55 W. Va. 490 | W. Va. | 1904
Victor D. Miller obtained this appeal from a decree of the • circuit court of Berkeley county, declaring a certain deed, ex- ■ ecutcd by Chas. S. Lamon and wife, and purporting to convey to him a tract of land containing 210 acres, 2 rods and 19 poles in consideration of $5,262.50, to have been made with intent to hinder, delay and' defraud the creditors of the said Chas. S. Lamon and setting the same aside as to the debt due the plain- • tiffs, Win. B. Colston and Geo. M. Bowers, administrators of Robert Lamon, deceased.
This debt originated in the following manner: John W Lamon, on the 13th day of May, 1893, made his negotiable promissory note for the sum of $4,000.00 to become due and payable four months after its date, which was endorsed, first, 'by said Chas. S. Lamon, secondly, by said Robert Lamon, thirdly, by G. M. Lamon, and then delivered for value to the National Bank of Martinsburg. At that time, said John W. Lamon must have been in failing circumstances, as he after-wards made an assignment for the benefit of creditors, and •only a small portion of the debt was afterwards collected out of 'his estate, and the balance was paid out of the estate of Robert Lamon. Chas. S Lamon was then the owner of said farm which was -worth not less than $5,000.00 and personal estate consisting of live stock, farming implements, choses in action .•and other property worth about $4,000.00. By deed dated May 22, 1894, he conveyed the farm as aforesaid to the appellant, his wife’s brother, and assigned to him at about the same time two notes calling for considerable sums of money. On or about ■the date of the conveyance of the farm, he placed his personal property in the hands of his wife, executing to her a bill of sale thereof, and she converted-the same to her use.
Out of the estate of Robert Lamon, there was collected on said debt by legal process, $1,349.21 February 3, 1898, $632.26, .January 30, 1899, and $679.97, May 4, 1899, and thereupon the administrators of the estate of said Robert Lamon brought this suit for the purpose aforesaid, he having been the second .and Chas. S Lamon the first, endorser on the note, in consequence of which said Chas. S. Lamon was liable to him for •.the amount so paid. Proceedings were then had which re-
Tbe court is said to baye erred in overruling tbe demurrer to* tbe original bill. ' Tbis is no doubt true, as it failed to aver any notice to tbe defendant Miller of tbe fraudulent intent charged upon bis grantor, or participation therein on bis part. But the plaintiffs, perceiving this error, cured it by filing an amended bill in which tbe necessary allegations omitted from tbe original are fully supplied. Tbe only effect of sustaining tbe demurrer would have been to cause an amendment of tbe bill to be made. Tbe voluntary amendment is certainly as effective as a compulsory one would have been. Hence, the error is clearly harmless. Nor should the"demurrer have been sustained on tbe ground of laches, as tbe suit was instituted immediately after tbe making of tbe final payment of tbe debt, until which time no cause of action as to it arose. As tbe cause of invalidity, if any, is fraud and not mere want of consideration, the statute of limitation does not apply, and tbe bill does not disclose such lack of diligence as will bar. If tbe charge of fraud is sustained, tbe defendant cannot well say be has been misled or prejudiced by slight delay on tbe part of tbe man upon whom be perpetrated tbe fraud, and tbe rights of no third party have intervened.
Tbe record abounds with both circumstantial and direct positive evidence of fraudulent intent on tbe part of the grantor' Chas. S. Lamon. Declarations of his intent and purpose to convey tbe farm to tbe defendant Miller to escape the payment of said note, are testified to by witnesses, and his subsequent conduct and declarations are tantamount to admissions. Had exceptions to these declarations been taken and tbe benefit thereof saved, some of them were not admissible against tbe defendant Miller, because not made in bis presence. Robinson v. Pitzer, 3 W. Va. 335; Houston v. McCluney, 8 W. Va. 135 ; Crothers v. Crothers, 40 W. Va. 169. But tbe orders entered in the cause do not show that any objection was made or exception taken at tbe hearing, and tbe rule is that except in tbe case of inadmissibility because of incompetence of tbe witness, objections of this kind, not made in tbe court below, are deemed to have been waived and will not be entertained on appeal. Miller v. Gillispie, decided at tbe last term; Vanscoy v. Stinchcomb, 29 W. Va. 271; Hill v. Proctor, 10 W. Va. 78. IIow-
