Thomson v. Crane

• Decision Date: 23 March 1896
• Docket Number: 588.
• Citation: 73 F. 327
• Parties: THOMSON et al. v. CRANE et al.
• Court: U.S. District Court — District of Nevada

73 F. 327

THOMSON et al. v. CRANE et al.

No. 588.

United States Circuit Court, D. Nevada.

March 23, 1896

On the 19th day of February, 1876, E. Crane conveyed to his daughter, Mrs. A. G. Styles, certain land, for the expressed consideration of $5. On June 18, 1892, he conveyed to his wife, Mary E. Crane, certain real estate in Reno, Nev., for the expressed consideration of $5 and love and affection. On July 7, 1892, he conveyed to his daughter, Amelia H. Howard 40 acres of land valued at $3,000, for the expressed consideration of $5 and love and affection. On October 5 1892, the defendants E. Crane and his wife, Mary E.Crane conveyed to their son, E. O. Crane, 80 acres of land, valued at $4,000, and 15 shares of stock in a reservoir and ditch company, of the value of $1,650, for the expressed consideration of $1,000. The conveyance to Mrs. Styles was executed long prior to the time of the transactions between E. Crane and the complainants, and no claim is or could be made against that conveyance. At the time the conveyances were made in 1892, the defendant E. Crane was about 80 years of age, and in ill health, and the conveyances were made for the purpose of dividing his property for the benefit of his children, and when he was solvent, and not indebted to any one, unless from the facts hereinafter stated, he had incurred a liability to complainants. The conveyances were all voluntary, and for the expressed consideration therein named, except the conveyance to the son, E. O. Crane, who had, previous to the conveyance, advanced to his father about $200, and the expressed consideration of $1,000 had been paid by him prior to the commencement of this suit. The daughters of defendant reside in California, and the only conveyances sought to be set aside herein are those made to Mary E. Crane and E. O. Crane.

On the 10th day of May, 1892, the complainants entered into a written agreement with the Reno Manufacturing Company, the substance of which was that Stanton Thomson & Co. appointed the Reno Manufacturing Company their agent 'for the sale of their farm implements and other goods. ' The corporation accepted said agency, and agreed to pay freight charges, taxes insurance, and other expenses, and not to sell any goods on credit except to persons of undoubted solvency, and, when credit sales were made, to take notes payable to Stanton Thomson & Co., and to guaranty their payment; to transmit to Stanton Thomson & Co. cash received on Saturday of each week, and at the close of each month to make and transmit to them an account of sales for the current month, together with all notes on hand; that at any time after six months after date of shipment of goods, if so required, the Reno Manufacturing Company should give notes for balance of consignment unpaid, and that nothing should be construed as amounting to a sale without such requirement; that the goods were to be invoiced at regular wholesale prices, and that the amounts realized over and above the specified prices were to be 'full commission' for the sales; that, for the violation of any of the covenants contained in the agreement, Stanton Thomson & Co. had the option to terminate the contract and take possession of the goods. Attached to this agreement as a part thereof, was the following guaranty:

'Know all men by these presents, that, in consideration of one dollar, to me in hand paid by Stanton Thomson & Co. * * * I hereby guaranty that the party of the second part to the within contract will in all respects fulfill the said contract, and that I will pay to Stanton Thomson & Co. any and all damages that they may suffer by reason of the failure of the party of the second part to perform each and all of the said covenants, and I further guaranty the payment to said Stanton Thomson & Co. of any and all notes made, indorsed, or guarantied by said Reno Manufacturing Company, without protest, waiving all notice of protest or nonpayment of said notes.

'In witness whereof I have hereunto set my hand and seal the day and year first above written.

'(Signed)

