Wyoming Stockmen's Loan Co. v. Johnston

• Citation: 33 Wyo. 457,240 P. 449
• Decision Date: 10 November 1925
• Docket Number: 1242
• Parties: WYOMING STOCKMEN'S LOAN CO. v. JOHNSTON ET AL. [*]
• Court: United States State Supreme Court of Wyoming

240 P. 449

33 Wyo. 457

WYOMING STOCKMEN'S LOAN CO. v. JOHNSTON ET AL. ^[*]

No. 1242

Supreme Court of Wyoming

November 10, 1925

APPEAL from District Court, Sheridan County, JAMES H. BURGESS Judge.

Action by the Wyoming Stockmens Loan Company against Ada D. Johnston and Fred Durbin to set aside a conveyance of real estate by Ada D. Johnston to Fred Durbin on the ground of fraud, as against plaintiff, a judgment creditor of defendant Johnston. From judgment setting aside the conveyance and subjecting the real estate to sale in satisfaction of plaintiff's judgment, defendants appeal.

Affirmed.

R. G Diefenderfer and Don. L. Wakeman for appellants.

The trial court erred in reopening the trial over defendant's objection, several weeks after the cause had been tried and submitted and after a new term had intervened. No fraud was proven, 27 C. J. 820. The exhibition of a judgment did not prove the existence of indebtedness on date of conveyance, 27 C. J. 823; Boutwell vs. Spurlin Merc. Co., 203 Ala. 482; Durbin was not a party to plaintiff's judgment; Burns vs. Kunzman, 19 A. 667; the burden of proving lack of consideration was on plaintiff; Verner vs. Verner, 64 Miss. 184; plaintiff had not exhausted its legal remedies against defendant; petition was defective in not alleging that defendant Johnston was without other property; Bank vs. Judkins, (Ark.) 51 S.W. 632; Geiser vs. Lee (Ind.) 66 N.E. 701; Dreyfus vs. Childs, 19 So. 929; Randolph vs. Daly, 16 N. J. Eq. 313.

Lonabaugh and Lonabaugh for respondents.

There was no claim that Durbin was a purchaser for value. When the legal effect is to hinder or delay creditors, the intent to do so will be presumed; Kelly vs. Pollock, 131 Am. St. 1101; Spencer vs. Caverhill (Iowa) 133 N.W. 450; the burden was upon grantee if as a near relative; Flint vs. Chaloupka, 13 L. R. A. (N. S.) 309; 1 Story Eq. Juris, Section 497; numerous circumstances in this transaction indicate fraud; Bump on Fraudulent Con. 34-54; Sterling vs. Wagner, 4 Wyoming 5, 27 C. J. 148, 489-490; the burden of proof was on defendant; Bank vs. Swan, 3 Wyo. 356; insolvency and fraudulent intent were shown; 27 C. J. 501-504; there was no abuse of discretion in reopening the trial; 38 Cyc. 1361; Hart vs. Bowen, 86 F. 877; 38 Cyc. 1360; 272 F. 439; leave to introduce testimony after a motion for a directed verdict is discretionary; Kelley vs. Lumber Co., 43 P. 1004; San Pedro Lbr. Co. vs. Schroeter, 103 P. 888; appellant's brief admits the existence of indebtedness of plaintiff; 3 C. J. 1610; Clancy vs. Board, 79 P. 709; there was other proof of the indebtedness. Several executions were issued and returned nulla bona constituting prima facie evidence of no other property; 15 C. J. 1400; Jones on Evidence, 1411; no exceptions were taken or reserved to other alleged erroneous rulings; the petition was amendable, 5707 C. S.; Kuhn vs. McKay, 7 Wyo. 42; questions that might have been raised by demurrer in the trial court cannot be urged for the first time on appeal; Platte County State Bank vs. Frantz, Wyo. (Sept. 22, 1925.)

TIDBALL, District Judge. POTTER, Ch. J., and KIMBALL, J., concur. BLUME, J., did not sit.

OPINION

TIDBALL, District Judge.

This is an action in the nature of a creditor's bill to set aside a conveyance from defendant Ada D. Johnston to defendant Fred Durbin of real estate situated in Sheridan, Wyoming, as being a conveyance made in fraud of the plaintiff, who is a judgment creditor of defendant, Johnston. From a judgment setting aside the conveyance and subjecting the real estate to sale for the satisfaction of plaintiff's judgment, defendants have appealed.

