Wetherly v. Straus (1892) · DecisionDepot

Wetherly v. Straus

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

California Supreme Court Feb 6, 1892 No. No. 13712Published

Before: Harrison

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Holding. A bailee cannot justify a refusal to return property to a bailor based on a claim of fraudulent transfer to the bailor unless such fraud is affirmatively pleaded, nor can a bailee assert a third-party interest without proper authority and notice.

Issues

Whether a defendant may assert a defense of fraudulent transfer without pleading it in the answer.
Whether a bailee may withhold property from a bailor based on a garnishment without providing the required notice.
Whether a bailee may assert a third-party interest in the bailed property without authorization from that third party.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Fraud is never to be presumed, and whenever it constitutes an element of a cause of action or of a defense which is of an affirmative nature, and invoked as conferring a right against the plaintiff, it must be alleged.”

“A bailee can assert a jus tertii in an action by the bailor only when he defends on such title, and by the authority of such third person.”

Synopsis

Appeal from a judgment of the Superior Court of the eity and county of San Francisco, and from an order denying a new trial.

The facts are stated in the opinion of the court.

Harrison, J. The plaintiff deposited with the defendant, on the 3d of September, 1888, for safe-keeping, a certificate of deposit that had been issued to her own order. On the next day, an action was commenced by one Haviland, representing certain assigned claims (one of which was assigned by the defendant) against the firm of Bannister & Wetherly, and under a writ of attachment issued in said action a garnishment was served [285]upon the defendant against the certificate of deposit that had been left with him by the plaintiff. The defendant gave no notice to the plaintiff of these proceedings until after she had demanded the certificate on the 14th of September, when he told her that it had been attached, and that he could not give it to her. Thereupon she brought this action for damages sustained by his conduct. The defendant, in his answer, alleged that the money represented by the certificate was the property of the plaintiff's husband, defendant in the above suit, and that the deposit was made and the certificate issued to her only as the agent and trustee of her husband, and that after it had been deposited with him the garnishment above named had been served upon him, and that he.had ever since the 4th of September held the certificate under and pursuant to said writ of attachment and garnishment.

At the trial, the plaintiff testified that the money represented by the certificate was a portion of the proceeds derived from the sale of the homestead of herself and her husband at Winnemucca, which she had negotiated and conveyed upon the consideration that she was to have the money for which it was sold with which to buy a less expensive home, and that after its sale her husband had given her the money, and that with it she had procured drafts upon San Francisco, for which the certificate of deposit was issued. The defendant offered evidence that the certificate had been attached as the property of the plaintiff's husband in the suit of Haviland against the firm of Bannister & Wetherly. The jury rendered a verdict in favor of the plaintiff, and from the judgment entered thereon, and an order denying a new trial, the defendant has appealed.

The claim on the part of the appellant, that the money represented by the certificate of deposit had been transferred to the plaintiff by her husband with intent to defraud his creditors, and being for that reason fraudulent and void, was subject to attachment at the instance of his creditors, cannot, under the issues presented by his [286]

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answer, be maintained. Such a claim concedes the validity and completeness of the transfer as between the parties, but seeks to set it aside in favor of creditors upon the ground that it was made with a fraudulent intent; and inasmuch as such fraudulent intent is “ one of fact, and not of law” (Civ. Code, sec. 3442), it is necessary for one who would avail himself of this fact to aver it in his pleading as one of the elements of his cause of action or defense. The appellant made no averment of this fact in his answer, but relied therein upon the ground that the money was at all times the property of the husband, and was never the separate property of the plaintiff, as she had alleged in her complaint, and that its deposit by her in the bank was “ as the agent ” of her husband, and that the certificate -of deposit was issued to her “ as the agent and trustee ” of her husband, and “ not otherwise.” Upon this issue there was evidence before the jury from which it could find that the money had been given to the plaintiff by her husband, and was her separate estate. If the appellant had intended to avoid such gift, he should have made proper averments therefor in his answer, in order that the plaintiff might meet them at the trial. Fraud is never to be presumed, and whenever it constitutes an element of a cause of action or of a defense which is of an affirmative nature, and invoked as conferring a right against the plaintiff, it must be alleged. The necessity of such averment in the] present case is apparent' from the facts shown at the trial. The homestead from which the money was derived was not subject to the claim of any creditor of the plaintiff’s husband, and a transfer of it by the husband to her could not, under any circumstances, be held as a matter of fact to be with the intent to defraud his creditors. His creditors could not, by any legal process, take the property covered by the homestead, and its voluntary transfer to the wife would not “ obstruct the enforcement by legal process of any right to take the property affected by the transfer ” (Civ. Code, sec. 3441), neither would such transfer of its proceeds.

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