E. Crane. (L. S.) 'J. L. Stevenson. (L. S.)'

J. L. Stevenson was the manager of the Reno Manufacturing Company.

On the 10th day of October, 1892, Stanton Thomson & Co. commenced an action against the Reno Manufacturing Company, J. L. Stevenson, and E. Crane, and in their complaint alleged the execution of the agreement and the guaranty, and set the same out in full; alleged that the Reno Manufacturing Company, 'subsequent to the execution and delivery of said agreement, and at divers times and dates between the 10th day of May, 1892, and the 7th day of October, 1892, under and by virtue of said agreement, and in pursuance thereof, purchased and received from the plaintiff, and the plaintiff at divers times between the dates last aforesaid, to wit, in the year 1892, sold and delivered unto said defendant, Reno Manufacturing Company, certain goods, wares, and merchandise, at an agreed price, and to the full amount of $3,217.59. ' It was further alleged 'that said goods, wares, and merchandise were purchased, sold, and delivered in pursuance of said contract and agreement, and since the date thereof, at defendant's special instance and request,' and that demand for the payment thereof had been duly made, 'but to pay the same, or return said goods, said defendant Reno Manufacturing Company has, and still does, wholly fail and refuse,' and that defendants E. Crane and J. L. Stevenson were duly notified of such refusal, and that they refused to pay for or return the goods. On the same day that the complaint was filed and summons issued and served, the defendants therein appeared in court, and, without employing any counsel, filed their answer denying 'each and every material allegation alleged in plaintiff's complaint. ' Proof was made, and the court thereupon rendered judgment in favor of the plaintiff for the full amount claimed.

In the present suit the defendant E. Crane denies ever having executed the guaranty attached to the agreement, and claims that his signature thereto is a forgery. His version of the transaction is to the effect that he gave a guaranty to Stanton Thomson & Co. for $1,000, on condition that they would let Stevenson have $1,000 worth of goods and that he (Crane) would guaranty that, as fast as the goods were sold, the money would be refunded to Stanton Thomson & Co. The proofs upon the part of the complainants show that the goods were delivered to the Reno Manufacturing Company upon the faith and credit of the guaranty given by the defendant E. Crane.

Trenmor Coffin and L. T. Hatfield, for complainants.

Robert M. Clarks, and Chas. A. Jones, for defendants.

HAWLEY, District Judge, after stating the facts, orally delivered the opinion.

The statute of Nevada concerning fraudulent conveyances of real property provides, in substance, that all conveyances made with the intent to hinder, delay, or defraud creditors or other persons of their lawful suits, debts, or demands are, as against such persons, utterly null and void. Gen. St. Nev. Sec. 2638; Parish v. Murphree, 13 How. 92, 99; Collinson v. Jackson, 8 Sawy. 357, 14 F. 305; Clay v. McCally, Fed. Cas. No. 2,869; Shaw v. Manchester, 84 Iowa, 247, 50 N.W. 985; Wagener v. Mars, 27 S.C. 97, 2 S.E. 844. The statute also provides that:

'The question of fraudulent intent, in all cases arising under the provisions of this act, shall be deemed a question of fact, and not of law; nor shall any conveyance or charge be adjudged fraudulent, as against creditors or purchasers, solely on the ground that it was not founded on a valuable consideration. ' Gen. St. Nev. Sec. 2641.

The general rule is that fraud may be shown in conveyances of property, made to hinder, delay, and defraud creditors, by the conduct and appearances of the parties, the details of the transaction, and the surrounding circumstances, and may be inferred when the facts and circumstances are such as to lead a reasonable man to believe that the property of a debtor has been attempted to be withdrawn from the reach of his creditors. Cox v. Cox, 39 Kan. 121, 17 P. 847, Reynolds' Adm'rs v. Gawthrop's Heirs, 37 W.Va. 3, 16 S.E. 364; Burt v. Timmons, 29 W.Va. 441, 2 S.E. 780; Clinton v. Rice, 79 Mich. 355, 44 N.W. 790.

There is some evidence tending to show that the defendant E. Crane manifested some anxiety or uneasiness about the financial affairs of the Reno Manufacturing Company, or lack of confidence in its manager, prior to the time of the execution of the conveyances; but, from all the facts and circumstances of the case, as appears from the record, there is not, in my opinion, sufficient evidence to justify the inference that the conveyances in question, or either of them, were made or executed for the purpose of hindering, delaying, or defrauding creditors. The evidence shows that the conveyances were made apparently in good faith, and for a laudable purpose, and at a time when the grantor was solvent, and free from all debts and liabilities, save such as may have existed from the transactions growing out of and arising from the guaranty given by the grantor to the complainants for the faithful performance of the agreement on the part of the Reno Manufacturing Company.

The deeds having been executed and delivered by the grantor to the grantees without any intent on his or their part to hinder, defraud, or delay creditors of the grantor, it devolves upon the complainants to show that they were creditors of the grantor at the time he executed the deeds. A voluntary deed is fraudulent by operation of law, where the facts and circumstances clearly show that existing creditors are thereby prejudiced, without regard to whether there was any actual or moral fraud in the conveyance....