In September, 1921, George W. Perry was the owner and holder of three promissory notes executed by defendant Ada D. Johnston and by her husband, L. F. Johnston, said notes aggregating a sum of $ 55,000 and being secured by a chattel mortgage on certain cattle and hay. On that date Perry sold, endorsed and delivered these notes and assigned said mortgage to plaintiff. In November, 1921, $ 10,000 was paid on said notes, leaving due thereon the sum of $ 45,000 and interest. In April, 1922, plaintiff began suit against the Johnstons and others upon said notes and to foreclose said mortgage, and on July 10th, 1922, obtained judgment against the Johnstons for $ 48,900 and costs and for the foreclosure of the chattel mortgage. After the sale of the mortgaged property and the application of the proceeds thereof to the payment of the judgment, there still remained due upon said judgment over $ 23,000.

At the time of the execution of the notes in question and continuously thereafter until May 19th, 1922 (after suit had been begun on said notes, but before judgment had been rendered thereon) Ada D. Johnston was the owner of lot 3, block 2, in Sheridan, Wyoming, said lot being worth about $ 10,000. On July 11th, 1922, an execution was duly issued out of the District Court upon plaintiff's judgment of July 10th, and a return was made thereon by the sheriff that no property of either defendant could be found. On October 9th, 1922, a second execution was issued and was returned with the statement that no property of defendant Ada D. Johnston could be found. Again, on April 30th, 1923, a third execution was issued and returned with the statement that no property of defendant L. F. Johnston could be found.

On May 19th, 1922, defendant Ada D. Johnston, by deed of warranty, conveyed lot 3, block 2, the property above mentioned, to Fred Durbin, co-defendant herein, who is a half-brother of Ada D. Johnston. The deed recited a consideration of $ 8,000, was executed at Sheridan on May 19th, 1922, the grantee being at the time in Malvern, Iowa, and was filed for record on the day of its execution. It was executed in the office of defendant Johnston's attorneys in this case, was taken to the court house for recording by a stenographer in said office, Mrs. Johnston paying the recording fee, and, after being recorded, was returned to Mrs. Johnston, the grantor, and she continued to occupy the premises until late in 1922, when she removed from the State of Wyoming.

In October, 1922, after an execution had been issued and returned, as above stated, proceedings were had in the District Court whereby, on October 13th, 1922, an order was issued out of that court directing defendant Ada D. Johnston to appear in said court on October 17th, 1922, then and there to answer under oath concerning all property owned by her in her name or held by others for her use and benefit. This order was served on defendant on October 14th. However, she failed to appear as ordered and thereupon a citation was issued commanding her to appear and show cause why she should not be punished for contempt in failing to obey the order of October 13th. This citation was never served on defendant, she having left the State of Wyoming before October 17th, the date she was directed to appear under the order of October 13th, and she never came back, and did not appear at the trial of the present case.

On October 13th, 1922, after two executions had been issued on the judgment of July 10th, 1922, and returned wholly unsatisfied, plaintiff began the present action against Ada D. Johnston and Fred Durbin to set aside the deed of May 19th, 1922, conveying Lot 3, Block 2, from Ada D. Johnston to Fred Durbin. The petition alleges the rendition of the judgment of July 10th, 1922, in the sum of $ 48,900 and costs against defendant Ada D. Johnston and L. F. Johnston; that after the sale of the property described in the mortgage securing the notes sued on, there remained due and unpaid upon said judgment about $ 25,000; that execution was issued and returned nulla bona as to property of defendant Ada D. Johnston; that the claim and cause of action upon which the judgment was obtained accrued, and the defendant Johnston became liable to plaintiff thereon, on September 29th, 1921; that at the time said cause of action accrued, and at the time action was commenced thereon, defendant Johnston was the owner of lot 3, block 2, and that said property was of the value of $ 10,000; that after said action was commenced, but before judgment was rendered thereon, defendant Johnston conveyed said property to Fred Durbin for a recited consideration of $ 8,000; that said conveyance was made without any consideration and with the intent on the part of both defendants to hinder, delay and defraud plaintiff in its claim against defendant Johnston; that defendant Ada D. Johnston is possessed of no other property so far as is known to plaintiff; and prays that said conveyance be set aside as fraudulent and void, and that the lot be sold as upon execution and the proceeds of the sale be applied upon the payment of plaintiff's judgment.

The defendant Ada D. Johnston answered plaintiff's petition, admitting the judgment of July 10th, 1922, the balance due thereon, the issuance of the summons and its return nulla bona, and that she was possessed of no other property than the lot conveyed; and alleged the sale was for a consideration of $ 8,000, but does not state whether the consideration was paid; and denies all other allegations of the petition. This answer is signed by and verified on information and belief by her attorney.

The defendant Fred Durbin answered, admitting the conveyance of the property to himself, and states that the deed "recited a consideration therefor in the sum of Eight Thousand and no/100 ($ 8,000.00) Dollars," and denies all other allegations of the petition. This answer is signed by defendant's attorney and is unverified.

The case was tried on May 12th, 1923, and was taken under advisement by the Court. As before stated, defendant Ada D Johnston did not appear at the trial as a witness in her own behalf,...