Sprague v. Ryan

• Decision Date: 21 May 1898
• Citation: 75 N.W. 390,11 S.D. 54
• Parties: ALBERT A. SPRAGUE, et al., Plaintiffs and appellants, v. GEORGE W. RYAN, Defendant and respondent.
• Court: South Dakota Supreme Court

11 S.D. 54

75 N.W. 390

ALBERT A. SPRAGUE, et al., Plaintiffs and appellants,

v.

GEORGE W. RYAN, Defendant and respondent. South Dakota Supreme Court Appeal from Circuit Court, Pennington County, SD Hon. William Gardner, Judge Affirmed Wood & Buell, Rapid City, SD Attorneys for appellants. Schrader & Lewis Attorneys for respondent. Opinion filed May 21, 1898

CORSON, P. J.

This is an appeal from an order overruling a demurrer to the answer. The action was instituted by the plaintiffs, who were judgment creditors of a firm of which one Frease was a member, to the amount of about $5,500, to recover of the defendant the value of certain real estate (alleged to be about $3,500) that said Frease had conveyed to him with intent to hinder and defraud the creditors of said Frease, and to which fraudulent intent the defendant was a party, and which the defendant transferred to an innocent grantee, thereby preventing the plaintiffs from levying upon it to satisfy their judgment. The defendant, in effect, admitted the conveyance of the property to him, subject to a $2,500 mortgage previously executed by Frease and wife in good faith, and denied that Frease’s interest in the property exceeded $3,000 in value, which sum he had agreed to pay Frease therefor. He further alleged that, a short time after said conveyance to him, he, at the request of said Frease, mortgaged said property to certain bona fide creditors of said Frease for $2,250, subject to said $2,500 mortgage, and which said $2,250 was credited upon the notes given by him to said Frease for the purchase price of said property, and that he subsequently paid said Frease $750, the balance of said purchase price, in cash. He further alleges that the said two mortgages were foreclosed, and the property sold for the amount due upon said two mortgages, and was not redeemed from such sale. He further alleged that said plaintiffs commenced. an action against this defendant to set aside the conveyance from Frease to him on the ground that the same was fraudulent and void as to the creditors of Frease, and a judgment was duly entered therein, vacating and setting aside said sale, and reverting the title to said property in said Frease, thereby subjecting it to levy under plaintiffs’ said judgment.

The plaintiffs contend that as the property was fraudulently conveyed to the defendant, and by him mortgaged to innocent mortgagees, thereby depriving the plaintiffs of the benefit of a levy upon said property under their judgment, he is liable to them for the full value of the same at the time of the transfer to him. The defendant, on the other hand, contends that as he appropriated the property to the payment of the debt of the said Frease, at his request, such appropriation constitutes a good defense to this action. He further contends that as the plaintiffs recovered a judgment against him, setting aside and vacating said conveyance from Frease to him, the title to said property was thereby revested in Frease, and was subject to execution upon the plaintiffs’ judgment, and that any claim for an accounting could have been determined in that action; that matters of accounting growing out of the transfer were a part of the issues in that case, and that they cannot again be litigated. It would appear, therefore, from the answer, that the defendant applied $2,250 of the $3,000 he had agreed to pay for the property, and which, it...