Busick v. Mandeville

PEEK, J.

This is an action by the plaintiff trustee in bankruptcy to set aside two conveyances of the same parcel of real property, the first by defendants Fred and Velma Mandeville, husband and wife, to defendant Tony Rava, and the second, alleged to be a part of the same transaction, from Tony and Birdie Rava, husband and wife, to the defendant and appellant Lloyd on the grounds that both transfers were without consideration and made with the intent to hinder, delay and defraud the creditors of the Mandevilles. From the judgment in favor of the plaintiff on all the material issues the defendant Lloyd has appealed.

The evidence introduced at the trial established the following facts as found by the court. The transfer of the property from the Mandevilles to Tony Rava was without actual intent to defraud creditors although it rendered the Mandevilles insolvent and was made without consideration. Rava, who received the property merely as trustee for the benefit of the defendant Lloyd then, together with his wife, transferred it without consideration to the said Lloyd pursuant to an agreement with the Mandevilles. Prior to these transfers the defendant Lloyd had advanced to the Mandevilles the sum of $6,346.73 for the purpose of improving the property, relying upon their legal right to transfer to her a valid title to the premises. The court found that this sum was disproportionately small as compared with the true value of the property as the time of the conveyance which it found tó be $10,250, that it was less than a fair consideration and that

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therefore the transfer was a constructive fraud upon the Mandeville creditors. The defendant Lloyd was adjudged to be entitled to a preferred lien against the premises for the amount of the money so advanced, and for the repayment of which the conveyance was made as security. In lieu of voiding the deeds the court found as a conclusion of law that the defendant Lloyd should deposit in court within 15 days the sum of $1,600, being the amount of creditors’ claims, and in the event such deposit were not made the property to be available to plaintiff for the satisfaction of creditors’ claims upon the payment to defendant of the sum of $6,346.73, thereby extinguishing her lien upon and title to the property. Judgment was entered accordingly.

Appellant now contends: 1. That in the absence of actual fraud, and having purchased the property in good faith for a fair consideration she thereby became the owner thereof to the exclusion of the creditors of the Mandevilles, and 2, that plaintiff’s acquiescence in the transfer of the property for a period of 22 months constituted laches.