The Mode, Ltd. v. Myers

• Court: Idaho Supreme Court
• Writing for the Court: RICE, J.
• Citation: The Mode, Ltd. v. Myers, 30 Idaho 159, 164 P. 91 (Idaho 1917)
• Decision Date: 05 March 1917
• Parties: THE MODE, LTD., a Corporation, Respondent, v. SADA MYERS, Appellant

164 P. 91

30 Idaho 159

THE MODE, LTD., a Corporation, Respondent, v. SADA MYERS, Appellant

Supreme Court of Idaho

March 5, 1917

TITLE TO REAL ESTATE-ADVERSE CLAIM-FRAUDULENT CONVEYANCES-EXECUTION SALE-DEFECTIVE COMPLAINT.

1. An application to amend complaint while motion for nonsuit is pending is addressed to the sound discretion of the trial court.

2. A defective allegation of a good cause of action, in the absence of a demurrer, is cured by a verdict and judgment.

3. Where a judgment debtor causes real property which he has purchased to be conveyed by his vendor direct to a third person, and the transfer of his interest to such third person is fraudulent and void as to creditors, and the judgment creditor levies upon and sells such property as the property of the judgment debtor, the holder of the sheriff's deed on such sale may, under sec. 4538, Rev. Codes, maintain an action as owner to quiet title.

[As to when a general verdict causes defects in pleading, see note in 1 Am.Dec. 210]

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Charles P. McCarthy, Judge.

Action to quiet title to real property. Judgment for plaintiff. Affirmed.

Judgment of the district court affirmed. Costs awarded to respondent.

Smead Elliott & Healy and W. A. Ricks, for Appellant.

"Where one purchases land and has the title made to his wife in fraud of creditors, it is deemed an equitable and not a legal asset. . . . The interest of the debtor in such case cannot be sold on execution at law." (Robinson v Springfield Co., 21 Fla. 203.)

Execution sale does not transfer title to real estate to which the debtor never had the legal title; where real estate is paid for by debtor, but conveyance made from third party to his wife to defraud creditors, execution does not vest title in creditors. His remedy is to obtain in equity a decree compelling the conveyance of the property, and not a suit to quiet based on a present claim of title. (Dockray v Mason, 48 Me. 178; Carlisle v. Tindall, 49 Miss. 229; Trask v. Green, 9 Mich. 358.)

Execution sale does not pass any title where judgment debtor never owned the property. The debt should be made a lien against the property. This is the equitable rule. (Haggerty v. Nixon, 26 N.J. Eq. 42, 46.)

Purchaser gets no title in case of conveyance direct to some third party. Remedy is an action in equity in nature of creditor's bill, and to hold grantee as trustee for creditors. (Everett v. Raby, 104 N.C. 479, 17 Am. St. 685, 10 S.E. 526; Garfield v. Hatmaker, 15 N.Y. 475; Hyde v. Chapman, 33 Wis. 391; Doe v. McKinney, 5 Ala. 719; Howe v. Bishop, 3 Met. (44 Mass.) 26; Blood v. Wood, 1 Met. (42 Mass.) 528.)

Conveyance cannot be set aside unless the fraud complained of be alleged and proven. (Kerns v. Washington Water Power Co., 24 Idaho 525, 135 P. 70; Wilson v. Baker Clothing Co., 25 Idaho 378, 137 P. 896, 50 L. R. A., N. S., 239.)

In actions under sec. 4538 (Code Civ. Proc. 738), to quiet title, plaintiff must establish a legal, as distinguished from a mere equitable, title. (Fudickar v. East Riverside Irr. Dist., 109 Cal. 29, 41 P. 1024; Von Drachenfels v. Doolittle, 77 Cal. 295, 19 P. 518; Nidever v. Ayers, 83 Cal. 39, 23 P. 192; Bryan v. Tormey, 84 Cal. 126, 24 P. 319; Harrigan v. Mowry, 84 Cal. 456, 22 P. 658, 24 P. 48.)

Equitable title must be pleaded; if not evidence concerning the same is properly ignored. (Reilly v. Wright, 117 Cal. 77, 48 P. 970.)

Martin & Cameron, for Respondent.

Findings of fact by the court and judgment thereon based on evidence substantially conflicting will not be disturbed on appeal. ( Cartier v. Buck, 9 Idaho 571, 75 P. 612; Abbott v. Reedy, 9 Idaho 577, 75 P. 764; Cowden v. Mills, 9 Idaho 626, 75 P. 766; Heckman v. Espey, 12 Idaho 755, 88 P. 80; Salisbury v. Spofford, 22 Idaho 393, 126 P. 400; Hufton v. Hufton, 25 Idaho 96, 136 P. 605.)

Amendments to pleadings rest largely in the discretion of the court, and rulings thereon by the trial court will not be disturbed on appeal, except it appear that the exercise of such discretion has deprived the party complaining of some substantial right. (Palmer v. Utah & Northern R. Co., 2 Idaho 382, 16 P. 553; Rankin v. Caldwell, 15 Idaho 625, 99 P. 108; Havlick v. Davidson, 15 Idaho 787, 100 P. 91; Mantle v. Jack Waite Min. Co., 24 Idaho 613, 135 P. 854, 136 P. 1130.)

