Haskins v. Certified Escrow & Mortgage Co.

SHINN, P. J.

In October, 1944, Certified Escrow and Mortgage Company, a corporation, acquired title to Lot 1, Block E, of Tract 5956, as per map recorded in Book 83, page 55 of Maps, records of Los Angeles County. In August, 1945, Olivia N. Haskins brought suit against the corporation alleging that the property had been purchased with the funds of plaintiff and J. E. Haskins; that J. E. Haskins had assigned all his interest in the property to plaintiff, and seeking a decree impressing a trust upon the property in favor of the plaintiff. Certain other relief was sought against individual defendants who filed their answer. The corporation did not defend. In September, 1945, Edwin S. Conway brought suit against the corporation and on October 9, 1945, recovered a judgment in the amount of $2,368.61, upon which he collected, through execution sales, all but $850. On February 3, 1947, Conway purchased the real property at execution sale under his judgment, for the sum of $100, leaving a deficiency of $750. On July 14, 1947, the property was conveyed by the Escrow Company to Olivia N. Haskins. The action brought by Miss Haskins not having been tried, Conway filed a complaint in intervention in February, 1948. He alleged that he had an unsatisfied judgment against the corporation, that the corporation had conveyed the property to Olivia N. Haskins, with the purpose on the part of the grantor and grantee to hinder, delay and defraud creditors of the corporation, and that at the time of the conveyance the corporation was insolvent. It was not alleged that the conveyance was made without consideration. The answer of the corporation and others" to the complaint in intervention denied the charges of fraud, alleged that Conway had purchased the property at execution sale for $108, that Olivia N. Haskins had acquired from the corporation a right of redemption and had redeemed the property by the payment to Conway through the sheriff of $108 which Conway still retained. The court found that the

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corporation was insolvent when the deed was given, but also found that it was not made with intent to hinder, delay or defraud creditors of the corporation. There was no finding as to whether a fair or any consideration was paid for the deed. The judgment quieted title in Olivia N. Haskins against the claims of Conway. Conway appeals.

In his briefs appellant takes the position that it was shown by undisputed evidence that the deed was given without consideration and that the corporation was insolvent, and he contends that the conveyance was fraudulent under section 3439.04 of the Civil Code, without regard to the actual intent of the grantor. Under this section, the conveyance by an insolvent without a fair consideration is fraudulent as to creditors, even though there be no actual intent to defraud. Under section 3439.07, a conveyance made with actual intent to defraud creditors is fraudulent. Appellant charged actual fraud and not constructive fraud. There was no insufficiency of the evidence to support the finding that no actual fraud existed. Having pleaded and tried his case upon the theory of actual fraud, appellant cannot be heard to say now that he made out a case of constructive fraud. It was proved that the grantor’s board of directors authorized the conveyance of the property by resolution which recited that it had been purchased by the corporation with the funds of J. E. Haskins and Olivia N. Haskins, and that title was held for their use and benefit. This evidence was admissible upon the issue of actual fraud. Although J. E. Haskins testified that all the consideration had passed before the deed was given, he was not questioned as to the nature or value of the consideration. It can scarcely be doubted that the matter would have been gone into fully if appellant had pleaded that the deed was given without consideration. On the appeal he must be held to the theory upon which he relied in the trial court.