184 P. 564 | Or. | 1919

BURNETT, J.

The chronology of the events involved in this litigation is substantially this: The plaintiff claims that it bought certain alleged state warrants which afterwards proved to be forgeries; that the defendant husband acted as an intermediary *263between the officer of the state who uttered the forged paper, and the Guthrie National Bank, passing the invalid warrants from the officer to the bank for the account of the plaintiff. This transaction took place in the latter part of January, 1911. The husband suffered a stroke of paralysis on May 7, 1911, and became unable to attend to his business. The Oklahoma land in question did not constitute the whole of his possessions. He had other realty at the time and was engaged in a prosperous drug business at Guthrie, Oklahoma. It is claimed on the part of the defendants that the husband was greatly worried about the six thousand dollar mortgage on the land, and to relieve him the wife paid him out of her own funds about $5,000, and took title from him by deed of February 19, 1912. There is evidence to the effect that a previous deed had been made in December before but was informal in some particulars, requiring the instrument already mentioned as a means of correction. The next event was the departure of the husband and wife to take up their residence in Oregon, in the latter part of February, 1912. Succeeding this, on March 8, 1912, the plaintiff began the action against the husband, the Guthrie National Bank and its cashier, to recover as for money had and received to the use of the plaintiff. Judgment was not rendered in that action until April 27, 1915, more than three years after its commencement. Action upon the Oklahoma judgment was begun in Lane County, Oregon, on November 13, 1915, resulting in a judgment against the husband on March 3, 1916, as already stated. Afterwards came the instant suit.

There is a dispute in the testimony between the husband and the cashier of the Guthrie bank, Sohlburg by.name, about who took the initiative in bringing *264about tbe transaction concerning tbe warrants. Renfro testifies in substance that he was approached by Sohlburg, inquiring for warrants, while the latter contends that Renfro took up the subject with him. This is not necessarily material in the inquiry. It seems from the testimony that banks in Oklahoma were anxious to buy state warrants as an investment because they were not taxable. There is no testimony whatever tending to show that Renfro knew that the warrants in question were forged, and he is uncontradicted in his statement that the first he knew of any claim against him on account of his connection with the transaction was when Sohlburg sent him a copy of the papers served in the Oklahoma action.

As to the origin of the funds which the wife claims to Have paid to her husband for his interest in the Oklahoma lands, we have only the testimony of the husband and wife. She states that she married her husband in 1891 and that he was then a prosperous druggist at Guthrie and had plenty of money. They both agree that at the beginning of their married life he gave her regularly $10 every month for her own ase, independent of the expenses of the household. Soon afterwards he increased this to $50 per month. They also say that she invested her money and reinvested it and was frugal in her habits, so that at the time of the conveyance she had accumulated in the neighborhood of $5,000. ' He tells of giving her money at different times, among others, $300, being half of a $600 bet he won on an election. She narrates her purchase for $450 of some lots she afterwards sold for $2,100. They do not produce any books of account showing all these transactions, but there is nothing to contradict them in their positive statement.

*2651-4. The deposition of Sohlburg is to the effect that Renfro brought the bonds to the former’s bank and that the check which the agent of the plaintiff gave in payment was carried to Renfro’s account in the Guthrie bank. Renfro testifies substantially that he simply acted as messenger from the state official to the Guthrie National Bank; that in return for the warrants he received a cashier’s check on that bank, whereupon he protested that it should not have been drawn in his name, as he was not selling them, but that Sohlburg put him off with the statement that the books had been made up, as the transaction had occurred after banking hours and that it would not make any difference, whereupon Renfro indorsed the check to the state official. The witnesses account for this being after banking hours by the fact that owing to the train schedule the officer could not arrive at Guthrie until evening.' There is no testimony tending to show that Renfro knew that the warrants were invalid. Neither is there any evidence indicating that his wife knew of any claim of the plaintiff against him prior to the commencement of the action. It will be noted that all of the money which the wife had, in whatever manner she acquired it, was accumulated prior to the transaction concerning the warrants. The conveyance for which she paid was made before the commencement of the action and, so far as the testimony shows, was executed and delivered before the grantor therein had any notice of the plaintiff’s claim against him. That the defendant’s wife has a right to inquire into the origin and circumstances of the plaintiff’s demand against her husband is taught in Barnes v. Spencer, 79 Or. 205 (153 Pac. 47). There, the defendant Spencer had acquired judgment against the husband of Mrs. Barnes in California, had sued *266upon it in Oregon and recovered a domestic judgment here. He was attempting to levy an execution upon property which Mrs. Barnes claimed was purchased with her money by the' husband, who took title in himsélf contrary to her instructions. The court there permitted her to inquire into the origin of the claim of the judgment creditor. This ruling depended upon the principle that she was not bound by any judgment to which she was not a party. So here, Mrs. Renfro is not concluded in this suit by the mere rendition of a judgment in any court unless she was a party to it. She is entitled to put in evidence all the circumstances attendant upon the origin of the claim, not only to show that her husband had no intent to defraud his creditors, having no knowledge of any such claim, but also that even if there were such a fraudulent design on his part she knew nothing of it and did not participate in the deceit. There is nothing against the claim of the husband and wife that she paid him a valuable consideration for the property in Oklahoma. To a financially interested critic there might be suspicion that she could not .acquire $5,000 during the twenty years of her married life. Mere suspicion, however, is not enough to overthrow a positive statement which is not unreasonable. It is further suggested that there were no books of account offered, nor any details given about the numerous transactions which would lead to the accumulation of that amount of money. We must remember, however, that it is not improbable that a husband engaged in prosperous business should give his wife money continually and systematically. Neither is it beyond belief that while they prospered, and were harmonious in their domestic life business was not transacted between them with that same punctilious accuracy that *267would characterize dealings between strangers, both of whom were business men.

