Wynne v. Boone

• Decision Date: 26 April 1951
• Docket Number: 10430.,No. 10429,10429
• Citation: Wynne v. Boone, 191 F.2d 220, 88 U.S.App.D.C. 363 (D.C. Cir. 1951)
• Parties: WYNNE et al. v. BOONE et al. BOONE v. BOONE et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

88 US App. DC 363, 191 F.2d 220 (1951)

WYNNE et al. v. BOONE et al. BOONE v. BOONE et al.

Nos. 10429, 10430.

United States Court of Appeals District of Columbia Circuit.

Argued April 20, 1950.

Decided April 26, 1951.

Richard L. Merrick, Washington, D. C., for appellants in No. 10429.

Frederick Bernays Wiener, Washington, D. C., for appellant in No. 10430.

Louis M. Denit, Washington, D. C., with whom Thomas S. Jackson, A. Leckie Cox and P. Baxter Davis, Washington, D. C., were on the brief, for appellees.

Before EDGERTON, CLARK and WASHINGTON, Circuit Judges.

WASHINGTON, Circuit Judge.

This action was brought by appellees in October 1946 to set aside, as in fraud of creditors, a conveyance of realty on 16th Street, in Washington, D. C., from Daniel F. Boone to Jessie V. Wynne (wife of George C. Wynne), executed on October 27, 1942, as well as a deed of trust on the same property, executed on June 29, 1942, securing George C. Wynne in the sum of $2,500 and naming Mrs. Wynne and her brother-in-law as trustees.

The appellees had previously instituted two actions against Boone in North Carolina, for an accounting of his administration as executor and trustee of two estates, and of a trust fund for his minor daughter. One action was commenced on June 21, 1941, and a North Carolina judgment in favor of plaintiffs on that action was recovered on May 26, 1942.¹ The other action was commenced on the 29th of October, 1940, and a judgment was recovered in North Carolina on October 12, 1942.² Two separate actions were commenced in the District Court for the District of Columbia to reduce these North Carolina judgments to local judgments. The District of Columbia judgments were secured on December 18, 1945,³ and on March 14, 1946. The amount of the indebtedness due under these District of Columbia judgments is over $15,000 (Jt.App. 21, 45-48, 173-75).

The present action was brought under section 12-401 of the District of Columbia Code, which provides: "Every conveyance or assignment, in writing or otherwise, of any estate or interest in lands or rents and profits issuing from the same, or in goods or things in action, and every charge upon the same, and every bond or other evidence of debt given, or judgment or decree suffered, with the intent to hinder, delay, or defraud creditors or other persons having just claims or demands of their lawful suits, damages, or demands, shall be void as against the persons so hindered, delayed, or defrauded: Provided, That nothing herein shall be construed to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear that such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor: Provided further, That the question of fraudulent intent shall be deemed a question of fact and not of law. (Mar. 3, 1901, 31 Stat. 1368, ch. 854, § 1120.)"

From a judgment of the District Court setting aside the deed of trust and the absolute conveyance, the grantor and the grantees bring these appeals.

I.

Appellants' first contention is that the evidence adduced at the trial was not sufficient to justify the judge (Letts, J., who sat without a jury), in reaching his findings.⁴

We have studied the record before us with considerable care. The evidence presents difficult issues. But we must make it clear that we are not called upon to decide whether or not we would as an original matter enter findings identical with those of the trial judge. It is not our function to weigh the evidence and determine which construction of it appears most logical to us. Our task as an appellate court is defined for us, and our powers delimited, by rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., which provides that findings of fact made by the trial judge "shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses."

In this case, in contrast with such cases as Dollar v. Land, 87 U.S.App.D.C. 214, 184 F.2d 245, the evidence was not primarily documentary. Oral testimony, dependent upon the "candor and credibility of the witnesses", United States v. U. S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746, was the crux of the case. The trial judge saw and heard the witnesses; we have done neither. Under Rule 52, we must give due weight to the opportunity which he thus possessed. We must recognize that the trial judge may disregard the testimony of a particular witness "even in the absence of any direct conflicting testimony. He the witness may be contradicted by the facts he states as completely as by direct adverse testimony; and there may be so many omissions in his account of particular transactions, or of his own conduct, as to discredit his whole story. His manner, too, of testifying may give rise to doubts of his sincerity, and create the impression that he is giving a wrong coloring to material facts. All these things may properly be considered in determining the weight which should be given to his statements, although there be no adverse verbal testimony adduced." Quock Ting v. United States, 140 U.S. 417, 420-421, 11 S.Ct. 733, 734, 35 L. Ed. 501.⁵