Miller sets up in his respective answers to the original and ■.amended bills, and proves by the depositions of himself and 'his attorney Col. Buchanan Schley, of Hagerstown, Md., as well as by the checks themselves, that, on the 16th day of June, 1894,-he gave Chas. S. Lemon his three checks for sums aggregating $4,600.00 all of which were passed through the banks as •paid. Two of them were drawn on the Hagerstown Bank, one for $3,000.00 and the other for $600.00 and Mr. Schley testifies to having gone with Lamon to that bank for the purpose of identifying him, and seen the money for which they called actu.•ally paid to Lamon The other was for $1,000.00, dated June 16, 1894, drawn on the Second National Bank of Hagerstown, •endorsed by Chas. S. Lamon,-and stamped as having been paid .June 19, 1894, but credited in the bank book as of the 16th. Miller and Schley say a medical account of $235.00 due from Lamon to the former who is a physician and had been treating Lamon, was credited on the purchase money. As to the resi■due of $427.50, the two witnesses to the consummation of the •alleged sale differ in their testimony. Miller says in his answer, .and also testifies, that he paid the balance in cash, part of it on the same day, and the balance $250.00, at Lamon’s home sometime afterwards, in the presence of Charles Stuckey, whom he ■admits he had called as a witness to the transaction. Colonel 'Schley says that no money was paid in his office and that the •difference between the aggregate of the checks and medical account and the total amount of purchase money is represented by ■an indebtedness due from Lamon to Miller which was deducted by him with the medical account to ascertain the amount for which the checks were drawn. His testimony is as follows: “I put down at his suggestion what the farm came to per
That said sum of $4,600.00 was paid by Miller to Lamon as aforesaid admits of no doubt, but neither this fact nor the payment of the whole amount of purchase money, if established, will sustain the transaction if the grantee participated in the fraudulent intent of the grantor in disposing of the property. Payment of the purchase money alone is not enough. The transaction must have been free from fraud on the part of the grantee. There is but little evidence other than that which is circumstantial, tending to show a fraudulent .purpose on the part of Miller, and that is in the nature of an admission made some time after the purchase. William Barber who had worked for Lamon as a farm laborer before and after the conveyance and also for Mrs. Lamon after the death of her husband, testifies to a conversation which he says occurred between Dr. Miller and his sister, Mrs. Lamon, in the fall of 1895. His language is: “I heard Mrs. Lamon say it was soon time for her to have possession of the money or of the place. He said the place was his and the money, too, but he reckoned he would have to leave her have the place some time, but they had better leave well enough alone for the present. He said that things were very quiet now, but they didn’t know what might turn up.” This is denied by Miller emphatically, but, if the sale was a fraudulent one, it represents the possible and probable status of the property. It would have been an easy matter for Lamon to have handed the money back to Miller to hold upon a secret trust for the benefit of his wife, Miller’s own sister, and not at all inconsistent with tire fact of actual payment'of the money, but clearly inconsistent with an honest purchase of the farm. The same witness says Lamon told him in the spring of 1894 that he had sold the place, and his brother-in-law, Mr. Miller, had the money in government bonds and that he had three lawyers employed, and that they couldn’t touch either the
The circumstance of relationship of the parties already adverted to, although not sufficient to raise a presumption of fraud as in the case of a conveyance by a husband to his wife, puts upon the purchaser the necessity of producing evidence of his good faith and so explaining the facts and circumstances connected with the transaction as to make it withstand a closer and more-rigid scrutiny on the part of the court than is exercised when the transaction is between strangers. When relationship of the-parties to the conveyance exists, circumstances, known in the law of fraudulent conveyances, as badges of fraud, have greater-weight than in other cases, for the law cannot overlook and disregard, upon an inquiry as to the good faith of the parties,, the natural desire of a brother to protect, defend and shield a sister or other close relative when pursued by creditors. Ballard v. Chewning, 49 W. Va. 508; Bank v. Gould, 48 W. Va. 99; Burt v. Timmons, 29 W. Va. 441; Bartlett v. Cleavenger, 35 W. Va. 718; Greer v. Mitchell, 42 W. Va. 499; Hutchin
The difficulty of direct proof of fraud lies in its very nature. A fraudulent transaction is always secret and bidden as far as it is possible for the parties to it to conceal it from those upon whom it is intended to work wrong and injustice. Hence, the necessity of resorting to circumstantial evidence for proof of it. Such evidence, the courts declare; is not only sufficient to establish the fraudulent character of a conveyance, but is often the only kind of evidence it is possible to procure. Thus, in Lockhard v. Beckley, 10 W. Va. 87, it is held that: “Although fraud in fact must be shown to impeach a conveyance as to subsequent creditors, it is not required that the actual or express fraudulent intent appear by direct and positive proof; circumstantial evidence is not only sufficient, but in most cases is the only evidence that can be adduced. Fraud is to be legally inferred from the facts and circumstances of the case, when those facts and circumstances are of such a character as to lead a reasonable man to the conclusion that the conveyance was made with the intent to hinder, delay or defraud existing or future creditors.” To the same effect see Stauffer v. Kennedy, 47 W. Va. 714; Richardson v. Ralphsnyder, 40 W. Va. 15; Sturm v. Chalfant, 38 W. Va. 248; Reynolds v. Gawthrop, 37 W. Va. 3; Bartlett v. Cleavenger, 35 W. Va. 719; Goshorn v. Snodgrass, 17 W. Va. 717; Hunter v Hunter, 10 W. Va. 321.
