Tainter v. Broderick Land & Investment Co. (1918) · DecisionDepot

Tainter v. Broderick Land & Investment Co.

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Mar 4, 1918 No. S. F. No. 7907.Published

Before: Shaw

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Holding. The court held that the complaint failed to state a cause of action because the plaintiff was not an existing creditor at the time of the transfer and the facts alleged did not establish the existence of a resulting or involuntary trust.

Issues

Whether a transfer of property without consideration is fraudulent as to a subsequent creditor under Section 3442 of the Civil Code.
Whether the facts alleged in the complaint are sufficient to establish a resulting trust or a trust created by operation of law.

Disposition. affirmed

Quotations verified verbatim against the opinion

“As the plaintiff was not an existing creditor of Dudley at the time of this transfer, and as there is no allegation that at the time of said transfer Dudley was either insolvent or in contemplation of insolvency, this provision has no application”

“A conveyance without consideration creates no trust in favor of the grantor.”

Synopsis

The facts are stated in the opinion of the court.

[666]

SHAW, J.

The demurrer to the complaint was properly sustained. The object of the action was to subject to the payment of the plaintiff’s judgment certain real estate standing in the name of the defendant corporation.

The complaint alleges that on June 10, 1908, Dudley was the owner of the property; that Dudley, Upham, and Meigs agreed to organize a corporation for the purpose of saving said property from Dudley’s creditors, and providing that Dudley should remain in possession thereof, and that the title should be transferred to the proposed corporation without consideration, and for the purpose of defrauding Dudley’s creditors; that in pursuance of said agreement said defendants caused the defendant corporation to be incorporated, and on July 13, 1908, caused Dudley to convey said property to said corporation “without consideration, and for the purpose of changing the legal title only”; that Dudley continued in possession of the land thereafter and used, and still uses it as his own, and that said corporation holds the legal title thereto for and on behalf “of its true owner, said E. C. Dudley”; that but for said “resulting trust in his favor, and said ownership of said property, said defendant, E. C. Dudley

wholly insolvent.” It further alleges the recovery of a judgment by Tainter against Dudley on October 8, 1914, and that the same was given upon a demand for money advanced after the conveyance to said defendant corporation by Dudley, and that said judgment is wholly unpaid. Execution had been issued thereon and returned wholly unsatisfied.

Section 3442 of the Civil Code provides that a transfer of property without valuable consideration “by a party while insolvent or in contemplation of insolvency, shall be fraudulent, and void as to existing creditors. ’ ’ As the plaintiff was not an existing creditor of Dudley at the time of this transfer, and as there is no allegation that at the time of said transfer Dudley was either insolvent or in contemplation of insolvency, this provision has no application to this case.

(Atkinson

Western D. Syndicate,

Tainter v. Broderick Land & Investment Co.

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Synopsis

SHAW, J.

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