275 N.W. 318 | Neb. | 1937
This is an action in the nature of a creditor’s bill. The plaintiff seeks to set aside a conveyance made by Herman Nachschoen to his wife Anna. The decree of the district court for Douglas county set aside such conveyance as fraudulent. Defendants appealed, and this court, in an opinion reported in 132 Neb. 514, 272 N. W. 326, held that the defendants were entitled to file an amended answer. All parties asked a rehearing, which was granted. By agreement of the parties hereto in their motions for rehearing, the amended answer of the defendants is to be considered as filed. The cause was argued and submitted, and is now tried in this court de novo.
Plaintiff’s petition alleges the plaintiff obtained a deficiency judgment against the defendant Herman Nachschoen and others in the amount of $18,843.07, on June 28, 1934; that Herman Nachschoen voluntarily transferred by warranty deed for a consideration of one dollar, love and affection, to Joseph Bohan, the south 48 feet of lot 4, block 44, Omaha, Nebraska, which was transferred by
Defendants’ amended answer admits the obtaining of the deficiency judgment by plaintiff; that execution was returned wholly unsatisfied; and alleges that defendant Anna Nachschoen was and is the owner of the real estate described in plaintiff’s petition; that the deed conveying said real estate to Bohan was signed by Herman Nachschoen simply as the husband of Anna Nachschoen, and was given by Anna as security for a 1,000-dollar loan, made by John Bohan to Anna, which debt has been paid and re-conveyance of the real estate had to Anna Nachschoen; that the conveyance of July 24, 1923, from Herman Nachschoen to Anna, his wife, was made ten years before the commencement of this action and more than ten years before recovery of plaintiff’s judgment; that plaintiff knew of said conveyance at the time the same was made; and pleads the statute of limitations. Plaintiff’s reply alleges the indebtedness of Herman Nachschoen to plaintiff as of June 1, 1922, and that the transfer of the real estate in question from Herman Nachschoen to his wife Anna was without consideration.
The principal facts are as follows: Robert Butke, the plaintiff, a contractor, contracted with defendant Herman Nachschoen to build a garage at Seventeenth ‘ and Cass streets, in Omaha, Nebraska, for the amount of $18,500, which contract was dated May 22, 1922. Three thousand dollars was paid by Herman Nachschoen, as provided by the contract; $12,000 was not paid, as provided by the contract, Nachschoen having failed to secure a loan which he had anticipated. Butke then took a first mortgage on the property for $12,000 and a second mortgage for $3,500, dated July 1, 1922. In the spring of 1923, Butke entered into another contract with Nachschoen, which resulted in the purchase of a lot for $9,000 by Butke and a transfer
On July 24, 1923, Herman Nachschoen transferred real estate, known as the Herman Apartments; that is, the south 48 feet of lot 4, block 44, in Omaha, to his wife Anna, the consideration recited in the deed being one dollar, love and affection. Nachschoen testified that at the time of the conveyance he had a credit rating of $50,000; had paid $7,500 for the lot upon which the original garage was erected, and had paid $3,000 on the contract when the garage was being built; and had no existing debts; that the mortgage on the garage was foreclosed, and a deficiency judgment, in the sum of $18,843.07, was obtained on June 28, 1934. Anna Nachschoen testified that she withdrew from the Omaha Loan & Building Association $4,000 and took $1,000 from her safe deposit box. Her pass-book shows a withdrawal of $4,021.45 as of date July 24, 1923, the date of the conveyance of the real estate by her husband to her; that Butke was present when she made the withdrawal, and that her husband paid the money to Butke in the purchase of the 9,000-dollar lot. At the same time she contracted with Butke to build some porches on the property, just conveyed to her by her husband, in the amount of $500. Her husband told substantially the same story, stating that $500 of the $5,000 was paid on the porches, and that the deed was made from him to his wife for the amount of money advanced to him; that he gave a check for $3,000 on July 30, and that $1,000 was kept out, as security for the building, by the architect Guth. This testimony is corroborated by exhibit 28, in a statement of account rendered by Butke on January 6, 1924, in which appears the following: “The one thousand dollars you agreed to pay December 4, 1923, are now due according to the referee.” Butke’s bank book from the First Na
Appellee contends that the plaintiff was an existing creditor of the judgment debtor at the time of the conveyance from Naehschoen to his wife Anna; that the burden of proof is on the defendants to show by a preponderance of the evidence that the transfer was in good faith and for a valuable consideration, and that defendants have failed in their proof. Appellee cites Omaha Brewing Ass’n v. Zeller, 4 Neb. (Unof.) 198, 93 N. W. 762, wherein it was held: “An indebtedness on notes, which is by express agreement incorporated, with other indebtedness, into other notes, and finally merged into a judgment on the last note, will be held to have existed from the inception of the first, note, although open accounts have been made and settled in much larger amounts in the meantime,”— indicating that plaintiff was an existing creditor of defendant Naehschoen on July 1, 1922, more than a year before the conveyance in question was made; that the conveyance from Naehschoen to his wife was presumptively fraudulent, and the burden of proof was on the defendants to establish good faith by a preponderance of the evidence, and citing Christensen v. Smith, 123 Neb. 388, 243 N. W. 118, and other cases. The principal contention of the appellants is to the effect that the evidence is sufficient to sustain the transfer by Naehschoen to his wife Anna on the basis of an adequate consideration.
We believe, after a careful reading of the record and considering the documentary evidence introduced in this case, that at the time of the transfer of the real estate in question by Naehschoen to his wife he was solvent, had no existing debts, and, in fact, had a credit rating, according to his own testimony, in the sum of $50,000. The mortgage on the garage was not excessive, and when the
In 27 C. J. 415, fraudulent conveyance is defined as follows : “A conveyance is declared to be fraudulent when its object or effect is to defraud another, or the intent with which it is made is to avoid some duty or debt due by or incumbent upon the party making the transfer.”
The burden of proof in this case, as established by the law of Nebraska, is on the defendants below. Lincoln Trust Co. v. Sweeney, 124 Neb. 686, 248 N. W. 67; Christensen v. Smith, supra. And if the evidence discloses that the conveyance was made in good faith for an adequate considera^ tion then such conveyance may be sustained.
. In Farrington v. Stone, 35 Neb. 456, 53 N. W. 389, it was Held: “While a transfer of property to a relative by a person liable on a claim, where the effect will be to defeat the payment of the same, will be scrutinized very closely, yet it will be sustained, if made in good faith for an adequate consideration.”
In Blair State Bank v. Bunn, 61 Neb. 464, 85 N. W. 527, it was held: “A transfer of property by a debtor to á relative, which has the effect of hindering or delaying other creditors in the collection of their debts, will be scrutinized very closely; yet it will be sustained if made in good faith and for an adequate consideration.”
“The question of fraudulent intent is to be considered as of the time when the conveyance is made, and with reference to the particular conveyance alleged to have be'en fraudulent as against creditors.” Tanner v. Frink, 103 Neb. 817, 174 N. W. 417.
The defendants have proved the bona fides of the conveyance, and the judgment of the district court is reversed and the action dismissed.
Reversed and dismissed.