Some of the circumstances tending to establish fraud are so frequently found in the investigation of these cases and given so much weight by the courts that they have been designated as badges of fraud One of them is the retention of possession of the property by the grantor after the conveyance. Livesay v. Beard, 22 W. Va. 585; Hutchinson v. Boltz, 35 W. Va. 754; Blackshire v. Pettit, 35 W Va. 547. It is one of the circumstances characterizing the transaction now under consideration. The grantor remained in possession until the time of his death, and his widow, who has since married, still resides upon, and cultivates, the farm. Its effect is to cast upon the parties the burden of clearly showing that it is not in fact inconsistent with the conveyance as it appears to be. This may be done by proving that the grantor remains in possession under a contract for the use of the land and accounts for the rental thereof.
If Miller participated in Lamon’s fraudulent design, it is apparent that the wife, his sister, was to profit by it, and that the secret trust, if any, was for the benefit of both husband and wife. If there was a conspiracy against her husband’s creditors, she was undoubtedly an active party to it, for she took all the tangible personal property under a flimsy claim of indebtedness to 'her for money loaned and property brought on the farm by her and mingled with his at the time of their marriage, and Colonel Schley seems to be quite positive she was with her husband at his office on some occasion, when the fraudulent negotiations were in progress, though he is not certain it was on the day of the payment of the purchase money. This being true, the subsequent fraudulent transactions between her and Miller, and her husband and Miller, concerning the wheat crop, and Lamon’s relation to the farm, closely connected in point of time with the principal fraud, constitute admissible and potent circumstantial evidence against Miller on the question of his good faith in purchasing the land. “It seems to be the settled doctrine sustained by numerous adjudicated cases, that where the issue involves the fraudulent sale or conveyance of property, evidence of other like conveyances between the same parties at or about the same time is admissible. The ground for the admission of such evidence is that where such transactions of a similar character, executed by the same parties, are closely connected in time, the reasonable inference is that they proceed
In addition to the farm, Miller took from Lamon, by asignment, at about the time of the execution of the deed, as indicated by the evidence, two notes, one for $1,000.00, executed by John W. Lamon, and on which Miller has since collected $736.-89, and another for $431.08, executed by Kobert Gold, and on which he has realized about $500.00. His possession of these notes was disclosed under the prayer of the original bill for discovery, but neither the answer nor the testimony of Miller sufficiently shows that he had given value for them. He deals with them evasively. He fails to disclose their respective amounts as well as the consideration upon which they were assigned to him. He is unable to state whether they were assigned or merely delivered to him. As to whether he loaned money on them as collateral or purchased them, he is equivocal and indefinite, saying, in his answer, he advanced Lamon money, and, in order to do so, took an assignment from him of the two notes. He has no recollection of the amount advanced and kept no memorandum of it, but is positive it was more than $500.00. Later he says Lamon applied to him for a loan of $400.00, offering the John Lamon note as security, which was declined, and then both notes, which were accepted and $375.00 of the amount requested was advanced thereon, and the balance made up from time to time after the date of the conveyance. His witness, Colonel Schley, says Miller purchased the notes, but, at what price he never knew. He saw no money paid for them. Miller falsely asserted in his answer that one of them was barred by the statute of limitations and afterwards endeavored to explain in his deposition that he really
The foregoing observations apply with equal potency on the question of payment of $427.50 of the purchase money of the land. Nobody swears to it but Miller. He says he had Stuckey witness the payment of $250.00 of it, but Stuckey died before the testimony was given. Why was not a receipt taken ? Why, instead of taking a receipt, was Stuckey called in for the express purpose of witnessing the payment? Business men take receipts for money paid when witnesses are present and there is no necessity of hunting them up and calling them in. The story would be improbable on its face, but for a reason hereafter to be noticed which may have caused the performance of this unusal act. Why was not the $177.50 paid in Schley’s presence or deposited in the bank and included in the checks? Miller says he paid it on the day of the delivery of the checks. Why did he hand over the checks in Schley’s presence and then retire with Lamon to give him the cash? There is no memorandum, receipt or other writing by which Miller’s statement can be verified, and he gives no reason for failing to pay the money at the time he delivered the- checks. Moreover, Schley says.no money in addition to the checks was to be paid, as the parties admitted in Ms presence that Lamon owed Miller the difference on account of borrowed money. Where is the evidence of that loan? Did these men handle sums as large as $400.00 and $500.00 between them in the form of loans and payments without passing any receipts or making mamoranda ? A charge of fraud in a conveyance requires on the part of the grantee better evidence of payment of the consideration than Miller has produced as to said sum of $427.50, and his failure to respond to the demand casts suspicion upon the entire transaction between the par-, ties.