The legislative department of the government has codified the rules relating to conveyances with intent to defraud creditors. They are here set down:

Section 7397, L. O. L. “Every conveyance or assignment in writing or otherwise of any estate or interest in lands or in goods or things in action, or of any rents or profits issuing, therefrom, and every charge upon lands, goods, or things in action, or upon the rents or profits thereof, made with the intent to hinder, delay or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts or demands, and every bond or other evidence of debt given, suit commenced, decree or judgment suffered, with the like intent, as against the persons so hindered, delayed or defrauded, shall be void.”
Section 7400, L. O. L. “The question of fraudulent intent in all cases arising under the provisions of this chapter shall be deemed a question of fact, and not of law.”
Section 7401, L. O. L. “The provisions of this chapter shall not be construed in any manner to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear that such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.”

The opinion in Garnier v. Wheeler, 40 Or. 198 (66 Pac. 812), written by Mr. Justice Moore, is authority for this principle:

“Three things # * must concur to protect the title of the purchaser: (1) He must buy without notice of the bad intent on the part of the vendor; (2) he must be a purchaser for a valuable consideration; and (3) he must have paid the purchase money before he had notice of the fraud.”

*268And it is said by Mr. Justice Bean in Bond v. Ellison, 80 Or. 634, 639 (157 Pac. 1103, 1104):

“In order to avoid a sale upon the ground of fraud, the vendee must have had notice of the vendor’s fraudulent designs. Notice of the fraudulent intent of the vendor may be inferred from the circumstances; but the mere negligence or want of diligence in not inquiring into the facts known to him and calculated to put him upon inquiry is not sufficient to charge him with notice of fraud.”

See, also, Coffey v. Scott, 66 Or. 465 (135 Pac. 88).

The testimony shows without dispute that when the husband gave money to his wife he had a right to give it, making it hers as against all the world, because it was given to her long before the transaction concerning the warrants was had or thought of. They explain the transfer of the property on the ground that the husband had suffered a stroke of paralysis and his tenure upon life at that time seemed to be precarious; that he was worried by that fact and the further circumstance that there was a mortgage of $6,000 upon the land; that to remove the worry and to dispose of the property so that she could handle it without being complicated with his estate in case of 'his death, the conveyance was made, and that all the while they were both entirely unaware of any claim on behalf of the plaintiff against the husband on any account. It is not improbable, much less impossible, that during her twenty years of married life, with a separate income of fifty dollars per month and her investments and reinvestments, the wife accumulated $5,000. That she paid this to her husband is not disputed by any testimony. It constitutes the valuable consideration mentioned in Section 7401, L. O. L. It is utterly uncontroverted that she had no notice whatever of any fraudulent intent on the part of her bus-*269band and the testimony is clear that the latter had no such intent, because he was not aware of any claim against him, on behalf of the plaintiff. The case made by the defendants conforms to the standard of testimony announced in Garnier v. Wheeler, 40 Or. 198 (66 Pac. 812). Moreover, it appears without dispute in the testimony that the husband had upwards of five thousand dollars’ worth of other property, part of it realty, in the state of Oklahoma, independent of the transferred land, even if the latter were a pure gift. The plaintiff may have lost money in its endeavor to acquire nontaxable securities as an investment, and we cannot disturb the judgment which it has against the defendant husband, for the determinations of the courts of a sister state are entitled to full faith and credit here. But the evidence does not disclose anything to contradict the position of the wife that she paid a valuable consideration for the property without notice of any fraudulent intent on the part of her husband. We think that the plaintiff’s showing is not sufficient under the rules laid down by our Code on the subject to sweep away the wife’s accumulations of twenty years, in the interest of the plaintiff.

The decree is reversed and the suit dismissed.

Reversed and Dismissed. Rehearing Denied.

McBride, O. J., and Benson and Harris, JJ., concur.
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