Under sec. 4477, Rev. Codes, all beneficial estates in real estate are liable to be taken on execution irrespective of the question whether they are legal or equitable; it is the principle as well as the policy of the law to subject every species of property of the judgment debtor to payment of his debts, and no property is exempt except such as is specially exempted by law. (Kennedy v. Nunan, 52 Cal. 326; Le Roy v. Dunkerly, 54 Cal. 452; Pacific Bank v. Robinson, 57 Cal. 520, 40 Am. Rep. 120.)

"Every estate or interest known to the law, whether legal or equitable, may be determined in an action of this kind." (Coleman v. Jaggers, 12 Idaho 125, 118 Am. St. 207, 85 P. 894; Shields v. Johnson, 10 Idaho 476, 3 Ann. Cas. 245, 79 P. 391; Johnson v. Hurst, 10 Idaho 308, 77 P. 784; Fry v. Summers, 4 Idaho 424, 39 P. 1118; Clifton v. Herrick, 16 Cal.App. 484, 117 P. 622.)

RICE, J. Budge, C. J., and Morgan, J., concur.

OPINION

RICE, J.

This is an action to quiet title to lots 7, 8, 9 and 10, of block 29, Ellis Addition to Boise. The complaint alleged title to the property in the plaintiff, respondent here, and stated that the defendants, among whom was appellant, Sada Myers, claimed unfounded adverse interests therein. The answer of appellant Sada Myers denied title in the plaintiff and by way of cross-complaint alleged title in herself and prayed that her title be quieted. Both respondent and appellant derived title from Walter A. Myers, husband of the appellant. The respondent claims through sheriff's deed executed by virtue of a sale under an execution issued upon a judgment against Walter A. Myers. Appellant claims lots 7 and 8 through deeds of conveyance, and lots 9 and 10 through an assignment of a contract to her by Walter A. Myers and a subsequent conveyance under said contract by the Pierce Suburban Syndicate. Defendant Florence K. Fahrney answered, claiming an interest as an innocent purchaser of a portion of the property. It was stipulated that her interests should be protected and she is not interested in this appeal. The remaining defendants disclaimed any interest in the property.

At the trial, after the plaintiff had rested, the answering defendants moved for a judgment of nonsuit. The trial court permitted the plaintiff to amend its complaint, upon a showing of diligence, and a paragraph was added alleging fraudulent conveyance from the said Walter A. Myers to appellant Sada Myers.

Permission to amend upon the showing made by counsel for respondent, while motion for nonsuit was pending, is assigned as error. Under sec. 4229, Rev. Codes, the application was addressed to the sound discretion of the trial court, to be exercised, according to the admonition of the statute, in the furtherance of justice. (Havlick v. Davidson, 15 Idaho 787, 100 P. 91.) While the showing of diligence on the part of attorneys for respondent, as read from the record, is not very persuasive, we do not think the trial court abused its discretion in permitting the amendment. This is particularly true in view of the offer of the court to continue the case, should the appellant claim surprise and desire further time in which to present her defense. (Lorang v. Randall, 27 Idaho 259, 148 P. 468.)

The amendment to the complaint reads as follows:

"That the defendant Walter A. Myers has made fraudulent conveyances to the defendant Sada Myers by which said defendant Sada Myers claims some interest, right, or title in and to the lots in controversy herein described, in this: that said Walter A. Myers was insolvent and while so insolvent made conveyances without consideration of his property, the property in question herein with intent to hinder, delay and defraud his creditors, and especially the plaintiff creditor in this action. And at the time the defendant Walter A. Myers did cause to be made this pretended conveyance without consideration, and said defendant Walter A. Myers knew he was insolvent and had sworn less than a month prior to this pretended conveyance without consideration that he had no property out of which the plaintiff creditor could satisfy its judgment. That at the time said conveyance of the property in controversy was pretended to be dated and made by Walter A. Myers to Sada Myers, his wife, said Walter A. Myers had no other property other than this property in question whatever out of which this plaintiff creditor could satisfy his said indebtedness."

The allegation would be entirely insufficient if it were challenged by demurrer, but in the absence of a demurrer such defective statement of a cause of action is cured by a verdict, or findings and judgment. (Salmon Falls Bank v. Leyser, 116 Mo. 51, 22 S.W. 504; San Francisco v. Pennie, 93 Cal. 465, 29 P. 66; Larkin v. Mullen, 128 Cal. 449, 60 P. 1091.)

"After judgment the rule by which pleadings before judgment are construed most strongly against the pleader is reversed, and the pleading upon which the judgment is based is liberally construed for the purpose of sustaining the judgment." ( Plew v. Board, 274 Ill. 232, 113 N.E. 603.)

In this case it was shown that the defendant W. A Myers was a judgment debtor of the respondent; that while so indebted, without consideration, he executed a conveyance of two of the lots in question to appellant, Sada Myers, and caused to be executed a conveyance of the remaining two lots in question to appellant; that at...