Breeden v. Smith

BARNARD, P. J.

This appeal involves the legal effect of a homestead and the subsequent levy of a writ of execution under unusual circumstances.

The defendant Robert Smith, aged 73, was building a house for himself. He employed Joseph Breeden, aged 63, to assist him. On February 15, 1951, Breeden fell from a plank and was injured. On April 9, 1951, Smith and his wife deeded the property on which the house was located to their son, Stanley Smith. The senior Smiths moved into the house about May 1, 1951, and have since resided there.

On August 22, 1951, Breeden and his wife brought this action. The first count of the complaint alleged a cause of action for damages, with a failure to carry compensation insurance or to secure permission to self-insure. The second count alleged that the levy of an attachment “will be made” upon this property, as permitted by section 3707 of the Labor Code; that the conveyance to the son was made with intent to defraud creditors; and that the son received and accepted that deed with knowledge of this intent, and with the intent “to hold said land as a secret trust for Robert Smith.” The prayer was for damages, to have the deed set aside, and that this land be adjudged subject to the lien of the attachment,.

On October 22, 1951, Robert Smith filed a declaration of homestead covering this property. On October 24, 1951, he filed an answer denying all material allegations of both counts of the complaint, and alleging contributory negligence. On November 27, 1951, the Industrial Accident Commission entered an award in favor of Breeden and against Robert Smith.

This action was tried on July 23, 1952, without a jury. In its findings, filed on August 12, 1952, the court found that at the time of the injury Breeden was employed by the defendants; that on April 9, 1951, Robert Smith conveyed all his right, title and interest in this property to Stanley Smith without consideration and with intent to defraud his creditors; that the property was then worth $8,000; that Stanley Smith

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accepted and received this deed with the intent to hold the property “as a secret trust for said Robert Smith”; “that since said conveyance the title to the above described real property has remained in the name of” Stanley Smith; that despite such conveyance Robert Smith and his wife remained in exclusive possession of said property until January 1, 1952, when Stanley Smith and his wife moved in and shared such possession; that on November 29, 1951, the Industrial Accident Commission entered an award in favor of Breeden and against Robert Smith; and that ever since said conveyance Robert Smith has been unable to pay this award. As conclusions of law, it was found that on February 15, 1951, Breeden became a creditor of the senior Smiths; that said conveyance was fraudulent as to creditors, and the senior Smiths became insolvent by reason thereof; and that the plaintiffs were entitled to a judgment decreeing that this conveyance was fraudulent as to Breeden, and should be set aside and annulled “insofar as it affects the rights of” Breeden. Judgment was entered on August 12, 1952, adjudging solely that this conveyance was fraudulent as to Breeden, and “hereby is set aside and annulled insofar as it affects the rights of the plaintiff Joseph W. Breeden.” No appeal was taken from that judgment.