Sutherland v. Noggle
| Decision Date | 30 December 1916 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Stark County, Crawford, J.
Remanded for a new trial.
Thomas H. Pugh, for appellant.
The question of the fraudulent intent is one of fact, and not of law, under our statute, and no transfer of property may be adjudged fraudulent solely on the ground that it was not made for a valuable consideration. Black Hills Mercantile Co v. Gardiner, 5 S.D. 246, 58 N.W. 557; Dalrymple v Security Loan & T. Co. 9 N.D. 306, 83 N.W. 245.
Nor will the relationship of the parties alone afford such ground. Fluegel v. Henschel, 7 N.D. 276, 66 Am. St Rep. 642, 74 N.W. 996.
The grantor in an alleged fraudulent conveyance may testify as to what his intent in fact was. 6 Enc. Ev. 130; Brown Bros v. Potter, 13 Colo.App. 512, 58 P. 785; Love v. Tomlinson, 1 Colo.App. 516, 29 P. 666; Seymour v. Wilson, 14 N.Y. 567.
Retention of possession of the property by the grantor would not be evidence that same was not made in good faith. Scholle v. Finnell, 167 Cal. 90, 138 P. 746.
Evidence of other frauds committed by the grantor in which the grantee did not participate, not receivable. 6 Enc. Ev. 149 and cases cited.
The grantee in such cases is not in duty bound to inquire as to the fraudulent intent of the grantor, unless he has actual knowledge of some suspicious circumstances sufficient to put a prudent man upon inquiry. Wannemacher v. Merrill, 22 N.D. 46, 132 N.W. 412; Fluegel v. Henschel, supra.
Notice of fraud must be clear and undoubted with respect to prior rights, and sufficiently strong to make it fraudulent for the grantee to take and hold the property, and must be before the transaction. Raymond v. Flavel, 27 Ore. 219, 40 P. 158; Ball v. Danton, 64 Ore. 184, 129 P. 1039; Urdangen & G. Bros. v. Doner, 122 Iowa 533, 98 N.W. 317.
Where a creditor receives only so much of the property of the grantor as will satisfy a pre-existing debt, the fact that he may know that his grantor is actuated by a desire to defraud his other creditors will not taint the transaction. Lockren v. Rustan, 9 N.D. 43, 81 N.W. 60, and cases cited; 20 Cyc. 472; Atlantic Ref. Co. v. Stokes, 77 N.J.Eq. 119, 75 A. 445; National Surety Co. v. Udd, 65 Wash. 471, 118 P. 347; Kerns v. Washington Water Power Co. 24 Idaho 525, 135 P. 70; First Nat. Bank v. Eichmeier, 153 Iowa 154, 133 N.W. 454; Sly v. Bell, 131 Iowa 184, 117 Am. St. Rep. 417, 108 N.W. 227; G. Ober & Sons Co. v. Phillips-Burtoff Mfg. Co. 145 Ala. 625, 40 So. 278; Whiting v. Hoglund, 127 Wis. 135, 106 N.W. 391, 7 Ann. Cas. 224; Jackson v. Citizens Bank & T. Co. 53 Fla. 265, 44 So. 516; State use of Salomon v. Mason, 112 Mo. 347, 34 Am. St. Rep. 390, 20 S.W. 629.
The complaining creditor must show the grantee's participation in the fraud of which complaint is made. Blumer v. Bennett, 44 Neb. 873, 63 N.W. 14; Steinberg v. Buffum, 61 Neb. 778, 86 N.W. 491; Holt Mfg. Co. v. Bennington, 73 Wash. 467, 132 P. 30; Scholle v. Finnell, 167 Cal. 90, 138 P. 746; Commercial Nat. Bank v. Page, 45 Utah 14, 142 P. 709.
F. C. Heffron and L. A. Simpson, for respondents.
It is sufficient to void a transfer as to all creditors if it is fraudulent as to one or any part of the creditors. Daisy Roller Mills v. Ward, 6 N.D. 317, 70 N.W. 271; Burt v. C. Gotzian & Co. 43 C. C. A. 59, 102 F. 937; Shauer v. Alterton, 151 U.S. 607, 38 L.Ed. 286, 14 S.Ct. 442; Comp. Laws 1913, §§ 7220, 7290; Salemonson v. Thompson, 13 N.D. 182, 101 N.W. 320.
Transfers which defraud creditors, when made to relatives, are looked at and scrutinized much more closely and require much less evidence to set them aside, than if made to strangers. Whitson v. Griffis, 39 Kan. 211, 7 Am. St. Rep. 546, 17 P. 801; Plummer v. Rummel, 26 Neb. 142, 42 N.W. 336; Missinskie v. McMurdo, 107 Wis. 578, 83 N.W. 758; Mellier v. Bartlett, 106 Mo. 381, 17 S.W. 295; Burt v. Timmons, 29 W.Va. 441, 6 Am. St. Rep. 664, 2 S.E. 780.
And in such cases the relative is presumed to know the character of the transaction. Robson v. Hamilton, 41 Ore. 239, 69 P. 651; Lusk v. Riggs, 70 Neb. 713, 97 N.W. 1033, 102 N.W. 88; Goodale v. Wheeler, 41 Ore. 190, 68 P. 753.
