182 Iowa 671 | Iowa | 1917
Albert Ott was also called by the plaintiff, but nothing of importance was elicited from him. Called in his own behalf, he testified that he was 25 years of age, and had resided at home with his fathér and mother all his life; that, after he became 21, he had an understanding with his father that he was to be paid $30 per month for his services on the farm, but that, prior to the execution of the deed and bill of sale, no part thereof had been paid to him; and that it was agreed between his parents and him that, in consideration of the conveyance to him .of the farm and personal property, he would pay the mortgage on the farm, and two notes to relatives, as evidenced by the following written instrument:
“Fairbank, Iowa, Feb. 16, 1914. For value received and as part consideration for purchase price of farm and other property, I hereby assume and agree to pay to Mathias Ott the note held by him against Rudolph Ott in the sum of one thousand dollars, and to Fred Brickman the note held by him of two thousand dollars.”
The balance of the consideration is represented by the
Rudolph Ott testified that he was 54 years of age, had a family of nine children, eight of whom, including Albert, resided with Mm on the premises in question; that he was afflicted wdth rheumatism, and unable to do manual labor to any considerable extent; that, since the execution of the deed, the family has all resided on the premises; and that Albert thereafter took'charge, and has since managed and operated the farm, and received the income therefrom. Concerning the written instrument signed by Albert, in which he agreed to pay the notes to his father and half-brother, he testified that he did not know when same was made out, but thought probably the day following that on which’ the other instruments were executed; but from his evidence it appears that he either did not know when or where it was made out, or evaded giving the information. Apparently, the first he knew of the instrument was when it was given to him by Albert. He was emphatic in his statement that he was not at Fairbank the day the deed and mortgage were executed.
No witness testifies that there had been any conver
Neither the father nor the son was at all clear or specific as to details concerning any of the transactions between them, and they were confused upon cross-examination. There is no direct evidence of an agreement or understanding between the parties, before they went to the bank to have the papers made out. The consideration named was suggested by the father, and the inference may fairly be drawn, from what was said and done at the time, that the agreement on the part of Albert to pay the notes aggregating $3,000 was not discussed, and had not yet been considered. Albert at first stated that he did not know of the notes until after they returned from the bank, and
Albert knew that the note and mortgage executed to secure the' payment thereof were intended to be in payment of the $4,400 note and interest thereon; and Rudolph stated that he did not want to pay the debt twice, but that the execution of the deed and bill of sale had nothing to do therewith. Both denied that any agreement had been made for a reconveyance of the farm and personal property, or that the written instrument was not to be binding upon Albert. The two notes claimed to have been executed, one to Mathias Ott and the other to Fred Brickman, were not offered in evidence, nor is there any testimony concerning them, except as above stated.
The value of the land and personal property covered by the deed and bill of sale is not shown, nor was any evidence offered by either party in regard thereto. If we assume that the consideration named in the instrument represented the fair value of the property conveyed, it is a circumstance in favor of the tona fldes of the transaction; but, on the other hand, the evidence shows that the parents and other members of his father’s family continued to reside thereon and derive their living from the proceeds of said premises, which would tend, at least, to indicate'that Albert, after paying full value, had assumed an unlikely burden, or was good-naturedly permitting a substantial part of his incomé to be appropriated to the benefit of the former owner of the land and family. Albert possessed no other property than the above.
Rudolph claims to be unable to perform manual labor, several of the children are young, and it would seem quite improbable that he would divest himself of his home and all property of every kind after he had become unable to work, without making provision for the support of himself
Where the written instrument was prepared, by whom, and why the same purports to have been executed at Fair-bank, if it was made out at Oelwein at the time the deed and bill of sale were executed, as claimed by Albert, does not appear in the evidence, and no good reason therefor has been suggested. If the understanding between the parties, at the time the deed and bill of sale was signed, or prior thereto, was that Albert was to pay the $3,000 in notes, the written instrument would have been prepared at the same time, and dated at Oelwein, and there would doubtless have been no discrepancy in the testimony of witnesses in relation thereto, or difficulty in establishing when and where same was executed. It is impracticable to set out the evidence in detail; and, while there is no direct evidence of a fraudulent agreement between the parties, yet, when taken as a whole, such is apparently the only reasonable inference to be drawn therefrom.
There is no doubt that Budolph and his wife had given a new note and mortgage upon the farm to secure the payment thereof, to take the place o,f the $4,400 note to Adam Kiefer, and that he had failed to exchange the former for the latter, but had left the same in the hands of plaintiff, and.probably disposed of the new note to other parties.
While the rules to be applied in cases of this character have often been stated, attention is, nevertheless, called to the following:
Constructive notice exists where the grantee knew of his grantor’s intentions, or of such facts as would put an ordinarily prudent person upon inquiry which, if pursued, would lead to a knowledge of grantor’s purpose. Rosenheim v. Flanders, supra; Jones v. Hetherington, 45 Iowa 681; Lyons & Dickey v. Hamilton, 69 Iowa 47. If, however, the purchaser is a creditor in .good faith, and seeking payment or security for his claim, the conveyance to him will not be fraudulent, even though he knows of other creditors, and that the effect of the debtor’s action will be to defeat them. Rosenheim v. Flanders, supra.
But he must act in good faith; for, if he takes the conveyance for the purpose of aiding in the fraud, it is void. Rosenheim v. Flanders, supra; Richards v. Schreiber, Conchar & Westphal Co., 98 Iowa 422.