This court has said that "fraud must be shown by clear and convincing evidence — * * * evidence which is not equivocal, that is, equally consistent with either honesty or deceit * * *." Public Motor Service v. Standard Oil Co. of New Jersey, 69 App.D.C. 89, 91, 99 F.2d 124, 126. But we have also recognized that circumstantial evidence is sufficient to prove fraud. De Walt v. Doran, 21 D.C. 163, 179-180; Callan v. Statham, 23 How. 477, 64 U.S. 477, 16 L.Ed. 532. Those who are alleged to have committed a fraud are unlikely to confess wrongdoing, and the sole source for inference of either honesty or deceit may be the circumstances of the transaction.

Our duty under the mandate of Rule 52(a) is to uphold the trial judge's findings of fact "unless clearly erroneous". That duty cannot be supplanted by the application of a rule requiring fraud to be shown by clear and convincing evidence, sound though such a rule is as a guide to the trial court or jury in deciding particular issues.⁶ We repeat that it is not our function to weigh the evidence. It is not necessary that we ourselves find the evidence on the issue of fraud to be clear and convincing.⁷ Our sole function is to decide whether or not the trial judge was clearly in error in being convinced by the evidence presented. United States v. U. S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746.

We have reviewed the record in the light of these standards. We note that Wynne and Boone testified, among other things, that they had long been intimate friends (Jt.App. 83, 102); that loans totaling $2,500 had been made by Wynne to Boone, prior to the execution of the deed of trust (Jt.App. 50-53, 55-56, 84-89); that the latter instrument was given to secure these loans (Jt.App. 56, 88-89); that the $2,500 was due in installments of $25.00 a month, commencing in July 1942 (Jt.App. 63); and that the absolute conveyance was made to Mrs. Wynne in payment of the debt, in accordance with Colonel Wynne's request, made prior to his departure for service overseas and for the purpose of protecting Mrs. Wynne (Jt.App. 63-64, 93-94). It also appears that two releases of the deed of trust were signed by the trustees, one on July 21, 1942 (Jt.App. 64-66, 149), and another on October 18, 1942; that the deed of trust and the absolute conveyance were both promptly recorded (Jt.App. 147-49), but the releases of the deed of trust were never placed on record (Jt.App. 128-29, 149); that Boone continued to live in the premises with his household until 1948 (Jt. App. 34), paying the expenses of maintenance (Jt.App. 59, 95-97); and that during that time he was active in efforts to sell the property in the open market. (Jt. App. 34, 35, 122.) Explanations not without plausibility were offered by Wynne and Boone for the latter circumstances. (Jt. App. 35-38, 99.)

We also note that certain circumstances were left wholly or partly unexplained. For example, it was testified that the amounts allegedly loaned were transferred in cash from hand to hand (Jt.App. 52, 75-76, 85, 154A-3, Wynne's Exhibit No. 5), although the sums were large and the purpose of the alleged loans was said to be to finance litigation in which Boone was involved. (Jt.App. 84, 104, 113.) While checks were drawn on Wynne's bank account for these amounts, they were not deposited in Boone's account, though he had one. (Jt.App. 75.) Instead these checks were cashed by Wynne and Boone at the paying teller's window of Wynne's bank. (Jt.App. 52, 75-76, 85, 154A-3, Wynne's Exhibit No. 5.) Further, within two days after one of the alleged loans, that of June 29, 1942, for $1,500, Wynne deposited $1,500 in cash in his account (Jt. App. 150A-4, 107-09). Wynne explained that he received this sum from the sale of household effects prior to his departure for overseas. (Jt.App. 109-10, 132-34.) This was corroborated in small part by other testimony. (Jt.App. 134-35, 37-39.) Wynne's description of the transactions, however, was vague, and the records introduced were scanty and self-serving. (Jt. App. 109-10, 132-34.) The trial judge need not have found the explanation offered a convincing one. The same may be said of the testimony regarding Boone's ownership of cars in 1941-1942; testimony which even if believed by the trier of facts was susceptible to the interpretation that Boone was concealing the ownership of the cars and Wynne was aware of it. (Jt. App. 50, 69-76, 79-80, 113-14, 117, 125-28, 154A-8, 154A-9, 154A-10.)

In short, after carefully reviewing the entire evidence before us, circumstantial though that evidence may be on the issue of fraud, we are not left with the firm and definite conviction of error of which the Supreme...