Another badge of fraud attendant upon this conveyance is the pains taken to have witnesses to transactions as to which none were necessary. For what purpose could Stuckey have been called as a witness to the alleged payment of $250.00 other
Other things casting strong suspicion upon the conduct of the parties to this conveyance and pointing directly to a fraudulent purpose in it on the part of Miller, are disclosed by the record, but those already noticed are sufficient to show that the finding of the circuit court cannot be disturbed. Miller and his sister, the wife of the grantor, took practically everything he ■had, leaving nothing for creditors. When such a transaction occurs between relatives, the fact that the grantor is immediately afterwards insolvent or without visible means to satisfy his debts, is a badge of fraud. Stauffer v. Kennedy, 47 W. Va. 714, 719; Reynold’s Adm’rs v. Gawthrop, 37 W. Va. 3;
An assignment of error is predicated upon the failure' of the court to allow, as sets-off against the debt due the plaintiffs, two notes executed by Eobert Lamon, their intestate, in favor of Chas. S. Lamon, one of which is.for the sum of $600.00, and dated June 15, 1887, and the other for $300.00, and dated December 8, 1893. On or about June 15, 1894, Chas. S. Lamon assigned the $600.00 note to J. M. Lamon, who says, in his deposition, it was assigned to him for the purpose of collection for which he was to receive $50 00, and that he did collect, out of the estate of Eobert Lamon, $69.99 of the amount due on it. He further says he exchanged for the note one previously executed by Chas. S. Lamon to himself fox $150.00 and one for $450.00 contemporaneously executed by him to Chas. S. Lamon. While rather intimating that the transaction between him and Chas S. Lamon as to this note was only a pretended transfer, he claims it and appropriated to his own use what he collected on it.' From what source the $300.00 note is produced is not indicated by the record. After proof of Bpbert Lamon’s signature, it was-offered as evidence. As to the administrator of Chas S. Lamon, the bill was taken for confessed, and no reference is made to these notes in any pleading except the answer of Maria E. Janney, the widow of Chas. S. Lamon, and she fails to ask that they be set off against the debt asserted by the plaintiffs against the estate of her former husband. After denying any liability by reason of the endorsement of the John W. Lamon note and of liability on any other account to the estate of Eobert Lamon on the part of the estate of Chas. S. Lamon, she puts in the following averment concerning the notes: “On the contrary respondent avers and says that at the time of the death of the said Chas. S. Lamon, and now, the said Eobert Lamon was indebted to him and that the estate of ■ the said Eobert Lamon is still indebted to him on account of various transactions amounting at least to the sum of $1,000.00, and some of which said indebtedness is evidenced by two notes of the said Eobert Lamon, one for $700.00 and the other for $300.00, the latter dated December 8, 1893;” and, without making further allegation respecting the notes, prays to be dismissed, &e. If either of these notes belongs to the estate of
There is an error in the decree, however, which has not been complained of. It refers the cause to a commissioner for a settlement of the accounts of the administrator of the estate of Chas. S. Lamon, deceased, and orders a convention of his creditors. It does not appear that there are any creditors other than the plaintiffs and, if there be any, the court can give the plaintiffs all the relief they demand or are entitled to without bringing them in. The bill charges that the debtor, in his lifetime, fraudulently conveyed away all his property both real and personal, and each creditor must follow it up and recover it, acquiring a lien upon it from the time of the bringing of his suit. The conveyance and transfers are good between the parties and can only be avoided at the suit of creditors. It is not a suit to enforce a judgment lien in which the law requires a convention of creditors. “In cases of this character, therefore, it is not proper to convene the husband’s creditors, nor to rent the land.” SNYDER, Judge, in Core v. Cunningham, 27 W. Va. 206, 210, a suit to set aside a deed for fraud. As it is unnec-cessary. when but a single creditor attacks the sale and there is no conflicting claim of priority or other cause for a reference, the cost of a reference ought not to be inflicted upon the gran
The cause will be remanded with directions to enter a decree subjecting the land to the payment of the debt due the plaintiffs and for sale thereof in default of payment.
Affirmed.