Hemenway v. Thaxter (1907) · DecisionDepot

Hemenway v. Thaxter

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

California Supreme Court Apr 2, 1907 No. L.A. No. 1658.Published

Before: THE COURT.

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Holding. The court held that a voluntary conveyance made with the intent to defraud existing creditors is void and may be attacked by subsequent creditors, as such intent serves as prima facie evidence of fraud against them.

Issues

Whether a voluntary conveyance made while insolvent is fraudulent and void as to existing creditors.
Whether a subsequent creditor may successfully attack a conveyance made with the intent to defraud existing creditors.

Disposition. affirmed

Quotations verified verbatim against the opinion

“any transfer . . . made or given voluntarily, or without valuable consideration, by a party while insolvent or in contemplation of insolvency, shall be fraudulent, and void as to existing creditors.”

“evidence of an intent to defraud existing creditors is deemed sufficient prima facie evidence of fraud against subsequent creditors”

Synopsis

The facts are stated in the opinion of the court.

THE COURT.

This cause was certified to this court upon the disagreement of the justices of the district court of appeal of the second district. While the action was pending before

[738]

that court the following opinion was prepared by Allen, J., and that opinion is hereby adopted as the opinion of this court:—

“Action by plaintiff to enjoin the defendants from selling under execution certain real property. Findings and judgment for the defendants; a new trial denied, and from the judgment and order denying a new trial plaintiff appeals.

“Plaintiff in her complaint alleges ownership' as her separate estate of a tract of land in San Bernardino County, which defendants were threatening to sell under execution to satisfy a judgment against her husband.

“The material facts involved in this appeal may be summarized as follows: Mrs. Alvira Brown, the mother of the plaintiff, loaned to the plaintiff’s husband, about the year 1865, the sum of three thousand dollars, for which plaintiff’s husband executed his note. A portion of this money was invested in real property in Illinois, which was sold and five thousand dollars realized by plaintiff’s husband therefrom. This money was reinvested by the husband in certain real property in San Bernardino County, the subject of this action, in the name of the plaintiff’s husband, who, with plaintiff, his wife, on January 1, 1898, signed a conveyance of such property to Alvira Brown, plaintiff’s mother. At the time this deed was signed Mrs. Brown was absent from California and knew nothing about its execution; although previously it had been agreed between plaintiff, her husband, and Mrs. Brown that the property should be conveyed to Mrs. Brown, who was to fix the property in plaintiff’s hands so there should be no trouble if anything should happen suddenly to the husband. Afterwards, on June 28, 1898, Hemenway and his wife acknowledged this deed, so as to entitle the same to record, and the same was placed by Hemenway on record June 29, 1898. At the time these last two conveyances were delivered, Mr. Hemenway owed one Simon-sen about sixteen hundred dollars. Simonsen brought two suits against Hemenway to recover this indebtedness, in one of which actions an attachment was issued, and on June 24, 1898, the same was levied upon the property involved in this action; in the other, which involved the six hundred dollars indebtedness, no attachment was issued. Judgments in these actions were subsequently rendered, one for one

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“As to the voluntary character of the conveyances, there was much conflict between the testimony and the circumstances connected with the transaction, and an examination of the record indicates to us that the finding of the court that the conveyances were voluntary should not be disturbed. A trial court may very properly determine that direct evidence is successfully rebutted by circumstances and conduct of parties inconsistent with such direct evidence. There' is much in the record indicating that the claimed indebtedness of Hemenway to Mrs. Brown was a pretense only, and that the true intent of the parties by the conveyance was to vest the title in plaintiff without valuable consideration being paid therefor. There is, in fact, much in the direct testimony of Hemenway indicating this fact. He testifies that it was agreed between himself and Mrs. Brown that the property should go to the plaintiff. He further testifies that he does not know how long Mrs. Brown kept the note for three thousand dollars originally executed by him to her, and does not know whether it was taken up and destroyed in five, twenty-five, or thirty years; that he executed to Mrs. Brown many notes for other loans and- had various settlements; and his only statement connecting the note with the conveyance to Mrs. Brown is that a note was surrendered by Mrs. Brown when the deed was executed; but what note it was, for what amount, and whether it was then a subsisting obligation or not, is not disclosed. That the conveyance, if voluntary, was in fraud of Simonsen scarcely requires argument. Section 3442 of the Civil Code provides that ‘any transfer . . . made or given voluntarily, or without valuable consideration, by a party while insolvent or in contemplation of insolvency, shall be fraudulent, and void as to existing creditors. ’ Hemenway admits that by this conveyance he divested himself of all property liable to execution; that he became thereby, and has ever since remained, insolvent. The consequence of this conveyance being, then, to render Hemenway insolvent, he will be presumed to have intended its natural consequence,

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Synopsis

THE COURT.

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