112 Va. 612

SHOEMAKER

v.CHAPMAN DRUG CO. et al.

Supreme Court of Appeals of Virginia.

Sept. 14, 1911.

1. Fraudulent Conveyances (§ 107^*)—Confidential Relations—Family Relations.

A sale of land by a father to his son will not be set aside as a fraud upon his creditors merely because of the family relation.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. §§ 347-350; Dec. Dig. § 107.*]

2. Fraudulent Conveyances (§ 61*)—Insolvency.

A grantor's insolvency will not render a sale invalid, unless it was made to hinder, delay, and defraud his creditors.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. §§ 138-158; Dec. Dig. § 61.*]

3. Fraudulent Conveyances (§ 271*)—Evidence—Sufficiency.

Fraud is never presumed, and fraud in a conveyance should not be assumed on doubtful evidence or circumstances of mere suspicion.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. §§ 796-798; Dec. Dig. § 271.*]

4. Fraudulent Conveyances (§ 271*)—Evidence—Burden of Proof.

Where a conveyance is attacked as fraudulent, the burden is upon the plaintiff, but, having established a prima facie case of fraud, the burden shifts, and the defendant must establish the bona fides of the transaction.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. §§ 796-798; Dec. Dig. § 271.*]

5. Fraudulent Conveyances (§ 300*)—Consideration— Recitals in Deed.

In a suit by creditors to set aside a conveyance as voluntary and fraudulent, recitals in the deed that the consideration has been paid are not sufficient to establish that fact.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. § 897; Dec. Dig. § 300.*]

6. Fraudulent Conveyances (§ 301*)—Evidence—Sufficiency—Knowledge of Grantee.

In a suit by creditors to set aside a deed as fraudulent, evidence held insufficient to show that the grantee was party to the fraudulent intent of the grantor.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. §§ 904-907; Dec. Dig. § 301.*]

7. Deeds (§ 200*)—Delivery—Evidence.

While a deed is presumed to have been delivered at the time of its date or acknowledgment, the actual time of delivery may be shown.

[Ed. Note.—For other cases, see Deeds, Cent. Dig. § 601; Dec. Dig. § 200.*] Appeal from Circuit Court, Russell County.

Suit by James H. Shoemaker against John Shoemaker and others for partition. Upon the petition of the Chapman Drug Company and others a deed from Isaac Shoemaker to his son Bona Shoemaker was set aside, and Bona Shoemaker appeals. Reversed.

Routh & Routh, for appellant.

S. B. Quillen, Finney & Wilson, and Burns & Kelly, for appellees.

WHITTLE, J. This is an appeal from a decree setting aside a deed from Isaac Shoemaker to his son, Bona H. Shoemaker, as voluntary and fraudulent. The deed is dated December 14, 1908, and for the consideration of "$1,000.00 in hand paid" the grantor conveyed to the grantee his one-sixth undivided share in lands inherited from his brother, James Shoemaker, deceased.

At the date of the deed, a suit was pending in the circuit court of Russell county to sell these lands for partition among the heirs, and they were subsequently sold for that purpose. The appellant filed his petition in the suit, asserting title to one-sixth of the purchase money under his deed. The appellees (creditors of Isaac Shoemaker, whose debts were contracted prior to December 14, 1908, but whose judgments were subsequently recovered) likewise intervened by petitions in the principal suit, and attacked the deed as voluntary and made with intent to hinder, delay, and defraud petitioners in the collection of their debts, and also that the grantee participated in the fraud. These allegations were denied, and upon the issues thus raised by the pleadings and evidence the circuit court annulled the deed, and directed an account of liens upon the share of Isaac Shoemaker in the land fund.

The circuit court held that the proof showed confidential relations between the grantor and grantee, which cast upon the latter the burden of proving the bona fides of the transaction.

Conceding the relationship of the parties and the insolvency of the grantor, these conditions do not of themselves constitute badges of fraud, and relieve the creditors from the burden of proving the charges of fraud set forth in their pleadings.

In Johnson v. Lucas, 103 Va. 36, 48 S. E. 497, it was held that relationship was not a badge of fraud, and that there was no rule of law which forbade persons standing in near relations of consanguinity or affinity from dealing with each other. But it was said as fraud is generally accompanied by secret trust, that transactions between near relatives and persons occupying confidential relations toward each other where fraud is charged should be more closely scrutinized. Burwell v. Burwell, 103 Va. 314, 49 S. E. 68.

So of insolvency, that condition does not deprive the owner of the right to sell his property, unless the sale is made with intent to hinder, delay, and defraud creditors. Fer guson v. Daugherty, 94 Va. 308, 26 S. E. 822. [3] Fraud, it is true, may be proved either by direct or circumstantial evidence but "it is not to be assumed on doubtful evidence or circumstances of mere suspicion. It must be clearly and distinctly proved. The law never presumes fraud, but the presumption is always in favor of innocence and honesty." New York Life Ins. Co. v. Davis, 96 Va. 737, 739, 32 S. E. 475, 44 L. R. A. 305.

In Redwood v. Rogers, 105 Va. 155, 53 S. E. 6, it is said: "The charge of fraud is one easily made, and the burden of proving it rests on the party alleging its existence. It may be proved, not only by positive and direct evidence, but by showing facts and...