A creditor may also take a conveyance that secures debts due to others, as well as to himself. Gould, Draper & Co. v. Hurto, 61 Iowa 45; Roberts, Butler & Co. v. Press, 97 Iowa 475.
To amount to such fraud as would justify the court in setting aside a conveyance on account thereof, both the grantor and grantee must either have participated therein, or the grantee must have possessed such notice as would have put him upon inquiry as to grantor’s intention. Tenold v. Klimesh, 160 Iowa 410; Atkinson v. McNider, 130 Iowa 281; Witham v. Blood, 124 Iowa 695.
Transactions between relatives will be scrutinized closely, where fraud is charged, but it will not be imputed to them because of the relationship alone. Conry v. Benedict, 108 Iowa 664.
The Supreme Court of -Missouri, in Mason v. Perkins, 180 Mo. 702 (79 S. W. 683), said:
“When a father strips himself of everything he owns that is subject to execution, in the face of a suit pending against him and about to be tried, and conveys his property to his son in alleged payment of a very vague and uncertain claim for services that have been rendered to him by his son years before, it is a fair circumstance to be construed in determining the tona fides of the conveyance.”
In Lyons & Dickey v. Hamilton, 69 Iowa 47, this court uses the following language:
“Where a purchaser of the property is not a creditor, but a mere volunteer, and the seller intends by the sale to hinder, delay, or defraud his creditors, it is not necessary that it should be shown that the purchaser bought 'with a like fraudulent intent.’ It is enough if it be shown that the purchaser had knowledge of such facts as would charge him with notice of the fraudulent intent of the seller.”
And again, in Thompson v. Zuckmayer, (Iowa) 94 N. W. 476, this court said:
“Transactions between members of a family or others in close confidential relations will be scrutinized closely, but the law gives the relative or friend the same right to protect himself in the collection of a claim, and the same right to purchase property, which is enjoyed by a stranger, and to set aside such a transaction, the burden remains upon*681 the party alleging fraud to prove it. It is shown that Albert Zuckmayer was indebted to intervenor in quite a large amount, growing out of various dealings between them, and the land conveyed was taken with the burden of a mortgage. We see no good reason for holding that intervenor, in receiving the deed, acted fraudulently. He apparently paid full value for the land, and his acts, so far as disclosed by the record, are entirely consistent with good faith on his part.”
See, also, Smyth v. Hall, 126 Iowa 627; Strong v. Lawrence, 58 Iowa 55; Elwell v. Walker, 52 Iowa 256; Crary v. Kurtz, 132 Iowa 105; Richardson v. Richardson, 134 Iowa 242.
While the burden rested at all times upon the plaintiff to establish fraud, as appears from the cases above cited, and notwithstanding his failure to make such proof in chief, yet, when the evidence is taken as a whole, the burden seems to have been met.
It is not claimed that the several instruments were executed and conveyance made for the purpose of paying or securing the notes held by the father and the half-brother of Rudolph, or the $1,000 claimed to be due Albert; but the claim of appellant is based wholly upon the alleged purchase of the farm and personal property by Albert. It may be assumed that the consideration stated in the deed represented the fair market value of the land, but the testimony relating to the alleged claim for services due the son, and the execution of the written agreement signed by him to pay the $3,000 in notes, lack the characteristics of genuineness. There is much in the transaction from which a, voluntary conveyance may be inferred, and that the arrangement to pay the $3,000 in notes originated long after the deed and bill of sale were executed. It is not even clear that the notes were in existence at that time. The original notice in the suit upon the $4,400 note was served January
The circumstances in evidence would seem to leave no doubt that the father was seeking to avoid the payment-of the Ford judgment, and that the son was affording him such assistance as he could,- to do so.
Rudolph and Alwine Ott, at the time of executihg the $4,400 note, also executed a mortgage on a part, at least, of the premises above described, to secure the payment thereof. Some time after the execution of the new note and mortgage, Kiefer released the former mortgage. The evidence does not show whether the mortgage had been kept with the note, or not.
It was held, in Omaha Cattle Loan Co. v. Shelly, 89 Neb. 502 (131 N. W. 926), by the supreme court of Nebraska, that an alleged fraudulent grantee is entitled to make any defense against a judgment sought to be made a lien upon the land conveyed -that would have been available to the judgment debtor; and Gottlieb v. Thatcher, 34 Fed. 435, Lanata v. Planas, 2 La. Ann. 544, Inman v. Mead, 97 Mass. 310, and Citizens’ St. Bank of Wood River v. Porter, (Neb.) 93 N. W. 391, are cited to sustain this holding.
The contrary doctrine was adopted in this state in Strong v. Lawrence, 58 Iowa 55, where it is held that a judgment in a case similar to the one at bar could not be attacked collaterally except upon the ground of fraud, or that same was erroneously or unlawfully entered. There is no pretense in this case that the judgment in question was obtained in a way to make the same vulnerable to attack under the holding in the above case. The court as now constituted do not fully approve the holding of the above case. We leave the matter open for future consideration, should the question be presented.
While the evidence in this case is not, in all respects, wholly satisfactory, it is a matter of common knowledge that direct proof of fraud between parties related as we find
The demeanor and appearance of witnesses upon the stand while undergoing cross-examination were peculiarly within the observation of the trial court, and much weight must necessarily be given to its conclusions in matters of this character.
We reach the conclusion that the judgment appealed from should be — Affirmed.