State Bank of New Salem v. Schultze

• Decision Date: 10 October 1922
• Docket Number: No. 4780.,4780.
• Parties: STATE BANK OF NEW SALEM v. SCHULTZE (MCCORMICK, INTERVENER).
• Court: Montana Supreme Court

63 Mont. 410

STATE BANK OF NEW SALEM
v.
SCHULTZE (MCCORMICK, INTERVENER).

No. 4780.

Supreme Court of Montana.

Oct. 10, 1922.

Appeal from District Court, Yellowstone County; Charles A. Taylor, Judge.

Action by the State Bank of New Salem, a banking corporation, against Minnie Schultze. Intervention by J. B. McCormick, trustee in bankruptcy. From an amended judgment, defendant appeals. Judgment affirmed with remittitur to issue.

Geo. W. Pierson, of Billings, for appellant.

Nichols & Wilson, of Billings, for respondent.

GALEN, J.

A rehearing was granted in this case, and in consequence a different view is entertained regarding the questions presented, though the result is the same in effect as to the appellant, Minnie Schultze. So as to avoid confusion and incumbrance of the record, the original opinion rendered herein May 18, 1922, is withdrawn, and this one substituted.

It appears that the plaintiff, the State Bank of New Salem, a North Dakota corporation, brought suit against Max, Minnie, and Fred C. R. Schultze and one Oscar Goeschel, seeking recovery upon several promissory notes described, aggregating $11,940.67, and asking that decree be made adjudging that a conveyance of certain land described as section 34, township 2 north, of range 29 east, made by the defendant Max Schultze and wife to the defendant Oscar Goeschel, and from the defendant Oscar Goeschel to the defendant Minnie Schultze, wife of the defendant Max Schultze, be declared fraudulent and void as against the plaintiff. Appearance was made by answer in this action by the defendant Minnie Schultze and Oscar Goschel, wherein the indebtedness was admitted, and the fraudulent character of the conveyances and insolvency of Max and Fred Schultze denied.

Thereafter J. V. McCormick made timely filing of his complaint in intervention, as trustee in bankruptcy of Max Schultze, wherein he alleged in part that this action was begun on the 29th of September, 1917, and that on the 24th day of January, 1918, the defendant Max Schultze was adjudged a bankrupt upon his voluntary petition filed in the United States District Court for the District of North Dakota. Further, that on the _____ day of ______, 1913, the defendant Max Schultze purchased from the United States government at public land sale four sections of land in Big Horn county, described; that at the time of making the purchase he procured the issuance of four certificates of sale having them “run to the following named parties: Section 10, 1 north, 28, to Minnie Schultze, his wife; section 34, 2 north, 29, to Fred C. R. Schultze, his son; section 11, 1 north, 28 E., to himself.”

The intervener then alleges:

“IV. That thereafter as subsequent payments became due for the purchase of the above-described lands, the defendant Max Schultze borrowed from the defendant Oscar Goeschel sums of money aggregating about $5,000.00, and as security for the money advanced by the said Goeschel the said defendant Schultze procured the execution and delivery to Goeschel, on November 30, 1914, of a deed to section 34, 2 north, 29 east; on October 20, 1915, of a deed to section 11, 1 north, 28 east; and upon the same date a deed from Minnie Schultze to section 10, 1 north, 28 east. That each of the deeds above mentioned were given only as security to the said Goeschel, and so accepted by him, and that the same were in truth and in fact mortgages.

V. That thereafter the said Max Schultze sold the land in Big Horn county, described as section _____, township _____, range _____, then standing in the name of his son Fred C. R. Schultze, the deed therefor having been executed by the defendant Goeschel to the purchaser, but the proceeds thereof being retained by the said defendant Max Schultze.

VI. That the said Max Schultze thereafter became heavily involved, owing large amounts to his creditors, and was in fact insolvent, and for the purpose of hindering, delaying, and defrauding his creditors the said defendant Max Schultze procured the execution, on the 15th day of September, 1917, of a deed from himself and wife, the defendant Minnie Schultze, to the defendant Oscar Goeschel, for section 11, 1 north, 28 east; and also of a deed from the defendant Minnie Schultze and himself to the defendant Oscar Goeschel for section 10, 1 north, 28 east, and thereafter, and on September 19, 1917, procured a deed from the said Goeschel to his wife, Minnie Schultze, of section 34, 2 north, 29 east. That the defendant thereby placed in the name of his wife the title to the said section 34, and in the defendant Goeschel the title to sections 10 and 11, and attempted to place beyond the reach of his creditors all of the land so purchased and owned by him.

VII. That the defendant Minnie Schultze gave no consideration whatever for the conveyance to her of the land above set forth, nor did she have any money, in fact, invested in any of the lands hereinbefore described; the purchase of said section 10 having been made nominally in her behalf, but in truth and in fact for the benefit of the defendant Max Schultze. That the said Minnie Schultze had knowledge of the insolvent condition of her said husband and the fraudulent intention and purpose on his part to hinder, delay, and defraud his creditors, and accepted the title thereto with the intention and for the purpose of assisting the said defendant Max Schultze in so defrauding his creditors.

VIII. That the making of the aforesaid conveyances and the transfer of...