Stockwell v. McAlvay

NOURSE, J., pro tem. Defendants have appealed from a judgment in favor of plaintiffs setting aside a sheriff’s sale of shares of Consumers Salt Company.

Plaintiffs V. E. Stockwell and B. C. Stockwell are husband and wife. Defendants Irwin and Rose are attorneys for defendant McAlvay. On June 18, 1925, McAlvay obtained a judgment, hereinafter referred to as the fraud judgment, against V. E. Stockwell in the sum of $16,000 based upon the fraud of the latter in the sale of real estate to Mc-Alvay. Prior to the entry of this judgment, but subsequent to the accrual of the cause of action therein and after a threat of suit had been made, Y. E. Stockwell conveyed his resi[371]dence property to his wife, B. C. Stockwell, by deed of gift. In a separate action, a judgment was rendered on April 13, 1926, in which it was determined that this deed was “executed by said V. B. Stockwell with intent to delay and defraud his said creditor, said B. G. McAlvay’’. It was further determined that the title to the property was vested in the trustee in bankruptcy of V. B. Stockwell. Execution was issued on the fraud judgment, and on October 1, 1925, the sheriff levied upon 225,000 shares of stock of Consumers Salt Company, shown by the records of the company to be in the name of B. C. Stockwell. Consumers Salt Company made and delivered to the sheriff an answer in writing, signed by V. E. Stockwell as president and J. R. Riggins as secretary, to the effect that V. E. Stockwell did not own any interest in the shares so levied upon. The trial court found that on July 9, 1925, the shares were the property of V. E. Stock-well and that on that date he caused them to be transferred to B. C. Stockwell. The shares were sold by the sheriff to McAlvay on November 17, 1925, for the sum of $50.

No charge is made that the sale was not made in accordance with law. Between the date of the levy and the date of the sale, certain negotiations occurred between Attorney Rose for McAlvay and Attorney Newby for V. E. Stockwell. On October 22, 1925, V. E. Stockwell verified a petition to be filed in bankruptcy proceedings and appended thereto a list of his property, except the residence property and the 225,-000 shares levied upon. This petition was exhibited b3 Newby to Rose on October 28, 1925, with the assertion that V. E. Stockwell had stated that the list included all his property. Rose was informed that V. E. Stockwell did not wish to commence bankruptcy proceedings, but would do so unless the property listed was accepted by McAlvay in satisfaction of his judgment. Rose undertook to investigate the property listed and being satisfied that said property was of no value, ordered the sale to proceed. The day after the sale, the petition in bankruptcy was filed. On November 19, 1925, V. E. Stockwell was adjudged bankrupt, and on December 17, 1925, a trustee was appointed.