Union Nat. Bank of Minot v. Pers

• Decision Date: 15 November 1921
• Citation: 48 N.D. 478,185 N.W. 266
• Parties: UNION NAT. BANK OF MINOT v. PERSON et ux.
• Court: North Dakota Supreme Court

48 N.D. 478

185 N.W. 266

UNION NAT. BANK OF MINOT

v.PERSON et ux.

Supreme Court of North Dakota.

Oct. 19, 1921.

Rehearing Denied Nov. 15, 1921.

Syllabus by the Court.

Plaintiff's action is brought to procure a certain deed executed and delivered by the defendant Andrew Person to his wife, Edla R. Person, declared fraudulent and void.

It is held that plaintiff has failed to establish as a fact that the conveyance was made with the intent to defraud the creditors.

Appeal from District Court, Burleigh County; J. A. Coffey, Judge.

Action by the Union National Bank of Minot against Andrew Person and wife. Judgment for defendants and plaintiff appeals. Affirmed.

Robinson, J., dissenting.Cameron & Wattam, of Bismarck, and Fisk & Murphy, of Minot, for appellant.

Theodore Koffel, of Bismarck, for respondents.

GRACE, C. J.

This action was brought to have a certain deed executed and delivered by the defendant Andrew Person to his wife, Edla R. Person, declared fraudulent and void as against the plaintiff, a creditor. The action was tried to the court without a jury. It made findings of facts, conclusions of law, and an order for judgment in defendant's favor. Judgment was entered in pursuance to the order, and this appeal is from the judgment and a trial de novo in this court requested.

The debt which is the basis of the plaintiff's cause of action is a judgment recovered by it against the defendant and others, on or about December 17, 1919.

The complaint contains the usual and necessary allegations in a cause of action of this nature. The defendants answered separately, alleging a good and valuable consideration for the transfer, and denied that the conveyance of the property from Person to his wife was made with fraudulent intent to dispose of the property conveyed or transferred for the purpose of placing it beyond the reach of his creditors, and further alleging that Edla R. Person purchased from her husband the premises and property in question in the summer of 1916, and paid him therefor the full value thereof.

The trial court made the following findings of fact. If these findings are sustained by the evidence, the judgment appealed from should be affirmed. They are as follows:

Findings of Fact.

I. That the above-entitled action was duly and regularly commenced in the district court of Burleigh county, N. D., by the issuance of a summons therein as provided by law, dated the 28th day of June, A. D. 1920, and that said summons and the complaint in said action were duly served upon said defendants in Burleigh county, N. D., and that said complaint sets forth a cause of action against the defendants for the transfer of certain property in fraud of their creditors, and that the defendantswithin the time prescribed by law served their answer thereto and issue joined.

II. That during the month of May, 1916, the defendants entered into a good and valid agreement in good faith, wherein and whereby the defendant Andrew Person sold and assigned and conveyed to the defendant Edla R. Person the premises described in the complaint, together with other property, both real and personal, for a good, valid, and sufficient consideration, and which said agreement was subsequently thereto carried out in full; that the defendant Edla R. Person paid to the defendant Andrew Person the sum of $11,000 cash; $4,000 of which had been advanced prior to said agreement at various times and in various sums, and the balance thereof, $7,000 was paid in full by the defendant Edla R. Person, to the defendant Andrew Person, early in the spring of 1917; that in addition thereto the defendants placed a mortgage on the premises described in the complaint for the sum of $27,750, which mortgage the defendant Edla R. Person assumed; and further assumed debts and obligations contracted on the improvement of the building on said property amounting to $3,000 worth of material to the Carpenter Lumber Company, and $7,000 to the First National Bank of Bismarck; that at the time of said agreement there were other incumbrances against the property described in the complaint and the other property conveyed, which were paid out of the $27,500 mortgage, and that the consideration paid by the defendant Edla R. Person was a full, fair, and reasonable consideration for the property both real and personal, transferred to her by her husband, the defendant Andrew Person.

III. That, at the time of the said agreement and the transfer of property therein contracted to be sold and conveyed, the defendant Andrew Person was not indebted to this plaintiff, or any other person, to such an amount or in such sums as would make this transfer fraudulent as to the plaintiff, or any other creditor; and that the defendants had a good and legal right to make the agreement in May, 1916, alleged and proved; that said agreement was made in good faith by both the defendants Edla R. Person and Andrew Person, and without the intent of hindering, delaying, or defrauding the creditors of the defendants or either of them.

IV. That the debts on which the judgment of the plaintiff is founded was created subsequent to the agreement between the defendant Andrew Person and his wife, Edla R. Person; and that the exhibits or said indebtedness show upon their face that all notes signed by the defendant Andrew Person were paid in full, except $500; that the plaintiff never notified or demanded payment from the defendant Andrew Person prior to the conveyance by said Andrew Person of the property described in the complaint.

V. That the defendant Andrew Person had a good right to honestly believe, and did believe, that the indebtedness and notes which he had signed and which were made payable to the plaintiff had all been fully paid prior to the conveyance of the premises by him to the defendant Edla R. Person.

VI. That the defendant Edla R. Person had no knowledge of any indebtedness of her husband to the plaintiff, nor had she any knowledge of any facts or circumstances which would put her upon her inquiry as to any indebtedness of her husband, Andrew Person, to the plaintiff at the time when she made her agreement with her husband for the purchase of the said premises described in the complaint, and the other property, both real and personal, described in said agreement, nor at the time that she made the final payment of the consideration agreed to be paid to her husband, nor at the time that the conveyances were actually made to her, nor at any time before said agreement was fully completed between her and the defendant, Andrew Person.

VII. That said agreement, sale, and transfer of the property by the defendant Andrew Person to the defendant Edla R. Person were made in absolute good faith and without the intent on the part of either of said defendants to hinder, delay, defraud, or cheat the creditors of the defendant Andrew Person, or any other person whatsoever; that the said agreement was fair, and reasonable, and legal in all respects, and full consideration paid for the property conveyed.

VIII. That the plaintiff, the Union National Bank of Minot, has wholly and utterly failed to prove any fraud committed by the defendants, or either of the defendants, upon the part of the plaintiff, or any other person, in the transaction complained of or in the conveyance of the property described in the complaint by the defendant Andrew Person to the defendant Edla R. Person, or any of the property agreed to be transferred and subsequently conveyed in the agreement made between the defendants in May, 1916; that the delay in finally completing said agreement between the defendants does not evidence or raise any presumption of fraud between said defendants, but, on the contrary, raises a presumption of good faith, and the belief of the defendants themselves in their right to make the transaction, and to make it in their own way, and at the times it was convenient to them, having no fear of any intervention by any creditor or any other person who might object thereto, and does not manifest a disposition on the part of the defendants to transfer property in haste in order to defeat creditors.

IX. That...