A preference to a relative is also presumed to be fraudulent. Mendenhall v. Elwert, 36 Ore. 375, 52 P. 22, 59 P. 805; Heffley v. Hunger, 54 Neb. 776, 75 N.W. 53; Stauffer v. Kennedy, 47 W.Va. 714, 35 S.E. 892; Bank of Colfax v. Richardson, 34 Ore. 518, 75 Am. St. Rep. 664, 54 P. 359; Flint v. Chaloupka, 78 Neb. 594, 13 L.R.A. (N.S.) 309, 126 Am. St. Rep. 639, 111 N.W. 465; Simon v. Reynolds-Davis Grocery Co. 108 Ark. 164, 156 S.W. 1015.
Where the findings of the trial court are supported by substantial evidence, even though the entire evidence is conflicting, they should not be disturbed. Caledonia Gold Min. Co. v. Noonan, 3 Dak. 189, 14 N.W. 426; State ex rel. Morrill v. Massey, 10 N.D. 154, 86 N.W. 225; Webster v. White, 8 S.D. 479, 66 N.W. 1145; Caufield v. Bogle, 2 Dak. 464, 11 N.W. 511; First Nat. Bank v. Prior, 10 N.D. 146, 86 N.W. 362; Steinfort v. Langhout, 170 Iowa 422, 152 N.W. 612.
One who has a valid, unquestioned judgment against his debtor in and by a court of competent jurisdiction is a creditor as against the fraudulent grantee of his judgment debtor. Salemonson v. Thompson, 13 N.D. 182, 101 N.W. 320.
The question of fraudulent intent is one of fact, and not of law, and the trial court in this case expressly found that there was fraudulent intent, and such finding should not be disturbed. Paulson v. Ward, 4 N.D. 100, 58 N.W. 792; Meighen v. Chandler, 20 N.D. 238, 126 N.W. 992.
Where the circumstances clearly show that the property was transferred for the purpose of placing it beyond the reach of the grantor's creditors, the transfer is fraudulent. Burt v. C. Gotzian & Co. 43 C. C. A. 59, 102 F. 937.
The judgment finally entered in pursuance of the litigation between the original parties should be binding upon the judgment debtor's grantee the same as it is between the parties. Decker v. Decker, 108 N.Y. 128, 15 N.E. 307; Gracey v. Davis, 3 Strobh. Eq. 55, 51 Am. Dec. 663; Watt v. Morrow, 19 S.D. 317, 103 N.W. 45; Soly v. Aasen, 10 N.D. 108, 86 N.W. 108; Lyon v. Plankington Bank, 15 S.D. 400, 89 N.W. 1017; Fluegel v. Henschel, 7 N.D. 276, 66 Am. St. Rep. 642, 74 N.W. 996; Satterwhite v. Hicks, 44 N. C. (Busbee, L.) 105, 57 Am. Dec. 577; Kansas Moline Plow Co. v. Sherman, 3 Okla. 204, 32 L.R.A. 33, 41 P. 623; Newell v. Wagness, 1 N.D. 62, 44 N.W. 1014; Billings v. Russell, 101 N.Y. 226, 4 N.E. 531; Marcus v. Leake, 4 Neb. (Unof.) 354, 94 N.W. 100; Garland v. Rives, 4 Rand. (Va.) 282, 15 Am. Dec. 756; Morley Bros. v. Stringer, 133 Mich. 690, 95 N.W. 978; Barhydt v. Perry, 57 Iowa 416, 10 N.W. 820; Welch v. Bradley, 45 Minn. 540, 48 N.W. 440; Bostwick v. Blake, 145 Ill. 85, 34 N.E. 38.
This is an action to quiet title to a tract of land in Stark county, and to restrain the sheriff of said county from selling the same upon an execution issued upon a judgment rendered in an action in the district court of Stark county, entitled William J. Noggle, Plaintiff, v. G. W. McClellan, Defendant.
The trial court made the following findings of fact and conclusions of law:
Findings of fact.
2. That William J. Noggle was a partner of said McClellan in the coal and cement business in Dickinson for some time prior to May 29, 1911, and on that date, after some dispute, they dissolved partnership, said McClellan giving said Noggle in settlement certain notes upon which an action was brought in said district court, entitled William J. Noggle, Plaintiff, v. G. W. McClellan, doing business under the name of Dickinson Cement and Coal Company, Defendant, in which action a judgment was duly entered and docketed in favor of said Noggle and against said McClellan for seven hundred eight and 3/100 ($ 708.03) dollars on December 22, 1911, which judgment has not been paid; that at the time of commencing said action a writ of attachment was duly issued pursuant to which a levy was duly made on said premises by the sheriff of said Stark county.
3. That prior to May, 1911, said McClellan had purchased upon a contract said land from W. L. Richards and Charles Bakke, together with the south half of the same quarter section, and in May, 1911, owed said Richards and Bakke seven hundred ($ 700) dollars on the purchase price of said land. That, by fraudulent importunities by said McClellan, said Richards and said Bakke were induced to give said McClellan a deed to said land, and took a note from said McClellan for seven hundred ($ 700) dollars, which has never been paid.
4. That immediately after obtaining said deed and after giving said notes to said Noggle, said McClellan began disposing of his property, principally to S. S. Sutherland and said Mark Sutherland; that he gave said Mark Sutherland a bill of sale on June 1, 1911, of a large part of his personal property, to which bill of sale said S. S. Sutherland was a witness, and which personal property was retained in the possession of said McClellan after June 1, 1911, to the same extent as before; that on June 1, 1911, he transferred his coal business to Schiller Brothers; that at about the same time he gave the Dakota National Bank a chattel mortgage on other personal property for sixteen hundred ($ 1,600) dollars; that at about the same time he gave a bill of sale of his cement business to Anderson and Himmelspach, but continued to take cement contracts in his own name...
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