Atkinson v. Western Development Syndicate

SLOSS, J.

This is an action brought by the plaintiff as a judgment creditor of the defendant, The Gray Brothers Crushed Rock Company, to set aside transfers of property made by said judgment debtor to the other defendant corporations, to wit, Western Development Syndicate and Golden Gate Tile Company. The complaint was in several counts, and in it the plaintiff based his right to follow the property into the hands of the transferees upon the grounds: 1. That the Golden Gate Tile Company and the Western Development Syndicate were in fact “but continuations of the defendant The Gray Brothers Crushed Rock Company, doing business under different names”;

2.

That the conveyances complained of were made by The Gray Brothers Crushed Rock Company, with intent to delay and defraud the plaintiff and his assignor; and, 3. That said conveyances were made without a valuable consideration and while the grantor was insolvent or in contemplation of insolvency.

The court found that the transferees were not in fact a continuation or continuations of The Gray Brothers Crushed Rock Company; that the deeds complained of were not made without a valuable consideration or while the grantor was insolvent or in contemplation of insolvency, and that, they were not made with intent to delay or defraud the plaintiff or his assignor.

[506]

Judgment for the defendants followed. The plaintiff appeals from the judgment, claiming that the findings above outlined are not supported by the evidence.

While the facts shown by the record were such as to justify a grave suspicion of the validity of the transactions complained of, the showing made by the plaintiff did not establish a case that would justify this court in overthrowing the findings of the court below. In this class of cases, as in any other, the determination of questions of fact must rest with the trial court, and the findings of that court cannot be successfully assailed in the appellate court unless they be contrary to the undisputed evidence, read in the light of all legitimate interferences to be drawn from that evidence. Under section 3439 of the Civil Code, every transfer of property made “with intent to delay or defraud any creditor or other person of his demands’’ is void against all creditors of the debtor. In any attack made under this section, the fraudulent intent of the debtor is an essential part of the plaintiff’s case, and the question whether such intent has been established by the evidence is one of fact. Under section 3442 of the Civil Code, a “transfer or encumbrance of property made or given voluntarily, or without a valuable consideration, by a party while insolvent or in contemplation of insolvency, shall be fraudulent, and void as to existing creditors.’’ If these conditions, to wit, a grant made without consideration by a person insolvent or in contemplation of insolvency, are present, the intent of the grantor is immaterial and the transfer, regardless of the actual intent, is void as to creditors. The plaintiff in his complaint sought to make out a case under both sections. A very brief summary of the facts shown will suffice to illustrate our views regarding the sufficiency of the evidence. On November 5, 1909, The Gray Brothers Crushed Rock Company made and delivered to Baker and Hamilton, the plaintiff’s assignor, eight promissory notes, aggregating some five thousand seven hundred dollars, said notes being given for a consideration, which, in part, had its origin as early as October 6, 1909. The notes were subsequently assigned to the plaintiff, who recovered a judgment on them against The Gray Brothers Crushed Rock Company for $6499.09. Execution on said judgment was returned unsatisfied. The Gray Brothers Crushed Rock Company had been in existence for a number of years. The Golden Gate Tile Company was organized